Daimler (DDAIF) led the European auto sector higher Wednesday as investors reacted to bullish guidance delivered by management at company's annual shareholder meeting.

The maker of Mercedes-Benz cars and trucks said that it has seen a strong start to the year, with unit sales increasing in each period, marking the fourth straight year of sales growth.

Daimler stock rose by more than 1.3% a short time after the opening bell, to change hands at €77.72, outstripping the 0.71% gain of the Stoxx Europe 600 automobiles & parts index.

Key drivers behind the company's sales growth was new Mercedes E-Class Sedan and Wagon models, as well as growing demand for its SUV range.

The Wolfsburg-based firm displaced BMW (BMWYY) as the world's number one retailer of luxury cars last year after Mercedes-Benz sold more vehicles than its rival.

"Together with 282,000 colleagues, we are shaping the transformation of our industry in order to be even more successful," said Dieter Zetsche, chairman of Daimler's supervisory board.

Zetsche described the auto industry as being challenged by opposites, citing the emergence of electric engines as challengers to combustion engines while the concept of autonomous driving competes against the idea of pleasure-driving.

Daimler reiterated its commitment to leading the field in the development of electric vehicles, with a pledge to invest €10 billion ($10.8 billion) in technology and to bring at least 10 models of electric car to market ahead of 2022.

The upbeat tone of the company management came closely on the heels of a turbulent period for Daimler.

Its shares sold off in January in response to a mixed set of full-year results from the company.

It reported revenue of €153.3 billion (£163 billion) for the year ending Dec. 31, topping expectations for a top line of €152.6 billion.

This is while earnings before interest and taxes (Ebit) came in at €12.9 billion, substantially below the Factset consensus for €13.4 billion. Earnings per share were reported at €7.97 against analyst expectations for €8.24.