Daimler: Increased sales due to model lineup renewal and market growth in China

Driver assistance and CO2 reduction technologies depict modern image

2015/01/06

Summary

 To become the top in sales volume in the premium segment in 2020, Daimler's passenger car division, Mercedes-Benz, has been: 1) renewing its model lineup, focusing on small cars, 2) growing its market in China and other emerging countries, and 3) developing environmental technologies. With these efforts, sales volume of the passenger car division increased by 8.5% to 1.24 million units for the January to September 2014 period, which was its record high. Mercedes-Benz aims for a record high in 2014, resulting in record highs for two consecutive years.

Model lineup renewal

 In 2014, Mercedes-Benz fully remodeled the C-Class and introduced a new car, the GLA-Class. Mercedes-Benz also facelifted the E-Class and CLS-Class in the same year. Since the flagship S-Class that was fully remodeled in 2013, the company began using a new design and renewed the technologies for all of its core models. The front-wheel drive (FWD) compact car's new MFA platform series started from the B-Class and includes the A-Class, CLA-Class, and GLA-Class. Sales volume of these four models has been strong and has significantly increased. To simplify the lineup, which became complex due to the growing number of models, Mercedes-Benz will apply a nomenclature that will help simplify the model names from 2015.

China strategy: to expand production capacity to 200,000 units

 By 2015, Daimler, which is significantly behind its competitors-Audi and BMW, with its joint-venture partner, Beijing Automotive Industry Holding Co., Ltd.'s (BAIC), will continue to invest EUR 4 billion in China. Specifically, the automaker plans to add another local production model, expand local production capacity from 100,000 units to 200,000 units, and have two-thirds of its sales volume in China produced locally. In addition, focusing on local cities, the automaker aims to expand its sales network and start executing its strategy to catch up with Audi and BMW, which are ahead in sales volume.

Advanced-technology development for driver-assistance systems and CO2 reduction technology

 It is clear that Daimler is ahead of other automakers in the development of high-level driver-assistance systems as a safety pillar for future autonomous driving. Daimler has deployed its advanced technology to a wide range of models. Furthermore, Daimler has introduced plug-in hybrid vehicles (S-Class), fuel cell vehicles (B-Class), and electric vehicles (Smart, B-Class), and has been working to reduce CO2 emissions in a wide range of technical fields, including improving fuel efficiency of internal combustion engines, and steadily achieving its goals.

Mid-term goal

Sales target * By 2020, become the top in sales volume in the premier segment.
* Sales volume target by 2015: Mercedes-Benz brand-1.6 million units, truck division-500,000 units, van division-400,000 units, and bus division-42,000 units
Profit margin * With the exception of the finance division, aim for profit margin (= Earnings Before Interest and Taxes [EBIT]/sales) of 9% in the automotive division (profit margin for the January to September 2014 period was 7.2%) and 10% in the passenger car division (profit margin for the January to September 2014 period was 7.8%).

Four strategic areas

Strengthening of core business * Renew model lineups, strengthen brand, and improve efficiency. By 2020, add another 11 Mercedes-Benz brand models to the current 26 models.
* Develop advanced active/passive safety technologies for passenger cars and commercial vehicles.
Growth in emerging markets * Aim for growth in emerging markets with a focus on China, India, Russia, and Brazil in which future growth can be expected.
Environmental technology leader * Strengthen environmental (CO2 emission reduction) technology development of internal combustion engines, hybrids, electric vehicles (EV), fuel cell vehicles (FCV), etc.
New mobility and service * Due to urbanization and IT technology developments, customer needs are changing. Meet demands for convenient transportation and Internet connection at any place.

 

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