New Record Results for DaimlerChrysler Commercial Vehicles
15 January 1999
New Record Results for DaimlerChrysler Commercial Vehicles
* Revenues up by 17 percent in 1998
* Profit operating more than tripled
* Sales rise to approx. 490,000 vehicles -- up by 17 percent on 1997
* Mercedes-Benz Atego: 'Truck of the Year'
* Kurt Lauk: 'Commercial vehicles business is now a solid contributor to
group profits'
BRUSSELS, Belgium and STUTTGART, Germany, Jan. 15 --
DaimlerChrysler AG posted a new sales and revenue record for its commercial
vehicle business, the company's most international division. All in all,
DaimlerChrysler sold 490,000 trucks, vans and buses worldwide in 1998, a rise
of 17 percent on the previous year's volume. At the same time, as the company
revealed in an annual review at the International Commercial Vehicles Show in
Brussels, revenues rose at the division by 17 percent, from roughly $23.5
billion in 1997 to around $27.6 billion (approx. euro 24 billion).
"We've come along much further in sales, revenue and profit than
we originally planned back at the beginning of last year," said Dr. Kurt Lauk,
DaimlerChrysler management board member responsible for Commercial Vehicles.
"That means we've been able to underline the turnaround we first achieved in
1997. Today, the commercial vehicles business -- with its four brands:
Mercedes-Benz, Setra, Freightliner and Sterling -- is a solid profit center
at the contributor to group profits."
Paving the way to this success have been strategically significant
acquisitions such as the takeover of Ford Heavy Trucks, which has now been
transformed into the Sterling brand, and the takeover of Thomas Built, a
manufacturer of superstructures for school buses. A host of new vehicle types
and models, all received with great enthusiasm by the division's traditional
markets, as well as the stable level of demand for commercial vehicles in
general, have together helped nourish this positive development. All of the
commercial vehicle brands recorded sales and revenue rises in 1998, with some
of them posting steep growth.
Thanks to rigorous application of the principles of value-driven
management, DaimlerChrysler Commercial Vehicles was also able to substantially
improve its profit position. In the period from January to September 1998
alone, the division posted an operating profit of $837 million, a result way
above the figure of $287.5 million recorded for 1997 as a whole. All in all,
profits more than tripled last year. As with the group's other businesses,
DaimlerChrysler will announce concrete figures for the Commercial Vehicles
Division when the annual report is published on March 31.
A big sales success last year were once again the Mercedes-Benz Vans,
Europe, almost 200,000 of which were sold worldwide. The leading performer in
this segment was the Sprinter, which sold some 111,700 units. As for the
heavy trucks, the Actros, Atego and Econic were able to boost an already
successful 1997 sales volume of 77,500 units worldwide to 87,300 units last
year. In North America, on the other hand, it was Freightliner that recorded
its best year ever, particularly in the market for Class 6/7 trucks --
vehicles with permissible gross vehicle weight (GVW) of 8.8 to just under 15
metric tons. For the first time in the brand's history, 1998 saw a record
volume of 116,000 units leave the factory, four times as many as 10 years ago.
In the bus segment, the market in Germany has proved to be stable, yielding
sales of 8,250 units in 1998 compared with the 1997 volume of 7,900 units.
Multibrand Strategy Pays Off
"All in all, our strategy for growth has enabled us to boost sales by more
than two-thirds in the space of four years," said Lauk. "It's proof once
again that our multibrand strategy is paying off." A prime example here has
been the positive market response to the decision to retain the Setra name
following takeover of the bus manufacturer Kassbohrer back in 1995. Both
bus brands at DaimlerChrysler have since managed to increase their market
share.
The most recent demonstration of how successful this multibrand strategy
has proved is Sterling, which was first launched onto the North American
market in 1998. The perfect complement to the proven Freightliner range --
especially the popular Class 6 to 8 trucks (almost nine tons to over 15 tons
GVW) -- the new brand has secured for DaimlerChrysler totally new market
sectors in the U.S. and Canada. Sterling trucks are mainly used for delivery,
waste-disposal and fire services.
Global Production Alliance Proves Its Worth
The division's global production alliance has taken on ever increasing
strategic significance. This is what allows the division to offer its
products at prices which are internationally competitive on individual markets
around the world. The production alliance involves not only components within
an individual model-series, but also engines found in a range of different
series. For example, the Sprinter van, over 100,000 units of which were
manufactured in DaimlerChrysler's Dusseldorf plant, is now also manufactured
in Argentina (approx. 20,000 units a year). To a large extent, parts and
components for both plants come from the same suppliers.
Back in November last year, the company also made the decision to round
off its range of vans with a vehicle at the lower end of the market -- in the
rapidly expanding segment of vans under two tons GVW. Intended for use as a
city delivery vehicle, the new van is scheduled for launch on the European
market in 2002. The decision in favor of Germany as a manufacturing location
for the new vehicle, which is in an extremely price-sensitive segment of the
market, first became possible when the EU authorized the Federal State of
Brandenburg to put up corresponding subsidies.
"Without the go-ahead from the EU, we would have found it difficult to
hold on to Ludwigsfelde, one of our van production plants," said Lauk. "It's
a signal in the right direction. We need the kind of political climate in
which there is commitment to supporting freight transport and the
corresponding infrastructure. Economic growth is only possible if the
necessary increase in the volume of traffic is also accepted. At the same
time, it's important to take into account the capacity each form of transport
can offer."
Turning to developments in Asia, Lauk also underlined that the division
sees great opportunities in the region despite the current market situation
there: "We can't capture these markets from the West. That's why we're always
interested in strategic partnerships -- and we have already made major
progress here. A first concrete step was our basic agreement with Nissan
Motor and Nissan Diesel to go ahead with joint development of a lightweight
truck destined for Japan, the ASEAN region, Latin America and developing
countries around the world. Moreover, we're are also holding further talks
with Nissan Diesel on other projects."
Mercedes-Benz Atego Voted "Truck of the Year"
It's been on the market since 1998 and now the Atego van has achieved a
milestone: it's been named "Truck of the Year" by a jury of 18 automotive
journalists. The annual award goes to the manufacturer of a particularly
exceptional commercial vehicle. In the past, all the model-series launched in
line with the Mercedes-Benz product drive (Sprinter, Vito, Actros and now the
Atego) have won this renowned award.
NOTE: The above only considers vehicles that are internationally
considered as commercial vehicles -- i.e. not those, for example, that in the
U.S. alone are described as "trucks."