The company, which is renowned for its top-end luxury cars and heavy vehicles, said 2009 had been an "exceptionally bad year for the economy, the auto sector and for Daimler." Sales fell by 20 percent and the company suffered a net loss of 2.6 billion euros (3.5 billion dollars), compared with a profit of 1.4 billion euros a year earlier.

Daimler, along with other major German carmakers suffered a slump in sales as a result of the global economic crisis. The maker of Mercedes-Benz sold just 1.6 million vehicles in 2009, a drop of 25 percent from the previous year. Particularly hard hit was the heavy trucks sector, which experienced a 36 percent fall in sales. In comparison, BMW, the world's leading luxury carmaker, only experienced a sales drop of 4.7 percent in 2009.

Chairman Dieter Zetsche acknowledged to a news conference on Thursday that the loss in profits was largely due to declining sales, but also to "stiffer competition and a fall in market prices."

Onwards and upwards

Looking ahead to 2010, Zetsche said the only way now was up.

"After a controlled defense in 2009, we will go on the attack in 2010," he told reporters. He said that although the automobile industry was still operating in a "difficult environment" he was expecting sales to pick up in the coming months.

Zetsche said the company was expecting strong sales of new models and was hoping for a "moderate upward development of the most important markets." The company is looking towards growing markets in China and India to lead the way out of the malaise. At the moment China represents only six percent of Daimler's sales.

All factors considered, Zetsche said the car giant was looking to turn a pre-tax profit of 2.3 billion euros in 2010. But his optimism did little to reassure investors and Daimler shares took a beating when the fell by eight percent on Thursday afternoon. By the close of trading, they had recovered slightly.

tkw/AFP/dpa
Editor: Kristin Zeier