Daimler AG (DAI), the German auto maker behind luxury brand, Mercedes-Benz and the Smart car, reported a drop in sales in North America and stated it will not live up to its full-year earnings forecast as a result of decreased demand, impacted by the financial crisis.

The company reported net income of 213 million euros (US$273.5 million), or 21 European cents per share, in the third quarter on Thursday. That compares to losses incurred during the third quarter of 2007 of 1.5 billion euros, or 1.47 euros per share, which includes results from the transaction with Chrysler.

Third-quarter revenue was down 7% to 23.8 billion euros. The company blamed the weak numbers on an “abrupt decline” in sales in North America and the major markets in Europe.

The company expects to earn 6 billion euros in 2008, rather than the 7 billion euros it anticipated earlier this year. Daimler will also suspend its buyback program at this time, falling short of its goal to buy back 10% of its shares.

Sales of the Mercedes-Benz brand fell by 8%, while sales of the fuel-efficient Smart car brand increased by 20%. The Stuttgart-based company’s truck division increased sales by 4% in the quarter.