DaimlerChrysler's fourth quarter earnings have plummeted by sixty three percent, due mainly to troubles at its luxury Mercedes-Benz marque.

The German-headquartered group reports net income down to €526 million ($673m, £362m), while operating profit plummeted from €2.4 billion to €785m.

The Mercedes division saw Q4 operating profit fall 97% to just €20 million, primarily due to the cost of rectifying quality problems and further losses at Smart, its small-car unit.

Promises DaimlerChrysler ceo Jürgen Schrempp: "We will be in control of the challenging situation at Mercedes-Benz ... within the next twelve months."

Schremp did not specify what measures will be taken - but cost cuts are inevitable and job losses have not been ruled out.

In sharp contrast to Mercedes, the group's US-based unit, Chrysler, generated €386 million in operating profit in the fourth quarter, more than double the year-earlier period.

Data sourced from Wall Street Journal Online; additional content by WARC staff