Manufacturing group announces second-best year of all time for vehicle sales
Daimler Buses achieved its secondbest sales result ever in 2011, selling a total of 39,740 vehicles, 2% more than in 2010. This was achieved despite difficult sales conditions for complete buses. The only time sales were even higher was in 2008, when almost 40,600 units were delivered. Daimler Buses claims to be the world’s leading supplier of buses weighing more than 8.0 tons GVW.
Worldwide sales of buses were 311,000, an increase of 2% largely due to a boom in Latin America while the bus market in Western Europe remained in a slump because of the financial and debt crisis. Market development was similarly negative in North America, which has also suffered from public sector budget constraints.
In Latin America, the division boosted sales of Mercedes-Benz chassis by 8% to 25,000 units. Sales were also buoyed by purchases made earlier than planned due to the introduction of the Euro 5 emissions standard in Brazil in 2012. Market share remained at a high level of around 43% in 2011. Substantial increases were also posted in Mexico. Business was good in Turkey, where sales rose by 55% to the record figure of 1,100 buses.
By contrast, Daimler Buses was unable to buck the downward trend in Western Europe and North America. Sales dropped in Western Europe by 17% to 5,900 vehicles and chassis. Sales of citybuses declined steeply as the public sector continued to be negatively influenced by budget restraints. Only 600 buses were sold in North America, nearly a third less than in 2010. Budgetary constraints were also the defining factor in this market.
“In 2011 we kept pace with the global market as a whole,” says Hartmut Schick, head of Daimler Buses. “We captured an impressive 12% of the global market, which makes us the world’s number one bus supplier. More specifically, we clearly maintained our leading position in the core markets.”
Daimler Buses’ revenues and earnings both declined in 2011. At €4.4bn (2010: €4.6bn), revenues were slightly lower than in the prior year. These figures are the result of two contrary developments. Whereas the demand for chassis rose substantially, it dropped considerably for complete buses, which generate significantly more revenue per bus. This development therefore had an even bigger impact on earnings than on revenues, and EBIT declined from €215m to €162m. “2011 was clearly a chassis year, while the business with complete buses was very sluggish, particularly in Europe,” comments Schick.
Even though Daimler Buses’ return on sales dropped to 3.7% in 2011 (2010: 4.7%), the division’s target for 2013 remains at 6%. “We have the right strategy, and we will systematically pursue it,” says Schick. A key element of this strategy is the GLOBE 2013 growth and efficiency offensive. This “fitness program” will be rolled out at all locations and along the entire value chain. “We will leave no stone unturned and make sure that nothing is omitted,” states Schick.
One of the aims of this strategy is to more strongly interlink the European production network, which has locations in Germany, Turkey, and the Czech Republic. The two German bus plants in Mannheim and Neu-Ulm will remain an integral part of this network, which is why the division invested extensively there in recent years as well as in Hosdere, Turkey.
“GLOBE 2013 will further increase the competitiveness of the German locations. We are making Mannheim and Neu-Ulm sustainably fit for the future. Daimler Buses is the only major bus manufacturer to remain faithful to Germany as a production location,” says Schick.
Gearing up for Euro VI
As part of GLOBE 2013, Daimler Buses will exploit existing growth potential in its traditional markets and further expand its business operations into new ones. In response to the introduction of the Euro VI emissions standard, the division is launching a product offensive in the city bus segment as well as in the coach market. Daimler Buses claims its Travego Edition 1 is the first Euro VIcompliant coach. “Our products precisely meet our customers’ wishes, and we will systematically exploit growth potential,” says Schick.
Big growth opportunities are also offered by new markets such as India and China. After having introduced two travel coach models in India since 2008, Daimler Buses is now launching the first Mercedes-Benz citybus there. India is the world’s second-largest bus market, with a current volume of about 46,000 buses per year. Experts predict this volume will grow to 80,000 units in 2020.
By then, the bus market in China is expected to increase from its current level of more than 100,000 units to around 150,000 units. Daimler Buses is taking a multitrack approach in order to exploit the opportunities in China. The division will begin selling chassis in the country this year. In addition, Daimler Buses will talk with the Chinese company Foton about joint projects. Foton and Daimler are already co-operating in the truck sector. The two firms are partners in the joint venture company Beijing Foton Daimler Automotive Co. Ltd., which produces Auman brand medium-duty and heavyduty trucks in China.
Daimler Buses expects sales to be negatively affected by the introduction of the Euro 5 emissions standard in Brazil this year, whereas business will probably improve slightly in Western Europe.