German luxury carmaker Daimler on Thursday announced record profits for 2017 on the back of strong SUV and truck sales, but the results were overshadowed by the firm’s connection to controversial diesel exhaust tests on monkeys.
Daimler said net profits soared by 24 percent last year to 10.9 billion euros ($13.5 billion), while revenues were up seven percent to 164 billion, in line with analyst expectations.
“The Daimler workforce has once again succeeded in breaking the records set in the previous year,” chief executive Dieter Zetsche said in a statement.
Underlying, or operating, profits were up 14 percent to 14.7 billion euros, the company said, adding that it would raise dividends to an all-time high of 3.65 euros per share compared with 3.25 euros per share for 2016.
Looking ahead, the Mercedes-Benz parent company said it expects both unit sales and revenue to increase “slightly” in 2018, in step with forecasts for global demand in the industry.
“Our ambition is unchanged: Daimler belongs at the top,” said Zetsche.
The group, which also makes Smart cars, said unit sales climbed to a record 3.3 million vehicles last year, driven by robust demand for its Mercedes-Benz urban SUVs and E-Class models, particularly in China.
Daimler’s vans and trucks meanwhile enjoyed double-digit growth.
Nevertheless, the positive results come as Daimler is embroiled in a row over its role in tests that exposed monkeys to toxic diesel fumes in a US lab in 2015.
The experiments, revealed in a New York Times article last week, were commissioned by a now defunct research body funded by Daimler and fellow German auto giants BMW and Volkswagen.
– ‘Appalled’ –
The same organisation, the European Research Group on Environment and Health in the Transport Sector (EUGT) also carried out tests on human volunteers.
Daimler has said it was “appalled” by the revelations and on Wednesday suspended an employee who had sat on the board of EUGT, identified by German media as the firm’s head of environmental protection, Udo Hartmann.
The controversy has brought fresh scrutiny to the powerful German car industry and the lengths automakers have gone through to hide the harmful effects of diesel engines.
The crisis first erupted in 2015 when Volkswagen admitted to installing cheating devices in millions of diesel cars to make them seem less polluting in lab tests than they were in real driving conditions.
Suspicions have since spread to other carmakers, including Daimler, and several German cities are mulling diesel bans to combat air pollution.
Carmakers have responded to the “dieselgate” scandal by shifting their focus to the cleaner, greener cars of the future with all major brands planning huge investments in electric and automated vehicles in coming years.
Daimler said it had increased its spending on research and development by another 15 percent in 2017 to 8.7 billion euros.
“It’s about nothing less than the reinvention of individual mobility,” said Zetsche
