The ratings on DaimlerChrysler AG reflect the broad product and geographic scope of its automotive operations, including its well-established position in the relatively recession-resistant luxury vehicle industry (through its Mercedes Car Group), and its leading position in commercial vehicles. Despite recent negative developments at Mercedes Car Group, notably the decline in its profitability, Standard&Poor's continues to view this division as a strength within the DaimlerChrysler group. It enjoys a leading market share in the luxury vehicle market, a solid brand image, and broad geographic diversity of sales. However, Mercedes Car Group is facing rising costs to address quality issues, which contributed to the decline in profitability to €1.3 billion ($1.6 billion) in the first six months of 2004
