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DaimlerChrysler AG's Mercedes Car Group Thursday warned that operating profit for this year will decline despite a rise in car sales, as it boosts spending to improve product quality.
"We will be below last year at Mercedes," Juergen Hubbert, head of Mercedes Car Group, told reporters at the International Auto Show in Paris.
Mercedes' sales have fallen this year as the premium carmaker re-launches models such as the M-Class sports-utility vehicle and S-Class luxury sedan.
Hubbert, however, said he expects the new A-Class, which was re-launched earlier this month, to help Mercedes record higher car sales this year compared with 2003.
"The Mercedes Car Group will sell more than last year, more than 1.2 million cars," Hubbert said.
Hubbert said revenue this year will be "near" last year's level, when the Mercedes Car Group had sales of 51.45 billion euros ($63 billion).
Shares of DaimlerChrysler were at $41.62, down 38 cents, or 0.9 percent, in Thursday morning trading on the New York Stock Exchange.
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