Daimler sees car demand growing despite oil price

By CHRISTOPH RAUWALDTHE WALL STREET JOURNAL EUROPEJuly 4, 2008

Daimler AG Chief Executive Dieter Zetsche said global demand for cars is expected to rise further in coming years though the price for oil will remain high.
"There is good reason to assume that the 'second century of the automobile' has only just begun....The number of automobiles world-wide is currently growing five times faster than the world population," Mr. Zetsche said Thursday at a conference in Magdeburg, Germany.
"While it has taken more than 100 years to put 800 million vehicles on the roads, it will take less than 30 years to at least double that figure....In fact, by the year 2050, the number may almost triple," Mr. Zetsche said, adding that "emerging markets are growing dynamically and so is the demand for self-determined mobility."
However, Mr. Zetsche said he sees "pressure to reconcile the growing demand for mobility with an effective reduction of emissions" in times of skyrocketing fuel prices. "Oil is limited...there's no real expectation of it ever being cheap again," he said.
Mr. Zetsche said the biggest current risks to oil supply are related to politics, security and the cost of new oil projects, "not to mention that financial speculators appear to be turning oil futures into the 'dot-com' stocks of the new millennium." He said he expects excess or new oil reserves to be quickly absorbed by fast-growing countries such as India and China.
Environmental issues, such as reducing emissions of carbon dioxide, are a big concern for car makers, he said.
"The issue is not just CO2 but other emissions as well...and at Daimler, we're not going to wait for new legislation...we're working to comply ahead of time. Daimler is leaving no stone unturned in meeting the challenge of reducing CO2 and other emissions," Mr. Zetsche said. "Ultimately, we'll be driving zero-emission vehicles."
In the next two years, Daimler is investing almost €14 billion ($22 billion) in research and development.
Mr. Zetsche said Daimler will start production of "the next-generation of fuel-cell drive systems" in a low-volume Mercedes-Benz B-Class series in 2010.
Write to Christoph Rauwald at christoph.rauwald@dowjones.com