Daimler has decided to lower its earnings forecast for this year and also reconsider the profit targets for 2013.

Due to decreasing demand in Europe and increased competition in China, Daimler has decided to lower its earnings forecast for this year and reevaluate profit targets for 2013. Daimler initially forecasted full-year earnings before interest and taxes (EBIT) of 9 billion euros (just like in 2011) but this figure will go down by 11 percent to 8 billion euros (about $10.4 billion).

The automotive giant dropped 2013 profit targets to a 10 percent operation margin in the Mercedes-Benz car division as well as an 8 percent sales boost at the trucks division. Mercedes-Benz hasn’t been doing so well in China where this year sales only rose by 6.7 percent in comparison to Audi and BMW who gained more than 30 percent.

The German carmaker is expecting to sell more cars in this fourth quarter based on the success of the new A-Class for which they had to add a third shift at the Rastatt factory to keep up with demand. In addition, the new generation of the B-Class has also been a success so far for Mercedes. Some of the money earned in Q4 2012 will be invested in the firm’s Chinese dealer network.

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Daimler lowers its earnings forecast for 2012 and reconsiders profit targets for 2013