Daimler Trucks on Road to Growth with Global Excellence
Stuttgart
Mar 18, 2011
  • From 2011 onwards: Regional growth with a focus on emerging markets
  • Modular system ensures the right products for every market
  • Strategic objective for 2013: “Get to 8!”
Stuttgart — The global economy recovered in 2010, although the pace of this positive development varied greatly from region to region. The economic upturn led to a significant increase in demand for transport services, and thus for commercial vehicles. Whereas the European truck market grew moderately in 2010, the truck market in Brazil expanded by more than 50 percent compared to the prior year. Demand for trucks in North America and Japan increased substantially. Daimler Trucks profited considerably from the worldwide recovery of the commercial vehicle market in 2010.
Daimler Trucks sold 355,263 vehicles around the world in 2010, an increase of 37 percent on the prior year.
These sales generated revenues of €24.024 billion (+31 percent) for the division, enabling it to successfully defend its position as the world’s leading manufacturer of medium-duty and heavy-duty trucks. At €1.323 billion, the division’s EBIT (including one-time charges) was positive and significantly higher than the prior year’s figure of
-€1.001 billion.
Andreas Renschler, the member of the Daimler AG Board of Management responsible for Daimler Trucks and Daimler Buses, reviewed business developments at Daimler Trucks today in Stuttgart, in addition to presenting the division’s strategy for the coming years: “When the economy grows, the need for transport services grows along with it. We are among the top three manufacturers in terms of market share in all of our core markets, and all of our business units have returned to profitability.”
In 2010: Increases in sales, revenue, and profitability in all regions
The Global Excellence strategy enabled Daimler Trucks to prepare early on for the cyclical changes in the commercial vehicle industry and thus to conquer from the crisis in good shape.
Growth will pick up in 2011. The global truck markets are growing, and Daimler Trucks’ Global Excellence strategy has laid the foundations for the division’s growth in the years ahead.
Last year the focus remained on managing market cycles and achieving operational excellence. Efficiency gains were achieved through more rigorous cost management, implementation of numerous flexibility instruments at production locations, and extensive programs at the individual business units.
As a result, all operating units recorded increases in sales, revenues, and profitability. Daimler Trucks therefore begins the new business year in a completely new position of competitive strength.
From 2011 onward: Regional growth with a focus on emerging markets
The focus in 2011 and beyond will be on profitable growth in all of its dimensions — i.e. quantitative und qualitative, in traditional and new markets, and with new products and services.
Along with the consistent expansion of its activities in the core markets, Daimler Trucks is also making significant progress in the RIC countries and other growth markets. “Turkey is a core market for Mercedes-Benz trucks and a true tiger nation,” said Renschler. “The country has already reached 15th place in the rankings of the world’s largest economies, and for us it’s number three in terms of Mercedes-Benz truck sales.” Brazil is the most important market for Mercedes-Benz trucks.
In an effort to meet the growing demand for heavy-duty long-haul trucks in both markets, Mercedes-Benz began producing the Actros in Aksaray, Turkey, in December 2010, and will also start building the same model in Juiz de Fora, Brazil, in 2012. This expansion of the production network will increase the flexibility and competitiveness of Mercedes-Benz trucks.
Russia is the biggest growth market in Europe at the moment — and Fuso Kamaz Trucks Rus has been successfully manufacturing and marketing the Fuso Canter there since June 2010. Roughly 800 of these light trucks were sold in Russia last year. In addition, Mercedes-Benz Trucks Vostok officially opened a new plant in Chelny in mid-March 2011, and the first Mercedes-Benz Actros models are now being assembled there.
In February 2011, Daimler Trucks’ fifth brand — BharatBenz — was unveiled in India. Over the next five years Daimler Trucks will invest a total of approximately €700 million in India, where the division will also begin manufacturing trucks of 6–49 tons GVW at the new plant in Chennai in 2012.
A major milestone was achieved in China last year, when a new joint venture agreement was signed with Foton. “We’re very confident that we will receive the business license for the joint venture in summer 2011,” said Renschler. “We’ve also got the right partner here with Foton, which is already building 100,000 trucks. A second plant is now under construction. This means that our joint venture will in the future have a total annual production capacity of 160,000 trucks.”
In addition to its operations in its traditional markets and in the RIC countries, Daimler Trucks is also focusing on the new growth markets of the future.
“We’ve identified ten Future Focus Markets for Daimler Trucks,” Renschler explained. We essentially based our selections on three criteria: overall economic outlook, local truck market volume, and initial business conditions in the respective markets.” The ten Future Focus Markets are: Algeria, Argentina, Colombia, Malaysia, South Korea, Syria, Thailand, Ukraine, Venezuela, and Vietnam.
Modular system ensures the right products for every market
Regardless of the prevailing economic situation, Daimler Trucks consistently invests in new products and research and development. In fact, the division will be renewing virtually its entire product portfolio over the next 24 months. The focus here will be on further improving fuel consumption, safety, and sustainability, as well as the expansion of aftersales operations and customer-oriented services.
Daimler Trucks’ global development network, as well as the division’s decades of experience with cross-brand projects, have led to the creation of a modular system that generates synergies while still enabling the development of products precisely tailored to specific customers and market requirements.
DTNA is presenting two new trucks this month: the Western Star 4700 and a new Freightliner truck for the vocational segment. In addition, the new Fuso Canter went on sale in the U.S. and Canada in mid-March.
Synergies are now being generated with powertrain components as well. The new generation of heavy-duty truck engines has streamlined the previous portfolio of four engine families produced at four plants down to just one family of engines manufactured at two locations. This Heavy Duty Engine Generation is now being used successfully at Fuso in Japan and at DTNA in the U.S. The European version of the Heavy Duty Engine Generation was presented yesterday at the Mercedes-Benz engine plant in Mannheim. This is the new Mercedes-Benz engine generation, which already meets the Euro 6 emission standard that is scheduled to go into effect in 2014.
Strategic objective for 2013: “Get to 8!”
Daimler Trucks has set itself the goal of achieving an 8 percent return on sales across the business cycle starting in 2013. Renschler explained how the division will get there: “We’ve established a clear roadmap in the form of our ‘Regional Champion Approach,’ reducing fixed costs and thus the break-even point, and substantially investing in new products and technologies.”
As part of the Regional Champion approach, all of the division’s business units plan to either defend or take over the top position in their respective markets.
In addition, systematic cost management measures, further improvements at all units, exploitation of synergy potentials, the launch of the new product generations, penetration into new growth markets, and continued success in traditional markets will all contribute to the achievement of Daimler Trucks’ goals.
“We are beginning the year 2011 from a position of strength,” said Renschler. “We expect to see significant growth in the truck market, especially for medium-duty and heavy-duty trucks. Our level of incoming contracts in Europe and North America is currently exceeding our expectations. And if this exceptionally positive trend continues, we may have to adjust our market forecast.”
Renschler added, “No other truck manufacturer today offers as broad-based a portfolio with customized products and technologies as Daimler does — and no other commercial vehicle producer has a global service network whose scope and density come close to ours. So who else but the inventor of the truck is better positioned to actively shape the future of the transport industry?”
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