As both sales and revenue have increased by 20 per cent in 2011, Daimler Trucks now aims at boosting sales in 2012 – especially in the BRIC countries.
Although both NAFTA and Asian market did well in the first quarter of 2012, the market situation is rather difficult in Europe and in particular in Latin America, according to Daimler Trucks – but the company expects conditions to improve in the second half of the year. Reportedly, Daimler Trucks is on track to reach its strategic return on sales target of 8 per cent as measured across the business cycle. The target figure is a sustainable average that the division aims to achieve from 2013 on.
“In 2012 we will once again prove that our Global Excellence Strategy is working well. We operate worldwide, our by now five truck brands offer the right products for every region, and we are now just hitting our stride in the growth markets of India and China”, said Andreas Renschler, the Daimler Board of Management member responsible for Daimler Trucks and Daimler Buses, based in Stuttgart, Germany.
In India, Daimler Trucks presented the new BharatBenz range a few weeks ago. These “Made in India” trucks are manufactured in Chennai, where Daimler set up a €700 million facility that will commence volume production in the third quarter of 2012.
In December 2011, the Chinese government also gave its final approval for the Beijing Foton Daimler Automotive, Daimler’s joint venture with local truck manufacturer Foton. The two companies will cooperate on producing medium and heavy-duty trucks for the world’s largest commercial vehicle market. These trucks will be sold under the well-established Auman brand. The joint venture will have an annual production capacity of 160,000 units, and the first jointly manufactured truck is scheduled to roll off the assembly line in the third quarter of the year.
In another BRIC country, Russia, the cooperation between Daimler Trucks and the local market leader for heavy-duty trucks, Kamaz, is proceeding well as well. Sales of Mercedes-Benz truck and Fuso Canter models rose sharply in Russia after the Chelny plant in the Russian republic of Tatarstan began assembling these vehicles in 2010. As a result, more than 1,200 Fuso Canter and around 2,800 Mercedes-Benz trucks had been sold in Russia by the end of 2011.
In order to offer customers in Europe’s largest truck market a customized product bearing the familiar Kamaz brand, the partners presented their first joint truck in Moscow last fall. The vehicle is a Kamaz that contains Daimler components which enable it to comply with the Euro V emissions standard and will be launched on the Russian market in 2014.
Around the globe, Daimler Trucks’ platform and module strategy allows it to generate extensive synergies to help the division reach its margin goals. “The message is clear: We aim to become the regional champion wherever we enter the market, and thus also become Number 1 worldwide in our industry,” said Renschler. “Ultimately we want to achieve a sustained average return on sales of 8 per cent per year beginning in 2013 and extending across the business cycle.”
In 2011 Daimler Trucks made considerable progress toward achieving this goal. The return on sales rose to 6.5 per cent from 5.5 per cent in 2010. The return on sales would have even risen to 6.9% had it not been for €32 million in write-offs from the involvement in Kamaz and one-time expenses of €70 million caused by the natural disaster in Japan.
However, Daimler Trucks significantly increased sales, revenues, and earnings compared to the prior year. Vehicle sales substantially exceeded the prior year’s figures in the division’s core regions (NAFTA, Europe, Asia, and Latin America). Total sales worldwide rose by 2 per cent to 425,800 units. Revenues also increased by 20 per cent, to €28.8 billion, while earnings before interest and taxes (EBIT) jumped twice as much, or over 40 per cent, to €1.9 billion.