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(CNN Business) —  

The owner of Mercedes-Benz has warned of a major slump in profits this year after recalls, legal issues and weak demand for new cars contributed to a rough second quarter.

Daimler (DDAIF) said Friday that it expects a second quarter loss of €1.6 billion ($1.8 billion), a dramatic decline from €2.6 billion ($2.9 billion) profit in the same period a year earlier.

It said full year earnings will be significantly below the €11.1 billion ($12.5 billion) profit achieved in 2018.

The German carmaker blamed its weak second quarter on higher costs related to the Takata exploding airbag recall, as well as regulatory and legal risks from the diesel emissions scandal.

In addition to those factors, Daimler said its full year performance will be affected by slow product rollouts and weak growth in automotive markets.

The Mercedes-Benz vans business is in particularly poor shape. Daimler said Friday that the division would make a loss of €2 billion ($2.3 billion) in the second quarter.

Shares in Daimler were trading 1.7% lower in Frankfurt following the announcement.