DaimlerChrysler will retain a stake of at least 15 per cent in aerospace group EADS for the long term, the world's fifth-biggest carmaker said yesterday, giving a concrete number for the first time.

DaimlerChrysler is in the process of lowering its stake to about 22.5 per cent.

"We aim to support this growth at EADS and to remain a major shareholder with a stake of at least 15 per cent," chief executive Dieter Zetsche said.

"Should we eventually decide to reduce our share to 15 per cent we will strive to maintain the balance between German and French shareholders," he added.

Mr Zetsche reiterated that DaimlerChrysler expected improved profitability in 2006 and continuing increases in operating profit in the years to follow. It is expected to give a more detailed 2006 forecast with first-quarter results on April 27.

DaimlerChrysler had said last week it would sell a 7.5 per cent stake in EADS next year to focus more on its core business.

It entered a forward sales agreement with banks that will lower its stake in EADS to about 22.5 per cent as part of a carefully coordinated move with fellow EADS investor Lagardere of France.

DaimlerChrysler had said it and Lagardere would remain core shareholders in EADS but had not specified what stake it intended to keep. It said the 7.5 per cent EADS stake sale would boost net income by about £714 million in 2007.

The company said it was confident that premium division Mercedes Car Group would achieve its target of a seven per cent operating margin in 2007.

The division made an operating loss of £360.7 million last year amid restructuring charges for minicar business Smart and job cuts.

The group is also overhauling its market-leading commercial vehicles business to separate its truckmaking operations from the bus and van businesses.

"These measures will help the division come closer to its goal of posting profits that better reflect its position as number one in terms of sales," it said. ..SUPL: