2012 was a multifaceted year for Daimler Trucks.The Antos for heavy distribution transportation, the new medium-duty engine generation and the completely new model range of the BharatBenz brand once again demonstrated our innovative capabilities and substantially expanded the product lineup for our customers. The joint venture with Chinese manufacturer Foton took over the production of Auman brand trucks last summer. Despite higher unit sales, EBIT was lower than in 2011.
|Amounts in millions of euros||% change|
|Return on sales (in %)||5.5||6.5||.|
|Investment in property, plant, and equipment||989||1,201||-18|
|Research and development expenditure||1,197||1,321||-9|
|Employees (December 31)||80,519||77,295||+4|
|Unit sales Daimler Trucks|
|In thousands||% change|
|thereof United States||114||97||+17|
|Latin America (excluding Mexico)||46||62||-25|
Another significant increase in unit sales and revenue. After many truck markets had posted strong sales growth in the first half of the year, all core markets saw demand slow down or even decrease in the third and fourth quarters. In Europe, the sovereign-debt crisis and the
resulting economic weakness led to a marked decline in purchases, and economic constraints limited demand in the NAFTA region to the procurement of essential replacement vehicles. Although reconstruction activities led to an upswing in Japan following the earthquake, this development slowed considerably. In Brazil, weak economic growth and the introduction of tougher emissions standards led to a significant drop in unit sales throughout the year. In spite of these difficulties, Daimler Trucks managed to further increase its revenue and unit sales. As a result, the division was able to grow, particularly in Asia and the NAFTA region. We sold 462,000 vehicles during the year under review, or 9% more than in 2011. Revenue totaled €31.4 billion (+9%). Due to lower unit sales in Brazil and Western Europe as well as scheduled expenses for the current product offensive, EBIT of €1.7 billion was 9% below the prior-year level.
Daimler Trucks #1 safeguards the division’s sustainable profitability. With the launch of the “Daimler Trucks #1” excellence initiative, Daimler Trucks aims to become a leader also in terms of profitability. DT#1 is part of the Global Excellence Strategy and encompasses
excellence programs at the individual operating units as well as cross-business initiatives. DT#1 has precise targets and is expected to contribute €1.6 billion in earnings by the end of 2014 from both additional business activities and cost-cutting measures. Daimler Trucks aims to achieve a significant portion of the cost reduction by the end of 2013.
The overall goal of the business units’ growth and optimization programs is to ensure that the division either remains or becomes the market leader in each region. The associated measures encompass the entire value chain.
For example, we have determined that there is great potential in the optimization of production and the reduction of material costs and fixed costs. Moreover, our current product offensive will play a key supporting role as we strive to meet our growth and efficiency targets.
In order to optimally exploit the advantages of our global reach, we have created programs at the various operating units as well as new cross-business excellence initiatives. For example, as part of its module strategy, Daimler Trucks aims to achieve a much higher rate of shared parts in its products without eliminating the key distinctions between the various brands. Reduced complexity and a smaller range of parts generate not only cost benefits in procurement, but also significant economies of scale in production and logistics. Furthermore, we are now realigning our R&D organization to optimally harmonize our development activities with our global platform and module strategy. Closer cooperation, including the systematic sharing of best practices, will also help us achieve our goal in the aftersales business. At the same time, a global growth strategy for component remanufacturing will enable us to exploit additional earnings potential. By expanding our regional activities and product range, we aim to increase the revenue from our remanufacturing business by 30% in the medium term. Finally, we are working on an integrated business model for Asia that will enable us to benefit from the region’s growth potential even more than was previously the case.
Significant growth in worldwide unit sales. (See table 4.04) Weak economic developments combined with the sovereign-debt crisis led to fewer purchases in Western Europe, thus causing the market to contract. At 58,000 units, sales at Daimler Trucks were down by 6% from the
prior-year level. The year-on-year declines were particularly severe in southern European markets such as Italy and Spain. However, those two countries account for only a relatively small share of Daimler Trucks’ sales in Western Europe (6%; 2011: 8%). In contrast, we once again reached or slightly surpassed the prior year’s unit sales in Germany and the Netherlands. Despite facing a challenging market environment, Daimler Trucks was able to maintain its good position. In both Western Europe as a whole and Germany, its home market, Mercedes-Benz strengthened its market leadership by further increasing its market share in the medium and heavy segments. In the year under review, our market share was 22.9% in Western Europe (2011: 22.3%); in Germany it was 39.2% (2011: 37.5%).
The situation was similar in Turkey, where demand was very high in 2011 before dropping last year, particularly in the key heavy-truck segment. As a result, Daimler Trucks saw sales in Turkey fall slightly by 8% to 18,300 units.
Despite this decrease, we substantially increased Mercedes-Benz Trucks’ market share in the country to 45.4% (2011: 37.3%) and consequently extended our market leadership. At the end of August, we also added the Fuso Canter to our truck lineup in Turkey. Thanks to a favorable market environment, we sold 7,100 Mercedes-Benz and Fuso brand vehicles in Russia, representing an increase of more than 30%. This positive development is partly due to our joint venture’s successful cooperation with Kamaz, the country’s market leader for heavy trucks.
In Latin America, a substantial worsening of the overall economy and the introduction at the beginning of the year of tougher emissions standards in the region’s main market, Brazil, caused sales to drop considerably to 46,200 vehicles (2011: 61,900). The change in emission limits
from Euro III to Euro V not only required vehicles to use significantly more advanced technology, but also placed great demands on the infrastructure. For example, it became necessary to ensure the availability of suitable diesel fuel and AdBlue, an important exhaust gas treatment, throughout the country. The Brazilian government responded to the weakening of the economy by substantially improving the terms of the FINAME support program. Favorable financing conditions and short amortization periods are intended to serve as additional sales incentives and should eventually cause the truck business to rebound.
Developments in the NAFTA region were very promising at the beginning of 2012. At the end of the first half of the year, demand for Class 6 to 8 trucks was approximately 30% higher than it had been at the same time in 2011. The relatively high average age of the vehicles in this region
continues to generate demand for substantial numbers of replacement trucks. However, increasing numbers of truck customers postponed their purchases in the second half of the year due to the deteriorating economic outlook. As a result, demand stagnated compared with 2011. Despite these developments, sales of 135,000 vehicles in the NAFTA region represent a substantial increase of 18%. With a market share of 34.0% (2011: 31.9%) for the Class 6 to 8 segment and 32.9% (2011: 30.9%) for heavy-duty trucks, we have further strengthened our leading position in this key market. We significantly boosted sales not only in our main market, the United States, where sales of 113,800 vehicles surpassed the prior-year figure by 17%, but also in Mexico, where sales rose by 28%. Daimler Trucks is the only manufacturer in the NAFTA region which has engines, axles and transmissions completely from its own production (from the component brand Detroit) and can thus offer its customers optimally tailored products.
At 163,700 units, Daimler Trucks sold many more vehicles in Asia this year than in 2011 (134,900). Our vehicle sales were up by 30% in Japan, where demand remained strong this year as a result of the extensive reconstruction work that was necessary following the natural disaster
in March 2011. Our Fuso vehicles gained market share especially in the attractive heavy-duty truck segment (+2.4 percentage points). Despite intensified competition, we greatly increased our truck sales in Indonesia once again, selling a total of 68,500 units there. Although our market share declined slightly in Indonesia, we continue to be the undisputed leader in the overall truck segment with a market share of 43.7% (2011: 48.7%).
One of the high points of 2012 was the start of the production and sales of BharatBenz brand vehicles in India. We put a new production plant into operation in India last April after a record set-up time of only about 24 months. 85% of the parts and components for BharatBenz trucks are manufactured in India. In addition to truck assembly and powertrain production, the facility encompasses an R&D center and a test track. The plant in Chennai has been producing heavy-duty trucks of the new Daimler Trucks brand BharatBenz since the summer of 2012; sales of the vehicles commenced in September. Since early October, the company has also been producing and selling medium-duty trucks. Although not much time had elapsed since sales commenced, we had already sold 1,100 medium and heavy-duty vehicles by the end of the year.
Our premium brand, Mercedes-Benz, is already very successful in the Chinese truck market. Last year, we increased our sales in China above all in the country’s construction vehicle segment. Those vehicles were manufactured at the truck plant in Wörth and adapted for their specific applications. We also sell Fuso models in China. During the year under review, Daimler Trucks sold a total of 6,900 vehicles in China under its various brands, thus increasing its sales volume there by 6%, although the overall market contracted significantly.
BharatBenz - The Brand Film
Our holdings make further progress. Our cooperation with the Chinese truck manufacturer Foton gives Daimler Trucks access to China’s attractive volume segment. After the Chinese Ministry of Commerce had given Daimler and Foton the final approval for a joint venture in the fall of
2011, the partnership’s operational phase began in Beijing in 2012. Since July, the joint venture company Beijing Foton Daimler Automotive Co., Ltd. (BFDA) has been manufacturing all of the Auman brand’s trucks. In addition to completing a second Auman truck production plant, the joint venture will also set up a manufacturing facility for engines in the future. Daimler will contribute its technological expertise, especially in the areas of diesel engines and exhaust gas systems.
Through a partnership between Fuso and Nissan, Daimler Trucks is also continuing to expand its product range in Japan. An agreement signed in November regulates the mutual supply of light trucks. As a result, Fuso will add the Fuso Canter Guts to its vehicle lineup in 2013.
In Russia, Daimler Trucks is benefiting from its modular system as it cooperates with its partner Kamaz. Beginning in 2013, Mercedes-Benz Axor cabs will be installed in Kamaz’s new generation of trucks on the basis of a licensing agreement. Since November 2012, we have also been supplying diesel and natural gas engines as well as axles to Kamaz as part of a supply agreement. In this way, Daimler Trucks is expanding the partnership, which also encompasses two local joint ventures established to produce and sell Mercedes-Benz and Fuso trucks in Russia.
Product offensive proceeding as planned. Besides introducing the new BharatBenz brand, Daimler Trucks also presented numerous new products last year.
The Mercedes-Benz Antos for example is the first vehicle class designed specifically for use in heavy-duty distribution transportation. The Antos is being rolled out with a wide range of EURO VI diesel engines. Featuring three displacements and outputs ranging from 175 kW to 375 kW,
these engines allow customers to select the right powertrain for their needs. In all of the versions, power is transmitted by the fully automated PowerShift 3 transmission. As a result, even trucks and semitrailer tractors that are only occasionally fully loaded have a good operating performance. Specific models are also offered for special applications. For the first time ever, all of the assistance systems used in the Actros long-haulage truck are now also available for distribution transportation.
In May 2012, Daimler Trucks presented the new Freightliner Cascadia Evolution, which becomes available in the US market in 2013. The new truck consumes up to 7% less fuel than the current EPA10 Cascadia model. These fuel savings were demonstrated during a 2,400-mile test drive and have also been confirmed by an independent institute. The large savings were made possible by equipping the truck with the new Detroit DD15 engine and implementing aerodynamic measures.
Also in May, we began selling the new Fuso Canter Eco Hybrid in Japan. The truck has also been available in Europe and other international markets since the third quarter of 2012. This vehicle boasts great fuel efficiency, economy and comfort, thanks to the first-ever combination of a dual-clutch transmission and hybrid drive. As the cleanest vehicle in its class, the Fuso Canter Eco Hybrid generates 30% less nitrogen oxide and particulate emissions than the limit stipulated by Japanese regulations. In addition, it reduces fuel consumption by more than 25% compared with the current Canter model with a conventional diesel engine. The Fuso Canter Eco Hybrid has been awarded prizes by Japanese automotive experts for its innovative technology.
After introducing the new heavy-duty engine generation, Daimler Trucks presented its all-new OM 93x series of medium-duty engines last spring. This is the first time that all of the units of a commercial vehicle engine series meet the future Euro VI emissions standard without exception. The new engines are tailored to meet the requirements associated with light, medium, and heavy-duty distribution transportation; light and medium-duty construction site work; long-haul operations; and city and intercity bus services.
Daimler Trucks also offers a broad range of new and optimized driver assistance systems that provide customers with substantial benefits. For example, Predictive Powertrain Control is an anticipatory cruise control system that reduces fuel consumption by up to 3%. The system can optimize fuel consumption by recognizing the topography of the road ahead. To achieve this goal, the system is also able to change gears.
The third generation of Active Brake Assist (ABA3) enables us to greatly reduce the risk of front-end collisions. ABA3 was enhanced on the basis of the proximity control system. However, unlike the automatic adaptive cruise control, ABA3 independently initiates an emergency braking maneuver if a front-end collision with moving or stationary obstacles appears imminent. The system also warns other drivers on the road by sounding the horn and turning on the hazard warning lights.
After running a successful pilot project in several core markets in Asia and the Middle East, Fuso is now greatly expanding its aftersales business with its Diamond Value Parts brand. Although the quality, reliability, and efficiency of this secondary brand’s spare parts are much better than those of competing products, they are much less expensive than original parts.
Shaping Future Transportation — as far as Daimler Trucks is concerned, this motto means using resources sparingly, reducing emissions of all kinds, and simultaneously ensuring the greatest possible degree of road safety. With its Aerodynamics Truck & Trailer initiative,
Daimler Trucks aims to dramatically reduce wind resistance and fuel consumption. And with the new Actros, Mercedes-Benz has the world’s most fuel-efficient heavy-duty truck in its model range. The vehicle was recently joined by the Aerodynamics Trailer, whose drag coefficient has been reduced by approximately 18%. The prototype Aerodynamic Truck, whose cab is based on the Actros ClassicSpace, also boasts optimized wind resistance. Thanks to better aerodynamics, which have been improved by approximately 12%, the truck’s fuel consumption on highways has been reduced by about 3%. The Aerodynamic Truck and Trailer are currently undergoing further test drives.
At the beginning of 2012, the Environmental Protection Agency certified Daimler Trucks North America’s (DTNA) complete range of Freightliner and Western Star on-highway, vocational and medium-duty trucks as fully compliant with the Greenhouse Gas 2014 (GHG14) regulations. DTNA is the first US truck manufacturer to receive this certification.
There are also plans to further optimize the new Freightliner Cascadia Evolution. When this vehicle is equipped with an automated Detroit DT12 transmission, wide tires with low roll resistance and an aerodynamically shaped semitrailer, it has been shown to have an outstanding fuel efficiency rating of 10.67 miles per US gallon (22 liters/100 km).