FRANKFURT: The German luxury car maker Daimler posted a first-quarter net loss Tuesday of 1.28 billion euros (1.66 billion dollars) and warned that sales would "decrease significantly" this year.

Daimler, which made a profit of 1.3 billion euros in the same period a year earlier, said sales shed 25 percent in the first three months of 2009 to 18.7 billion euros.

"The Daimler Group's total revenue is likely to decrease significantly in the full-year 2009" from the previous year's level of 95.9 billion euros, a statement said.

And "earnings in the second quarter are expected to be significantly negative once again," it added.

Shares in Daimler plunged by 5.09 percent to 25.99 euros in morning trades on the Frankfurt stock exchange, while the DAX index of German blue-chips was off by 2.65 percent overall.

The maker of Mercedes Benz cars and trucks has been slammed with others by the global collapse of automobile markets.

In Japan, Honda Motor Company said Tuesday that it fell into a 186.1-billion-yen (1.9-billion-dollar) loss in the fiscal fourth quarter due to weak sales and a stronger yen.

Daimler said it had "initiated measures designed to adjust costs and avoid expenditure across all divisions" and at its headquarters in Stuttgart, southern Germany.

The group employed 263,819 people at the end of March.

Its results had suffered from "sharp drops in unit sales at Mercedes-Benz Cars, Daimler Trucks and Mercedes-Benz Vans in the first quarter of 2009."

The automotive division nonetheless expected to post positive earnings in the second half of the year, the statement said.

Daimler said it had earned 449 million euros from the sale of property at Berlin's Postdamer Platz, and 102 million from the transfer of shares in the European aeronautic group EADS.

But the group also booked charges of 491 million euros in connection with its holding in the distressed US car maker Chrysler, a former Daimler division.

On Monday, Daimler said it would give up its 19.9 percent stake in Chrysler and forgive outstanding loans from the struggling firm, which must come up with a viable plan this week to continue receiving US government support.

Breaking down the data, the German group said it sold 231,200 cars in the first three months of the year, down from 318,300 in the same period of 2008.

Daimler Trucks, the world's leading truck maker, sold 65,400 vehicles, down from 107,700 amid the downturn in global activity.

Results from Daimler Financial Services had fallen owing to higher cost of ensuring against risk, the company said.

Looking ahead, the group said it would launch its smart city car in China and Brazil this year, but that in general, "lower volumes are anticipated above all in the markets of the United States, Western Europe and Japan."