Mercedes Hopes to Reclaim Top West European Truck Maker Spot

08/30/96

Reuters has reported that Mercedes-Benz AG hopes that its new line of heavy trucks, dubbed Actros, will help it resume its place at the top of the truck market in West Europe. Mercedes chairman Helmut Werner said he expected Mercedes' share of the crucial west European market for six-ton plus trucks to climb from 25 percent to 30 percent, based on the new introduction. Werner said, "Actros will give the truck business of Mercedes a tremendous push." The new line hits the market in October.

Mercedes, the world's largest truck maker, has seen its market share of heavy trucks diminish as rivals such as Volvo and Scania grab bigger shares. But Mercedes has intermediate-term production plans to increase output to over 400,000 trucks (the company produced 330,000 in 1995). Mercedes intermediate-term sales goal is 50,000 of the Actros models a year; the company's break-even point for the truck is 35,000.

Weak economic growth and fewer goods to haul has driven the global truck market down, especially in Europe. Analysts said that truck makers like Mercedes are so anxious to sell that they have offered discounts of more than a third, which slices into profit margins. Germany's VDA Automobile Association expects German production of six-ton plus trucks to fall about 14 percent to 107,000 units this year.

In response, Mercedes has emphasized efforts to improve profitability, which includes reducing labor costs. Werner has directed the truck unit to slash one billion marks from its production costs, and said that Mercedes was talking with its labor force about how to achieve the cost savings.

Mercedes-Benz reported a group net profit of 2.28 billion marks ($15.5 million) in 1995, up from 1.85 billion marks the year before, including its highly profitable car operations.

Paul Dever -- The Auto Channel