Daimler AG’s first-quarter earnings easily surpassed analyst expectations on the back of favorable conditions in global car markets led by China, suggesting a strong reporting season for Germany’s carmakers.

Profitability was strong in all areas of its business, but particularly impressive at its core light-vehicles division, where a rising tide of demand lifted results already buoyed by emergency cost cutting from last year.

“We continue to execute on our ambitions in a very encouraging market environment,” said chief executive Ola Källenius in a statement. “Our systematic efforts to lower the break-even point of the company are becoming increasingly visible.”

Consolidated operating profit at the group soared to over 5.7 billion euros ($6.8 billion) in the quarter, according to unaudited company figures.

This beat consensus estimates of 5 billion euros ($6 billion) and far surpassed the 617 million euros ($740 million) recorded a year ago, when the pandemic was already weighing on its key Chinese business.

Daimler attributed the strong results to three market variables that would also benefit other premium competitors: higher volumes, stronger pricing, and a more lucrative sales mix. The implications of the robust earnings are bullish for other carmakers such as BMW and Porsche, which posted a sharp gain in car sales on Friday.

Daimler’s premium brand Mercedes-Benz posted double-digit gains in volume for the quarter, a period in which domestic rival BMW enjoyed record vehicle sales.

Mercedes-Benz cars and vans contributed the bulk of its earnings, delivering an adjusted operating margin of 14.3% that pushed it into the lofty realms of a luxury brand like Porsche. Analysts had expected a strong 11.7% by comparison, above the company’s own 8% to 10% range.

“The magnitude of the beat will likely lead to upgrades despite what looks like a challenging production environment for the industry in Q2,” equity analysts at Jefferies said in a research note, which rates the stock a “buy” with a 95-euro price target.

Daimler’s finances also recovered with net liquidity across its industrial operations rising to 20.1 billion euros ($24.1 billion), nearly twice as high as at the end of 2019, prior to the mass outbreak of COVID-19.

Apart from 416 million euros ($499 million) in restructuring charges and another 75 million euro ($90 million) hit from legal risks, quarterly results included 1.2 billion euros ($1.4 billion) in one-off gains related to the carve-out of its fuel cell assets into a new joint venture operated together with commercial vehicle manufacturer Volvo Group.

Shares were up 2.7% at 77.39 euros in early Friday trading and have gained a third in value year to date, outpacing the 23% increase in the broader STOXX Europe autos index.

In an attempt to neutralize the conglomerate discount that had long weighed on its stock, Daimler announced in February it would split itself up into two pure-play companies.

The first would center on its premium passenger car operations, which are busy rolling out new electric vehicles such as the Mercedes EQS. The other would focus on heavy-duty trucks and buses like the long-haul Actros semi.

Separately, Volkswagen Group’s Porsche brand published quarterly volumes that saw a 36% jump in retail sales, thanks mainly to Chinese and American buyers snapping up its popular Cayenne and Macan luxury SUVs. Its first-ever battery electric vehicle, the Taycan sports sedan, saw unit sales jump to 9,072 from 1,391 in the corresponding quarter of the previous year when it had just hit markets.

By comparison the European car market continues to struggle as lockdowns continue. The region’s auto industry reported on Friday a rebound in demand in March that was flattered heavily by a historically weak month in the previous year. Nonetheless it was just enough to offset the year’s poor start, leaving first-quarter volumes largely flat with 3.08 million new cars sold, including in the U.K.