BERLIN (AP) -- The chief executive of automaker Daimler AG said Wednesday that the company expects sales increases for its luxury cars in markets like China and Russia to offset any slowdowns elsewhere, including the weakening U.S. economy.
Speaking ahead of the start of the company's annual shareholder meeting in the German capital -- its first since it spun off Chrysler last year -- CEO Dieter Zetsche warned that ''the economic climate suggests that things will get tougher rather than easier.''
He singled out the ongoing credit crisis in the U.S., a major market for the company, along with the dollar's weakness and higher costs for raw materials such as steel, rubber and oil.
Zetsche said that demand for passenger cars in the U.S. was likely to be ''much lower this year than in 2007,'' when his company sold 253,400 cars there, accounting for euro20.3 billion (US$31.8 billion) in revenue.
In Western Europe, sales are expected to remain flat. Last year, the company sold 599,800 cars in that market, including Britain, Spain, France, Germany and Italy, accounting for euro49.2 billion (US$77.2 billion) in revenue. Overall, Daimler had sales of euro99.4 billion (US$156 billion), up from euro99.2 billion in 2006.
Zetsche said the economic slowdown would primarily affect the company's sales of sedans and sports cars. Its premium segment, or Mercedes-Benz Cars, is expected to remain more stable, particularly in the U.S.
''So we're well equipped to successfully handle the current macroeconomic challenges,'' Zetsche said.
Zetsche said that, given the slowdown in the U.S. and flat outlook for western Europe, growth in the industry ''will therefore continue to be driven by the emerging markets, whose growth is so dynamic that it will more than offset'' slower sales elsewhere.
Russia and China are two key emerging markets where a buoyant upper-middle class has been snapping up luxury cars.
Daimler also reiterated that it expects pretax earnings to be well above the euro8.7 billion (US$13.6 billion) it posted last year, itself an increase from euro4.9 billion in 2006. More growth also is expected in 2009.
The company said that it expects to increase overall spending on research and development, investing a total of nearly euro14 billion (US$21.9 billion) by 2010. It spent euro4.1 billion (US$6.4 billion) in 2007.
Zetsche said that was crucial for future development because ''so far no single technology has emerged as being clearly superior to all the others.''
Shares of Daimler were down less than 0.1 percent to euro52.93 (US$83.07) in Frankfurt.
