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Sunday , 17 December 2017
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Daimler Trucks plans continued success in 2015

  • Strong increase in operating profit (EBIT) by 18% in 2014 , RoS at 6.4%
  • With sales of almost 500,000 trucks in 2014 target for 2015 virtually reached
  • Significant increase in sales and profit expected for 2015
  • Technological leadership, global presence and consistent implementation of platforms forms basis for further profitable growth
  • Dr Wolfgang Bernhard: “We are concentrating on our strengths and are offering our customers all over the world trucks with leading technologies, the lowest operating costs and top quality. This is paying off.”

Stuttgart – Daimler Trucks achieved its objectives again in 2014 – and did this in a heterogeneous and partly very difficult market environment. While unit sales and revenues rose slightly last year, earnings before interest and taxes (EBIT) from continuing operations grew significantly by 18% to €2.07 billion (PY €1.75 bn) . Return on sales thus rose to 6.4% (PY 5.6%).

Daimler Trucks expects significant increases in unit sales and profit for 2015 as well. The Daimler AG business division with six independent and two partner brands will profit from the consistent implementation of its strategy and the continuously improved efficiency of its operative units. The successfully implemented excellence program DT#1 will thus show its full effect in the current year. Technological leadership, global market presence and intelligent platforms – the world market leader in trucks is relying on these three pillars for the continued expansion of its position in the future.

Dr Wolfgang Bernhard, Member of the Board of Management of Daimler AG for Trucks and Buses, said at the traditional yearly press conference of the division: “In 2014, we achieved what we promised – despite partly weaker markets – and improved our results significantly. In 2015, we plan to stay on this successful course and again increase our unit sales and operating profit. We will thus continue to come closer to our long-term objectives step by step.”

In the year 2020, Daimler Trucks is looking to sell 700,000 units and aims to achieve in the medium term a return on sales of 8% over the cycle.

Positive expectations for 2015 despite great regional differences in the markets

As in 2014, Daimler Trucks expects to see strongly heterogeneous developments in the individual markets in 2015. In the NAFTA region, an increase in the range of 10% is expected for the overall truck market in the medium-duty and heavy-duty segments (Class 6 to 8), whereas Europe should remain at the 2014 level. A slight market drop is indicated for Japan. The weak period in Brazil will persist. A decrease in the range of 10% is expected compared with the previous year.

The significant sales growth expected by Daimler Trucks should be carried in particular by the business in the NAFTA Region , where Daimler Trucks expects significantly higher sales compared with the previous year. New products like the Western Star 5700 XE and established successful products like the Freightliner Cascadia Evolution should make a significant contribution to securing market leadership in this region.

A strong sales argument in the NAFTA Region is the fully integrated powertrain. Daimler Trucks is the only manufacturer to offer an optimally tuned combination of engine, transmission, and axles from a single source – the most efficient solution on the market, which is also enjoying an excellent reception from customers. In the case of the best-selling truck in North America, the Freightliner Cascadia Evolution, every fourth new truck is already equipped with such an integrated powertrain.

The sales figures for Daimler Trucks should also develop positively in Asia. In Indonesia, one of the main markets of FUSO in Asia, the expectations are of a recovery in unit sales for Daimler Trucks. In India, the further expansion of the BharatBenz sales network from 80 to 100 dealers should lead to a significant increase in sales. In addition, the extended offering of FUSO trucks from Indian production should ensure additional momentum after the 2015 start of exports of FUSO trucks “Made in Chennai” to Latin America and the Near and Middle East. On the other hand, the growth dynamics in Japan will probably slacken off perceptibly.

The situation in Western Europe and Latin America remains challenging. But thanks to fuel-saving products, a high customer acceptance and a flexible production network, Daimler Trucks expects that it will be able to maintain its very good position in the Western European market. In Brazil, the continued lack of economic growth and more unfavorable financing conditions should weigh on market demand and thus also on the sales of Daimler Trucks.

“We will consistently focus on our strengths. We are very well positioned worldwide and offer our customers around the world trucks that are optimally tailored to their requirements with leading technologies, the lowest total cost of ownership and top quality. Through the consistent implementation of our platform strategy, we want to utilize our potential even further in coming years. Our customers and our company will benefit from that”, noted Dr. Bernhard.

Platform strategy will be promoted

Daimler Trucks has great brand diversity, a strong brand presence and the highest unit numbers in the industry as global market leader, and is thus in a good starting position for the utilization of platforms. On the basis of well proven technology Daimler Truck is able to quickly enter new markets. This is a major advantage of the modular system. At the same time, economies of scale and efficient production can be achieved. In recent years, Daimler Trucks has already introduced a platform for heavy-duty engines in North America, Europe and Japan. A second example is the automated powershift transmission, which is meanwhile being used not only in Mercedes-Benz trucks but as DT12 also in Daimler trucks of the Freightliner and Western Star brands in North America. However, the plans extend even further and also include intelligent platforms for medium-duty engines, cabs, electronics and chassis.

Strong incoming orders, but uncertainties remain

A reason for cautious optimism towards the full year 2015 is the orders intake in the fourth quarter of 2014, which jumped by 45% year-on-year to around 173,000 units. This has created a solid basis for the desired sales growth in the current cycle.

However, the political and economic uncertainties still remain and will also continue to affect the investment propensity of truck customers. These include the Ukraine crisis and conflicts in the Middle East as well as the pronounced weakness of the large economies in Latin America, led by Brazil and Argentina.

Successful year 2014 – growth in unit sales, revenue and profit

Despite the partly weaker markets, 2014 was a successful year for Daimler Trucks. The announced targets were achieved; unit sales and operating profit were above the previous year’s level. Unit sales went up by 2% to around 496,000 units, the highest level since 2006. Thus, the target of 500,000 sold trucks set for 2015 has also virtually been achieved a full year earlier. Thanks to its global presence, Daimler Trucks was able to overcompensate for weaker markets like Brazil and Europe with strong performance, especially in North America and Japan.

In line with the sales increase, revenues also grew by 3% to €32.4 billion (PY €31.5 bn). Earnings before interest and taxes from current operations (EBIT) grew over-proportionately by 18% to €2.07 billion (PY €1.75 bn). Thanks to the profitable growth, return on sales from the current business rose to 6.4% (PY 5.6%). The Daimler Trucks #1 (DT#1) excellence program made a significant contribution to the higher earnings. At the end of 2014, 80% of the target of €1.6 billion profit contribution was achieved as planned. DT#1 is to unfold its full effect starting from the current year.

Records in the NAFTA Region

In Western Europe, Daimler Trucks managed a slight increase in market share to 24.4% in the difficult market environment (PY 24.1%) and solidified its Number One position. Sales lagged 13% behind the previous year at 57,400 (PY 65,900) units. By the generally weak economic development and effects from the introduction of Euro VI in 2014 the truck impacted the market negatively. The economic weakness also impacted the truck market in Latin America. Nevertheless, Daimler Trucks managed to raise its market share in its main market Brazil to 25.8% (PY 24.7%). Sales in the land of the Sugarloaf Mountain dropped by 17% to 32,200 (PY 38.800) units.

On the other hand, business in the NAFTA Region developed very positively in 2014. Here, unit sales grew by 19% to a record high of 161,500 (PY 135,200) vehicles. With a market share of 37.2% (PY 38.2%) Daimler Trucks was again the undisputed market leader for medium-duty and heavy-duty trucks. The Freightliner Cascadia Evolution, which is impressing customers with extremely competitive total costs of ownership, contributed significantly to the sales success.

Overall, the Daimler Trucks business also developed positively in Asia, with a 3% increase in deliveries to 167,000 vehicles. Japan and India reported higher unit sales numbers. In Japan they climbed by 14% to 43,900 units (PY 38,300 units). In India, the sales of BharatBenz trucks shot up by 59% to 10,300 vehicles (PY 6,500 units) driven by the expansion of the product portfolio by five more models and the growth of the dealer network to about 80 operations. In the meantime, BharatBenz has conquered third place for heavy-duty trucks and a market share of 5% in the Indian market. Furthermore, FUSO trucks from production in the Indian city of Chennai are also being exported to other countries. Until the end of 2014 more than 1,000 of these FUSO trucks have been sold outside India.

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