Daimler Warns Increasing Risks in Emerging Markets

Daimler warned Tuesday against the rise of the emerging economic risks, which could deprive the automotive industry of its main engines, including China.

“There are clouds in the blue sky,” said Dieter Zetsche, CEO of the German manufacturer, during a press conference in New York.

“The positive development of our global growth continues to be strongly supported by emerging markets. But we must be somewhat cautious about adverse effects, such as the fight against inflation in China, which may have more to impact on the evolution of GDP (gross domestic product). ”

Inflation in China accelerated in May to 5.5% year on year, an unprecedented rate in almost three years.

Analysts predict, however, that the price surge, as Beijing tries to contain by tightening its monetary policy, will reach a maximum in June or July before slowing.

The Chinese auto market should suffer this year from soaring fuel prices and tighter regulation on registrations. In 2010, vehicle sales had increased by a third. Daimler has seen sales jump 82% in China in the first three months of 2011 compared to the same period last year, but growth slowed to 43% in May.

Dieter Zetsche said he expected that the global automotive market to grow by “5%, 6% or more” each year through the development of emerging countries.