The Daimler Group

Daimler AG is the parent company of the Daimler Group and is domiciled in Stuttgart (Mercedesstraße 137, 70327 Stuttgart, Germany). The main business of the Company is the development, production and distribution of cars, trucks and vans in Germany and the management of the Daimler Group. In addition to Daimler AG, the Daimler Group includes all the subsidiaries throughout the world in which Daimler AG has a direct or indirect controlling interest. Through those companies, we conduct for example our business with buses and financial services. The management reports for Daimler AG and for the Daimler Group are combined in this management report.

Daimler can look back on a tradition covering more than 125 years, a tradition that extends back to Gottlieb Daimler and Carl Benz, the inventors of the automobile, and features pioneering achievements in automotive engineering. Today, the Daimler Group is a globally leading vehicle manufacturer with an unparalleled range of premium automobiles, trucks, vans and buses. The product portfolio is completed with a range of tailored automotive services.

With its strong brands, Daimler is active in nearly all the countries of the world. The Group has production facilities in a total of 19 countries and approximately 8,000 sales centers worldwide. The global networking of research and development activities and of production and sales locations gives Daimler considerable potential to enhance efficiency and gain advantages in international competition, resulting in additional growth opportunities. For example, we can apply our green drive technologies in a broad portfolio of vehicles while utilizing experience and expertise from all parts of the Group. In the year 2012, Daimler increased its revenue by 7% to €114.3 billion. The individual divisions contributed to this total as follows: Mercedes-Benz Cars 52%, Daimler Trucks 26%, Mercedes-Benz Vans 8%, Daimler Buses 3% and Daimler Financial Services 11%. At the end of 2012, Daimler employed a total workforce of more than 275,000 people worldwide.

The products supplied by the Mercedes-Benz Cars division range from the high-quality small cars and innovative e-bikes of the smart brand to the premium automobiles of the Mercedes-Benz brand and to the Maybach luxury sedans. The main country of manufacture is Germany, but the division also has production facilities in the United States, China, France, Hungary, South Africa, India, Vietnam and Indonesia. Worldwide, Mercedes-Benz Cars has 17 production sites at present. In the context of extending our product range in the compact-car segment, our new plant in Kecskemét, Hungary went into operation in 2012 and the new B-Class has been produced there since April. In the medium term, we anticipate significant growth in worldwide demand for automobiles and above-average growth in the premium car segment. To ensure that we can participate in this development, we are creating additional production capacities, especially in China, the United States and India. The most important markets for Mercedes-Benz Cars in 2012 were Germany with 20% of unit sales, the other markets of Western Europe (24%), the United States (21%) and China (14%).

As the biggest globally active manufacturer of trucks above 6 metric tons gross vehicle weight, Daimler Trucks develops and produces vehicles in a global network under the brands Mercedes-Benz, Freightliner, Western Star, Fuso and BharatBenz. The division’s 27 production facilities are in the NAFTA region (14, thereof 11 in the United States and 3 in Mexico), Europe (7), Asia (3), South America (2) and Africa (1). In Juiz der Fora in Brazil, the Mercedes-Benz Actros heavy-duty truck and the medium-duty Accelo have been produced for the Latin American market since early 2012. In our new truck plant in Chennai, India, trucks of the new BharatBenz brand have been rolling off the production lines since June 2012. By the year 2014, we will produce 17 different BharatBenz models in India in weight classes from 6 to 49 metric tons. In China, Beijing Foton Daimler Automotive Co., Ltd. (BFDA), a joint venture with our Chinese partner Beiqi Foton Motor Co., Ltd., has been producing trucks under the Auman brand since July 2012. Daimler Trucks’ product range includes light, medium and heavy trucks for local and long-distance deliveries and construction sites, as well as special vehicles for municipal applications, the energy sector and fire services. Due to close links in terms of production technology, the division’s product range also includes the buses of the Thomas Built Buses and Fuso brands. Daimler Trucks’ most important sales markets in 2012 were Asia with 35% of unit sales, the NAFTA region (29%), Western Europe (13%) and Latin America excluding Mexico (10%).

Daimler Trucks’ area of responsibility also includes our investment in Tognum, a globally leading supplier of complete systems in the field of industrial engines. This company is controlled by Engine Holding GmbH, in which Daimler and Rolls-Royce Holdings plc each holds a 50% interest.

The product range of the Mercedes-Benz Vans division in the segment of medium and heavy vans comprises the Sprinter, Vito, Viano and Vario series. In 2012, we expanded our portfolio with the addition of a city van, the Mercedes Benz Citan, making us a full-range supplier in the vans business. The division has production facilities at a total of seven locations: in Germany, Spain, the United States, Argentina, China in the context of the 50:50 joint venture Fujian Benz Automotive Co., Ltd, and France in the context of the strategic alliance with Renault-Nissan. Starting in the first half of 2013, the Mercedes-Benz Sprinter will be produced under license also by our partner GAZ in Russia. The most important markets for vans are in Europe, which accounts for 75% of unit sales. As part of the “Vans goes global” business strategy, we are also increasingly developing the growth markets of South America and Asia as well as the Russian van market through appropriate distribution and production activities in those regions. We intend to continue our growth also in the American van market, where the Sprinter is sold not only as a Mercedes-Benz vehicle, but also under the Freightliner brand.

The Daimler Buses division with its brands Mercedes-Benz and Setra continues to be the world’s leading manufacturer in its core markets in the segment of buses above 8 tons. The product range supplied by Daimler Buses comprises city and intercity buses, coaches and bus chassis. The most important of the 13 production sites are in Germany, France, Spain, Turkey, Argentina, Brazil and Mexico. In 2012, 45% of Daimler Buses’ revenue was generated in Western Europe, 25% in Latin America (excluding Mexico) and 11% in the NAFTA markets. While we mainly sell complete buses in Europe, our business in Latin America, Africa and Asia is focused on the production and distribution of bus chassis. In view of continuously falling demand for city buses in North America over recent years, we have decided to cease production of Orion buses in the United States and Canada. The US bus manufacturer Motor Coach Industries International (MCI) was awarded the rights to exclusive sales of Setra coaches in the United States during the year under review; in return, we have acquired a 10% interest in MCI.

The Daimler Financial Services division supports the sales of the Daimler Group’s automotive brands in 40 countries. Its product portfolio primarily comprises tailored financing and leasing packages for customers and dealers, but it also provides services such as insurance, fleet management, investment products and credit cards, as well as car sharing and other mobility services. The main areas of the division’s activities are in Western Europe and North America, and increasingly also in Asia. In 2012, more than 40% of the vehicles sold by the Daimler Group were financed or leased by Daimler Financial Services. Its contract volume of €80 billion covers more than 2.8 million vehicles. Daimler Financial Services also holds a 45% interest in the Toll Collect consortium, which operates an electronic road-charging system for trucks above 12 metric tons on highways in Germany.

Daimler AR2012 Consolidated revenue by division

Through a subsidiary, Daimler held a 22.4% equity interest in the European Aeronautic Defence and Space Company (EADS), a leading company in the aerospace and defense industries, until December 6, 2012. In economic terms, Daimler owned a 14.9% stake in EADS, because until that date, a consortium of national and international investors owned a one-third interest in the subsidiary that holds the EADS shares. On December 6, 2012, Daimler AG reduced its shareholding in EADS to 7.5%, as previously announced in November 2011. 61.1 million EADS shares were sold through an accelerated book building process to the KfW banking group, private investors in the consortium and institutional investors.

Through a broad network of holdings, joint ventures and cooperations, Daimler is active in the global automotive industry and related sectors. The statement of investments of Daimler in accordance with Section 313 of the German Commercial Code (HGB) can be found in the notes to the Consolidated Financial Statements