BERLIN (Reuters) - Daimler (>> Daimler AG) Chief Executive Dieter Zetsche said the German car and truck maker would continue to cut costs as its premium brand Mercedes-Benz seeks to narrow the profitability gap with rivals.

The Stuttgart-based carmaker has fallen behind peers since it emerged from a messy divorce from Chrysler in 2007. Mercedes has been overtaken by both Audi (>> Volkswagen AG) and BMW (>> Bayerische Motoren Werke AG) in both sales and profits.

"Our efficiency measures are having an impact across all divisions and we will structurally safeguard and expand these measures," Zetsche told shareholders at the company's annual general meeting on Wednesday.

The Mercedes-Benz Cars unit's earnings before interest and tax (EBIT) were 6.2 percent of sales in 2013, lagging Audi's 10.1 percent and BMW's automotive margin of 9.4 percent.

Stuttgart-based Daimler has already been targeting 4 billion euros ($5.5 billion) in cost cuts. By the end of 2014, it aims for annual savings of 2 billion euros at Mercedes-Benz Cars and 1.6 billion euros of cost cuts and revenue gains at Daimler Trucks.

The company relaunched its A-Class compact late in 2012, unveiled a new S-Class flagship limousine in July 2013 and launched a new C-Class in March.

As a result, first-quarter sales at Mercedes-Benz rose 15 percent.

In February, Daimler said it expected group earnings before interest and tax to increase "significantly" in 2014 from the 7.9 billion euros it reported for last year.

(Reporting by Edward Taylor; editing by Maria Sheahan and Tom Pfeiffer)

Stocks treated in this article : Bayerische Motoren Werke AG, Daimler AG, Volkswagen AG