DaimlerChrysler's flagship Mercedes Car Group intends to regain peak profit levels within the next few years after operating profit dips in 2004, division had Juergen Hubbert said Thursday

A combination of factors including spending to fix quality problems that have tarnished its luxury image will weigh on operating profit this year, he reiterated.

"I am absolutely happy that the board decided to make quality the first priority," he told reporters at the Paris car show.
These quality-improvement programs, some currency impact, cost increases for steel and some other factors mean Mercedes will not be in a position to reach last year's results, "but this is planned, with the clear direction to then in the next few years come back to the levels we had earlier."

Hubbert also said that the division had minimized its exposure to currency fluctuations so that changes in the value of the euro would not hit profits significantly in the future.

"We have closed our currency gap so that there is no risk any more," he said, although exchange rates could still have a minor impact.

He said higher steel prices could eventually push annual costs up by more than 100 million ($123.2 million) if prices stayed as they were now.

"It is a burden that could come to over the 100 million line," he said, although he noted the impact would unfold over time because the company had some steel contracts that ran for the next two or three years.