Daimler (XTER:DAI, Financial), a global luxury automotive and truck manufacturer based in Germany, was the largest contributor for the quarter. Considering the operating environment, we were happy with the company's second-quarter earnings results, specifically in Mercedes-Benz cars and vans. Despite Mercedes-Benz cars' and vans' volumes being down 22% and 29% year-to-date, respectively, the revenue is only down 14.8%. We think this reflects significant product mix benefits within both markets along with resilient pricing dynamics. China also contributed to the company's solid performance, delivering 17% year-over-year growth, even though the overall Chinese auto market was down 4%. In addition, free cash flow was significantly stronger than had been expected, which we believe is a result of management's stringent focus on improving Daimler's cash flow generation. As a result, the company ended the second quarter with a strong net financial position. Management's earnings guidance was also better than had been expected. These results reflect well on the new management team.
From David Herro (Trades, Portfolio) and Bill Nygren (Trades, Portfolio)'s Oakmark Global Select Fund third-quarter 2020 commentary.
