Daimler Trucks seeking to further strengthen leading position in 2016

4 mins read

The FINANCIAL — Daimler Trucks achieved new record results in 2015: the EBIT from ongoing business grew by 32 percent last year – to 2.7 billion euros (prior year: 2.1 billion euros).

The operating margin improved to 7.3 percent (p.y. 6.4 percent). And sales rose to 502,478 units (p.y. 495,668), thereby exceeding the mark of half a million trucks that had been a target for a long time. Thus, Daimler Trucks has managed to increase sales by around four percent between 2013 and 2015 – while the global market excluding China has actually contracted by around four percent over the same period. Some of the key markets developed far worse than expected in 2015: in Indonesia, demand plummeted by 32 percent compared to the previous year, and in Brazil the drop was even higher, at 49 percent, according to Daimler.

“Despite a challenging market environment, 2015 was one of the best years in the history of Daimler Trucks. We owe this to our outstanding products and services, strong sales performance and continuous efficiency measures. Our team will continue to follow exactly the same course in 2016 – and that will ensure our success this year as well,” said Dr Wolfgang Bernhard, Member of the Board of Management of Daimler AG with responsibility for Daimler Trucks & Buses, at the business unit’s traditional annual press meeting.

High levels for sales and profit targeted in 2016 too – despite difficult market environment

In 2016, Daimler Trucks wants to maintain the high level of sales and EBIT from ongoing business achieved last year. This is an ambitious target, as the market environment is still a difficult one – probably even more difficult than in 2015. The truck manufacturer expects demand for medium and heavy-duty trucks in the relevant markets overall to decline slightly.

Significant regional differences are expected concerning the performance of the truck market: Within the triad markets, a slight increase in demand in 2016 is only anticipated in Europe. In Japan, a level on a par with the previous year is expected. In the NAFTA region, the medium and heavy-duty truck segment (classes 6 to 8) is forecast to contract by about ten percent during the current year. As far as the emerging markets are concerned, Indonesia is expected to remain at the low level of 2015. The outlook is even worse for Brazil where, following last year’s heavy downturn, the market is predicted to shrink even further – probably by around ten percent.

Wolfgang Bernhard: “Our strategy is bearing fruit”

“In this challenging environment, we are looking to stabilise our business at a high level by further strengthening our leading position and expanding our market shares,” said Dr Bernhard. “With our focus firmly placed on consolidating our technological leadership, our global market presence and our intelligent platforms, we are very confident to achieve this goal – for we have the right strategy and our strategy is bearing fruit.”

Connectivity offensive to strengthen technology leadership

The world’s most successful truck manufacturer provided impressive proof of its technological leadership in autonomous driving in 2015. In May it held the world premiere of the Freightliner Inspiration Truck, the world’s first self-driving truck approved for road use in the U.S. state of Nevada. Next, in October came the debut of the first self-driving production truck, the Mercedes-Benz Actros with Highway Pilot, on the A8 motorway near Stuttgart in Germany.

Connecting trucks to the cloud opens up new opportunities for all involved in truck transport: manufacturers, customers, financial partners, repair and maintenance facilities as well as authorities. With real-time data, connected trucks will improve the performance of entire transportation logistics networks. Thanks to services such as FleetBoard and Detroit Connect, Daimler Trucks already holds a leading position in truck connectivity. This year Daimler Trucks will strengthen and build on that position with new products and services.

“120 years ago, we invented the truck – and we will remain pioneers in our industry in the future. Connecting our products to the Internet of Things is critical to that end. With Fleetboard and Detroit Connect we’re already the market leader in intelligent truck telematics today. We intend to build on this position. We expect to take the same leadership role in connectivity as we have taken in autonomous driving,” said Dr. Bernhard.

Growth offensive in highly promising emerging markets

Daimler Trucks is systematically expanding its global market presence. The latest example are six new regional centres reinforcing sales and service close to customers in emerging markets with promising growth potential in Latin America, Africa, Asia and the Middle East. Daimler Trucks announced the six new centres a year ago, and three of them have already entered operation in the meantime.

The Regional Centre for Commercial Vehicles in Dubai is responsible for sales and after-sales in 19 markets in North Africa and the Middle East since October 2015. In February 2016 the new Regional Centre for Eastern, Central and Western Africa was opened in Nairobi, Kenya. From here it manages 41 countries with a total population of 770 million people. This region’s high growth potential in the long term is obvious from its age distribution alone: two thirds of the population are aged 25 or younger – a proportion that is higher than anywhere else in the world.

February also marked the inauguration of the Regional Centre for Commercial Vehicles in Pretoria, South Africa. Sales and service for nine markets in Southern Africa will in future be steered from Pretoria. Experts forecast an annual economic growth of over 4.5 percent towards the end of this decade. The region continues to be rich in important natural resources such as copper, oil and gas.

Along with its growth offensive in these highly promising emerging markets, Daimler Trucks will also be fully capitalising on the advantages resulting from its multi-brand presence as competition in this region intensifies. The fourth Regional Centre is scheduled to open in early March. The Singapore-based team will in future be responsible for sales and service for 18 markets in Southeast Asia. Further centres will follow in the course of this year in Latin America and Southern Asia.

Use of intelligent platforms continues to pay off

Daimler Trucks continues to systematically move forward with its intelligent platforms. The DT12 automated transmission revolutionised the US market and is in very high demand there. It is manufactured locally in Detroit since November 2015. Last year more than 40 percent of all Freightliner Cascadia trucks sold in the NAFTA region were equipped with the automated DT12 transmission.

In addition, Daimler Trucks will also offer its medium-duty engines in North America starting from this year. In a later step, they will also be produced in Detroit from 2018. The new engines with the designations DD5 and DD8 are further proof of the successful strategy employed by Daimler Trucks of developing components for worldwide use and adapting them locally. Towards the middle of this year, Daimler Trucks plans to present further projects that form part of its global platform strategy.


Leave a Reply