Mannheim, June 28, 2012

Daimler Trucks enters the next phase of Global Excellence and will start to reap benefits from 2013 onwards

• Daimler Trucks Number One (DT#1) defines a clear roadmap to further strengthen the division’s global leadership position.
• DT#1 targets benefits of €1.6 billion from increased sales and aftersales as well as from reduced fixed costs and greater economies of scale.
• DT confirms FY 2012 guidance and 8% margin target for 2013.

Daimler Trucks welcomes analysts and investors today at its engine plant in Mannheim to outline how the division expects to achieve its mid-term margin goal of 8% and to expand its leading position in the global truck industry.

Andreas Renschler, Head of Daimler Trucks and Member of the Board of Management of Daimler AG, stated: “Our Global Excellence program has brought Daimler Trucks to a new level – but DT is not stopping there. We want to further strengthen our number one position. A clear roadmap has therefore been defined with DT#1.”

Daimler Trucks can build on its strong market position of being in the top three in all of its markets and number one in EU25 and NAFTA. The two attractive Actros lines have led to market-share increases in Europe, while Fuso is also gaining market share in Japan in the HDT and MDT segments. The division’s sales in the first five months increased by 23% compared with last year, due to an increase of 36% in the NAFTA region and 52% in Asia, with a decrease in Europe and Latin America impacted by a decline of the Brazilian market. DT is confident of achieving 2012 sales clearly above the 426,000 units that were attained in 2011. Daimler Trucks targets sales of 500,000 units in 2013 and 700,000 by 2020.

In the short term, DT expects continued market uncertainty and
volatility. The markets in the NAFTA region and Japan should grow; but
Brazil and Europe remain challenging.

Overall, DT expects the following market development in 2012:
Europe: 0% to -10%
Brazil: -10% to -20%
NAFTA: +15% to +20%
Japan: +15% to +20%

As the global truck industry is expected to grow in the longer term at a rate of around 4% per year, business will continue to progress along a sustainable growth path. Within this development, the importance of the markets Russia, India and China is constantly growing. And DT is ready to collect its share: The joint ventures in China and in Russia with Foton and Kamaz have been established to produce vehicles adapted for those markets. The Indian market is being opened up with the new brand “BharatBenz” – local production has just started at the new plant in Chennai. However, the majority of industry earnings are still expected to come from the markets of North America, Western Europe and Japan, so being successful there is crucial.

Today’s emission standards are not only getting stricter, they are also getting more similar. But as product requirements converge across the regions, less specific technology will be needed for individual markets. So as a truly global player, DT will increasingly benefit from scale advantages over its regional competitors.

For the customers, total cost of ownership (TCO) will become increasingly relevant, as fuel cost now is around 30% of total lifecycle cost (and more than three times the acquisition cost). DT products set the benchmark for fuel efficiency around the globe, and this should translate into a sustainable demand for our products.

DT anticipates a general shift towards higher technological standards for trucks worldwide. The high-end truck segment will continue to grow and the demand for state-of-the-art technology will also gradually increase in Russia, India and China. However, in those three countries, the strongest growth will be in the mid-market segment, which is defined as “modern domestic.” DT can serve this growing segment with BharatBenz products and the Auman trucks from the joint venture with Foton. This represents a huge opportunity for a global truck OEM like DT: It can benefit from its commonality approach and global set of modules and can adapt them to the needs of local customers.

Additionally, DT expects structural growth of the high-margin aftersales business, creating a stable cash flow across the product lifecycle. Together with a promising vehicle lineup, this will increasingly be achieved with a comprehensive range of global and integrated services.

For DT, the Global Excellence program has been and will continue to be the driving force of success. Global Excellence has fundamentally changed the structure of processes and the business model as a whole. This includes improved flexibility of working shift models and of production networks, as well as the successful repositioning of Daimler Trucks North America (DTNA) and Fuso. DT also laid the groundwork for its BRIC expansion and successfully started a global platform rollout with the Heavy-Duty Engine Platform (HDEP). With this project, DT is realizing 80% of commonality. This is a core lever to realize global scale benefits as the powertrain accounts for more than 50% of the cost of a truck.

The next phase is DT#1, which targets €1.6 billion of benefits by 2014  via excellence programs in the operating units and cross-business initiatives designed to support the average margin target of 8%. In order to achieve this goal, DT is building on two main pillars: firstly to take the operating units to the next level to close the gap to the regional champions, and secondly to create new cross-business initiatives (e.g. a stringent portfolio review and global aftersales) to fully leverage the benefits of global scale and turn them into profits. Therefore, around 30% of the DT#1 program target is expected to result from top-line initiatives (e.g. additional sales push in core markets and segments) and 70% from further cost reductions (e.g. material cost, benefits from the modular strategy and reduced production costs).

All in all, Daimler Trucks expects to remain the number one in the global truck market and is targeting sustainable leadership in terms of profitability as well.

You will find the presentation slides of all speakers as well as the link to the audio webcast of the Daimler Trucks Division Day 2012 at the Mercedes-Benz Mannheim plant on our website at www.daimler.com/ir/truckday2012.