There are some clouds on the blue sky, Dieter Zetsche told journalists in New York on Tuesday.
Emerging markets have generated almost three-quarters of world growth over the past two years, but there is growing concern that inflation in China -- the world's No. 2 economy -- could prompt a slowdown in emerging markets across the board.
China's consumer inflation hit a 34-month high of 5.5 percent in the year to May. Analysts forecast it would peak in June or July before easing.
Overall, the outlook for the auto industry is good, Zetsche said, adding he expects the sector to grow by five, six, plus percent every year.
But we have to be a little bit more cautious that adverse effects, such as the fight against inflation in China, might have more impact on global GDP development.
Premium and mass-market carmakers have looked to fast-growing markets like China to make up for sluggish sales growth in more mature markets.
But China's car market -- the world's biggest ahead of the United States -- is expected to cool this year, partly due to rising fuel prices and tighter rules on car registrations after sales there surged by a third to a record in 2010.
Daimler, which makes Mercedes-Benz and Smart cars, sold 82 percent more cars in China in the first three months of 2011 than in the year-earlier period.
But that growth rate slowed to 43 percent in May, dragging monthly group sales growth to a single-digit percentage from more than 10 percent over the first four months of the year.
But Zetsche said Daimler's business was diverse enough -- with operations in North America and Europe as well as emerging markets selling cars, trucks, vans and buses -- to balance volatility in emerging markets.
In addition, the overall development has been better this year than the company had expected, Zetsche said.
His comments come as Daimler unveils its revamped flagship truck Actros. It hopes this will improve profitability at its trucks business, which generated 45 percent of group revenue in the first quarter, to take on top rival Volvo
We are investing a total of more than 2 billion euros ($2.87 billion) in development and production of the new Mercedes-Benz Actros, Daimler Trucks chief Andreas Renschler told Reuters in an interview.
Last quarter, Daimler's truck margins lagged peers such as Volvo and Scania
Daimler is cutting production costs by using the same engines in the new Actros truck as in vehicles made by U.S. unit Freightliner and Japanese truckmaker Fuso.
Renschler said there was still synergy potential in using the same transmissions and axles across units.
Daimler shares closed up 2.1 percent at 48.56 euros, underperforming a 2.23 percent rise in the European automakers index <.SXAP>.
(Writing by Maria Sheahan in Frankfurt. Editing by Jane Merriman and David Hulmes)