Annual Press Talk 2015: Mercedes-Benz Vans Record Results in 2014

STUTTGART -- March 17, 2015: In 2014 Mercedes-Benz Vans achieved new records for sales and revenue and surpassed the previous year’s earnings. Despite facing a very uneven market environment worldwide, Daimler’s van division increased unit sales by nine percent to around 295,000 vehicles (2013: 270,000). Revenue also reached a record level in 2014, increasing by six percent to €10 billion (2013: €9.4 billion). EBIT amounted to €682 million, which was eight percent higher than the prior year’s figure (2013: €631 million). Mercedes-Benz Vans plans to significantly increase sales this year, and also aims to greatly exceed last year’s EBIT result.

“2014 was an extremely good year for Mercedes-Benz Vans,” says Volker Mornhinweg, Head of Mercedes-Benz Vans. “We are especially proud to have achieved record levels of sales and revenue as well as very good earnings despite facing a very uneven market environment worldwide. This outstanding development shows that our ‘Mercedes-Benz Vans goes global’ growth strategy is paying off.”

Mercedes-Benz Vans increased unit sales in its key sales region, Western Europe, by 12 percent to over 190,000 vehicles (2013: 169,000). The division was able to gain considerable market share in the region with its Sprinter, Vito, and Citan models for primarily commercial customers and with the Viano and V-Class models for use by private consumers. The division also achieved double-digit sales growth in Germany. Sales there increased by 12 percent to 80,000 units (2013: 72,000), representing a new sales record for the division’s home market. Growth was even more rapid in the second-largest market, the UK. At around 37,000 vehicles (2013: 31,000), sales there were 19 percent higher than in the previous year. Mercedes-Benz Vans also posted strong growth in Eastern Europe, despite its difficult market environment. Sales in the region increased by 14 percent to 30,800 units (2013: 26,000). This figure included 6,700 Sprinter Classic vans that were produced by the unit in Russia. Overall Mercedes-Benz Vans was once again the market leader for mid-size and large vans in Europe, the most important market, with a market share of 18 percent.

Mercedes-Benz Vans also continues to be very successful in the U.S. with the Sprinter. The division sold 25,800 vehicles (2013: 22,800) in the country in full-year 2014, representing an increase of 13 percent. As a result, the U.S. is now the second-largest market for the Sprinter. Last year, Mercedes-Benz Vans increased its market share in the country to the record level of nine percent. The division also did well on the Chinese market, increasing annual sales slightly to 12,800 units (2013: 12,700). However, difficult economic conditions caused sales in Latin America to decline by 18 percent to 16,100 vehicles (2013: 19,600).

The global economy is currently growing at a moderate rate. Mercedes-Benz Vans correspondingly expects the overall demand for vans to remain stable in Europe this year. By contrast, the U.S. market for large vans is expected to grow at a moderate rate. After suffering substantial declines in 2014, the market for large vans is expected to stabilize in Latin America this year.

In view of this situation, Mercedes-Benz Vans plans to increase sales substantially in 2015. The manufacturer particularly expects to substantially boost sales of mid-size and large vans in its core market of Europe. In the commercial sector, this will probably be thanks to the new Vito, while the new V-Class will give sales a boost in the segment for primarily privately used vehicles. Both of these models are now fully available after being launched on the market last year. Additional demand is expected to be generated in the Americas by the new Vito mid-size van, which will be introduced there in September 2015. In doing so, Mercedes-Benz Vans will establish a new segment in the U.S. The division also plans to continue to benefit from the high growth potential in North America with the Sprinter.

The division’s worldwide growth strategy is called “Mercedes-Benz Vans goes global.” It aims to open up new sales potential in the growth markets outside Europe, to expand existing activities, and to extend the division’s technological lead.

“Mercedes-Benz Vans is the most global manufacturer in the van segment,” says Mornhinweg. “We have production and sales operations in the key regions of the U.S., Latin America, China, and Russia. The Sprinter is already our number one global vehicle. This year we will make the new Vito mid-size van our global vehicle number two, and also launch it on the market in North and Latin America. All in all, we offer customers the youngest and most attractive product range on the market — from the Citan city van to the Sprinter large van. We therefore have everything we need to achieve profitable growth.”

A prime example of the division’s global success is the Mercedes-Benz Sprinter, which is celebrating its 20th anniversary this year. The Sprinter is sold to customers in 130 countries. That makes it the number one global vehicle for Mercedes-Benz Vans. To date, more than 2.8 million Sprinters have been delivered to customers worldwide. Last year Mercedes-Benz sold almost four times as many vehicles in this segment worldwide than any other German manufacturer.

In late 2014 Mercedes-Benz Vans defined the long-term strategy for the production of the successor model of the Sprinter. As a result, Mercedes-Benz will manufacture the units that are earmarked for the North American market directly in the United States. At the beginning of March 2015, Mercedes-Benz Vans announced that the new plant would be built in Charleston, South Carolina. The U.S. plant will enable Mercedes-Benz Vans to serve the North American market much more profitably in the future. Moreover, vehicles ‘Made in USA’ can much more rapidly meet the growing demand from North American customers. Over the next few years, the division will invest around half a billion dollars in the creation of the new van plant. On an area measuring more than 800,000 m², the company will build a completely new body shop, a paint shop, and an assembly area. Construction of the new factory is scheduled to begin in 2016. The Sprinter plant in the U.S. will mainly be built in response to the rapid growth that the large van segment is expected to experience in North America in the years ahead. Another reason is that high U.S. import duties currently require the Sprinters that are produced in Germany for the U.S. market to be laboriously dismantled before they are shipped to the United States, where they are then reassembled.

Mercedes-Benz Vans will be the only manufacturer in the large van segment to continue to produce the next-generation Sprinter in Germany as well. It will do so in Düsseldorf and Ludwigsfelde, where it will invest a total of €450 million in the two plants’ modernization. The investments will strengthen the German plants’ long-term competitiveness and prepare them for the global competition in this segment. Mercedes-Benz Vans is spending €300 million on the modernization of the body shop, paint shop, and assembly area of the Düsseldorf plant alone, which has been producing the closed-top versions of the Sprinter since 1995. Because Düsseldorf will also serve as the center of competence for global Sprinter manufacturing, it will play an even more important role in Mercedes-Benz Vans’ global production network in the future. The remaining €150 million in investments will be used to ensure the long-term competitiveness of the Ludwigsfelde plant, which has been producing the open-top models of the Sprinter since 2006.