Mercedes-Benz Cars: target record 1.35 million units for 2011

Introducing new premium compact cars in U.S., producing them in China by Beijing Benz as well

2011/11/24

Summary

 Mercedes-Benz Cars, Daimler's passenger car division, sold a record-high quantity of 1,108,538 units from January through October 2011 (up 6.9% from the previous year), and predicts a new record-high unit sales of 1.35 million vehicles in the global markets for the full 2011. Daimler sees growth opportunities for Mercedes-Benz Cars in the coming years in North America, BRICs (especially China), and South Korea.

 Daimler has developed premium compact cars (successor models to A-/B-Class) to arm itself for more stringent regulations on fuel economy in Europe and the United States and the resulting market trends toward downsized vehicles and engines. The company will invest a total of 1.4 billion euros to install new model manufacturing facilities in the Rastatt plant in Germany and a new plant being constructed in Hungary. The new models will be introduced in the U.S. market (first front-wheel drive vehicles sold under the Mercedes-Benz brand in the U.S. market). The vehicles will be produced also in China by Beijing Benz. Daimler plans to nearly double the sales quantity of the successor models to A-/B-Class from 220,000 units in 2010 to over 400,000 units in a mid-range prediction.

 Daimler is pressed for a significant reduction of the CO2 emissions and improvement of fuel economy in European and American markets. Under the pressure, Daimler renewed its four-cylinder, V6 and V8 engines in 2009 and 2010 with 24% improvement in fuel economy of the V6/V8 direct-injection engines. The company is also making special efforts to improve fuel economy including the use of the four-cylinder direct-injection turbocharged engine in the C-Class cars, refreshed substantially in 2011, for the U.S. market.

 Daimler is also increasing its production capacities. The company announced it will invest US$2.4 billion in the Tuscaloosa plant in Alabama, U.S., for new model development and facility expansion. In addition to the three CUV models in the current production list, Daimler will add coupes based on the next C-Class and M-Class models in 2014 to 2015.

 In China, Daimler will invest 2 billion euros in Beijing Benz to produce the GLK, a compact SUV, and three successors to the A-/B-Class cars in addition to the C-/E-Class cars currently in production. Daimler also announced plans to build a new engine plant in China and start production of four-cylinder engines in 2013.



Model plans: Renewing C-Class, M-Class, and A-/B-Class cars

 Daimler launched the new four-door coupe CLS in January, and its best-selling car, C-Class, after substantial refreshing, in March 2011. These contributed to the increased sales in 2011.

 In light of the market trend in favor of smaller automobiles, including the premium cars, Daimler will fully remodel its A-/B-Class compact cars and increase the existing A-/B-Class family from the current two to four models. The company will increase vehicle sales from 220,000 units in 2010 to the level of 400,000 units in a mid-range business plan. Daimler will launch the new B-Class car in Europe in November 2011 and the new A-Class car in 2012. These new compact cars will be introduced in North American markets as well.

Developing new-generation engines including V6/V8 direct-injection engines and four-cylinder direct-injection turbocharged engines

 Daimler renewed its gasoline and diesel engines in 2009 (four-cylinder type) and 2010 (V6 and V8 types).

 With regard to the gasoline engines, Daimler has developed four-cylinder direct-injection turbo-engines that will be used on the significantly refreshed C-Class cars and the new-generation compact series.

 Daimler has also developed the V6/V8 engines featuring BlueDIRECT, the third-generation direct-injection system. The new engines have achieved a 24% improvement in fuel economy while increasing the power output, thanks to the Spray-guided direct injection featuring piezoelectric injectors that inject fuel at 200 atm (capable of up to five fuel injections per intake and compression stroke) and Multi-spark ignition (up to four sparks within one millisecond). The new engines also feature a broader driving range in lean combustion mode (direct-injection lean-combustion engines were realized with the CLS in 2006 and with the E-Class by the end of 2007, and Daimler will make the BlueDIRECT lean-combustion engines available on more models to increase their fuel economies).

 Daimler is also making efforts to increase the use of the start-stop system.

 

New Mercedes-Benz B-Class
New Mercedes-Benz B-Class (five-door hatchback saloon) being launched in
Europe in November (exhibited at Frankfurt Motor Show in September 2011)

Mercedes-Benz Concept A-Class
Mercedes-Benz Concept A-Class debuting in 2012 at the earliest
(exhibited at the Frankfurt Motor Show)

 

Daimler's model plans (2011 and on)

CLS January
2011
 The new four-door coupe CLS launched in January 2011. All its engines were renewed to improve fuel economy by up to 25% from the previous model. The V6 3.5 L BlueDIRECT gasoline engine features the third-generation direct-injection system as well as the start-stop system. As a result, the fuel economy of the European model improved to 14.3~14.7 km/L and the CO2 emissions to 159~164 g/km, both indicating approx. 45% improvement from the previous model.
C-Class
(Significantly
refreshed)
March
2011
 Daimler launched the significantly refreshed C-Class sedan and wagon in March and the coupe in June 2011. More than 2000 parts were replaced and new safety features were added including the ATTENTION ASSIST (monitors the driver's fatigue) and the DISTRONIC PLUS (keeps distance from the car in front).
 The gasoline/diesel, four-/six-cylinder engines and the 7-speed AT (7G TRONIC PLUS) available on C-Class cars were improved and the ECO Start-Stop was made available. As a result, fuel economy increased 31% in average from the previous model. The new four-cylinder engines will be used on the next A-/B-Class models as well.
M-Class September
2011
(Launched
in U.S.)
 The third-generation model of the SUV M-Class produced in the United States has 25% higher fuel economy in average than the previous model. The gasoline engine uses the third-generation BlueDIRECT direct-injection system. The diesel engine uses the BlueTEC engine in which SCR technology has been incorporated.
 The safety features that were originally found on upper class cars, such as ATTENTION ASSIST, PRE-SAFE, and Active Lane Keeping Assist, are now made available on the M-Class as well.
Next
B-Class
November
2011
 The new B-Class "four-door hatchback saloon" debuted in the 2011 Frankfurt Motor Show for market launch in Europe in November. With overall length/width/height of 4359/1786/1557 mm, the new model is 84 mm longer and 48 mm shorter in height than the previous model. The sporty appearance has a resemblance of the four-door coupe CLS.
 Powered by the four-cylinder engines from the C-Class. The next B-Class models will initially use the 1.6 L direct-injection turbocharged gasoline engine and the 1.8 L turbocharged diesel engine. The newly-developed 6-speed MT will be standard and the 7-speed DCT optional. The diesel-fueled model has achieved fuel economy of 4.4 L/100 km (22.7 km/L).
 The Premium compact car is well equipped with safety features including the standard Collision warning system with adaptive Brake Assist. The PRE-SAFE (system that takes up the seatbelt when the risk of collision is detected, and shuts the window and adjusts the seat to an ideal position for maximum effectiveness of the restraint systems) that used to be available only on upper-class cars is made available for the first time on the compact class cars.
Concept
A-Class
Early
2012
 The three-door coupe, exhibited at the New York and Shanghai motor shows in April 2011, has a sporty style featuring a long bonnet and low silhouette. Daimler calls it a concentrated dynamism. The A-Class is slightly smaller than the B-Class in size.
 Powered by the newly-developed four-cylinder 2.0 L direct-injection turbocharged engine with max. output of 155 kW (210 hp). Piezoelectric injectors are also used on the direct-injection system of the four-cylinder engine. The car has a 7-speed DCT and is well equipped with safety features as is the B-Class car.
S-Class
(Note)
2012  The next generation of the S-Class is likely to be characterized by derivative vehicle types including the long wheelbase, wagon, and four-door convertible. The S500 Plug-in Hybrid will be made available with fuel economy of 3.2 L/100 km and 74 g/km CO2 emissions.
GL-Class 2012  Full remodeling is slated for 2012 (U.S. production cars).
Next
C-Class
2014-2015  The next C-Class cars for North America will be produced at the Tuscaloosa plant starting in 2014. More derivatives, including the convertibles, will be produced.
 Vehicles with hybrid systems or those powered by clean diesel engines will be introduced as well.
MLC 2015-  The M-Class-based coupe (called MLC) will be produced in the United States starting in 2015 and will rival BMW's X6.
Source: Daimler Q1/Q2/Q3 Interim Report 2011, Automotive News 2011.10.17
(Notes) 1. Daimler exhibited the Concept F125!, a F-Cell (FCV) Plug-in Hybrid, at the 2011 Frankfurt Motor Show. The vehicle has 1,000 km range.
2. According to Daimler, the Concept F125! suggests a direction of sustainability of a large-sized car, such as S-Class, in, say, 2025, two generations into the future while meeting the fuel economy regulation (which will require electrification) and satisfying the customer need for an extensive range, say, 1000 km, in European and American markets that face more stringent regulations on fuel economy. The FCV normally takes longer to start and the use of Plug-in Hybrid contributes to faster starting.

 

Impending need to meet CO2 emissions standard in EU and fuel economy standard in US

 Daimler is pressed with the need to substantially reduce CO2 emissions and increase fuel economy in European and US markets. Accordingly, Daimler plans to reduce its average CO2 emissions from 158 g/km in 2010 to 125 g/km in 2016 in Europe. Daimler is far from meeting the MY2011 standard in the U.S. (provisional value as of April 2011) and will need to meet still more stringent standards in MY2012-2016.

CO2 emissions of Mercedes-Benz Vehicles sold in Europe

1995 2001 2006 2008 2009 2010 2012 2016
CO2 (g/km) 230 193 183 173 160 158 140 125
Fuel economy (L/100km) 9.21 7.71 7.31 6.91 6.41 6.31 5.61 5.01

Source: Daimler Frankfurt Auto Show Investor Conference (September 2011)
(Note) The CO2 regulation in EU targets to reduce the average CO2 emission from all new vehicles sold in EU to 130 g/km in 2015. Targets of individual auto manufacturers are determined taking into account the average vehicle weight of their cars sold.

Fuel economy standards required of Mercedes-Benz Vehicles sold in U.S.

MY 2011 MY 2012 MY 2013 MY 2014 MY 2015 MY 2016
Standards CAFE Standards under MY 2012-2016 Regulations
Passenger cars (mpg) 29.8 26.9 32.0 32.7 33.3 34.4 35.8
Light trucks (mpg) 25.2 21.1 25.6 26.3 26.9 27.8 29.1

Source U.S. Environmental Protection Agency/National Highway Traffic Safety Administration (2010.5.7). Targets for MY2011 and predicted results are taken from NHTSA Summary of Fuel Economy Performance (2011.4.28).
(Note) Daimler, along with BMW/Jaguar/Land Rover/Porsche/VW, has paid fines for failing to meet the U.S. fuel economy regulations (CAFE: Corporate Average Fuel Economy).

 



Producing new compact cars in a new plant in Hungary and Rastatt plant in Germany

 The new compact car series will be produced at two plants in coordination, by Rastatt plant in Germany where the A-/B-Class cars are being produced now, and the new plant being constructed in Kecskemet, Hungary. Daimler announced it will invest 1.4 billion euros in total in the two plants. Production at Rastatt plant will start in the fall of 2011 and the Hungarian plant will start production in the first quarter of 2012.

 The main European markets for the new compact cars are Germany, Italy, France and the U.K., and the cars will be introduced in the U.S. as well. Daimler announced the series will also be produced by Beijing Benz.

 



U.S. production: Investing US$2.4 billion in 2010-2014 to increase capacity of the Tuscaloosa plant

 Daimler started its U.S. production in 1997 at the Tuscaloosa plant in Alabama. Since then, Daimler is producing three types of mid-size CUV. In 2011, Daimler remodeled the M-Class cars and launched them in the United States in September.

 In 2014, the C-Class will be added to Daimler's production list for North American markets. The company will further add the M-Class-based coupe, which will become Daimler's fifth production model in the United States. The company announced it will invest US$2.4 billion for new model development and facility enhancement in 2010-2014.

Investing US$2.4 billion to produce new models at Tuscaloosa plant

Existing
production
models
M-Class  The new model (3rd generation) launched in the U.S. in September 2011. The ML 350 (with V6 3.5L direct-injection engine) and the ML 350 BlueTEC (with V6 3.0L BlueTEC turbocharged diesel engine) are available in the U.S.
GL-Class  To be fully-remodeled in 2012.
R-Class  This is a long- and low-bodied CUV. The next model development has not been decided due to sluggish sale.
Additional
models
C-Class  Production of the next C-Class model will start in 2014 for supply in North America.
MLC  Production of the M-Class-based coupe (called MLC) will start after 2015.

Source: Daimler press releases 2011.7.21/2011.10.21, Automotive News 2011.7.25/2011.10.10

 

U.S. markets: Four-cylinder engines made available in C-Class, new premium compact cars being introduced

 Daimler has made available the four-cylinder engine, for the first time since 2005, with the fully-enhanced C-Class model being launched in the United States in the fall of 2011. The coupe style model was also made available to meet the market demand. These decisions are meant to compete with the BMW 3 Series that has long outsold the C-Class in the U.S.

 Daimler is launching four types of A-/B-Class-based front-wheel drive compact cars in the United States in 2013. With the prediction that compact cars will prevail in the United States, even among the premium segment, all premium car manufacturers have plans to introduce small-sized high-end vehicles.

Daimler and BMW launching premium compact cars in the U.S.

 It is said American customers conventionally were not willing to pay the right price for small high-end cars. Small high-end cars currently marketed in the United States include Audi A3 (5-door hatchback), BMW 1 Series (coupe and convertible) and Volvo C30 (3-door hatchback). But their sales in 2010 only totaled 23,596 units and they proved to belong to a niche market.
 But the market is changing now due among others to the economic recessions and the introduction of stringent regulations on fuel economy by the U.S. government. The premium car manufacturers are now planning to launch new models expecting growth of the compact high-end car market in the United States. Daimler will introduce the new A-/B-Class cars in 2013 while BMW plans to develop front-wheel drive compact cars for launch in the U.S. market in 2014 (the newly-developed cars will share the platform with the Mini which is a front-wheel drive model). In addition, BMW is launching EV sub-brand "i" series in 2013.
 The compact high-end cars to be launched by Daimler and BMW will have high performances and equipment worthy of the premium category with the starting price of approx. US$30,000. It is said they will cost about US$10,000 more than the volume production cars such as the Chevrolet Cruze (US$16,720) and Ford Focus (US$16,500). (Note)

Source: Automotive News 2011.1.31/2011.5.16/2011.10.10
(Note) The starting price is US$27,270 for Audi A3 (2.0L direct-injection turbocharged engine), US$31,050 for BMW 1 Series Coupe (inline 6-cylinder 3.0L engine), US$29,810 for Acura TSX (4-cylinder 2.4L engine), US$33,595 for Lexus IS 250 (V6 2.5L engine), and US$34,800 for Mercedes-Benz C250 (base car of thr C-Class with 1.8L direct-injection turbocharged engine). (Actual purchase prices will be higher with the addition of optional equipments.)

 



China: M-Benz Cars sales growing rapidly, investing 2 billion euros in Beijing Benz to produce new models

 Sales of Mercedes-Benz passenger cars in China, including imports, increased sharply from 67,000 units in 2009 to 160,000 units in the full 2010 and to 160,000 units in the first nine months (January-September) of 2011. The quantity sold in 2010 includes 39,000 units of local production, and the remaining 120,000 units are imports including Mercedes-Benz cars other than the C-/E-Class cars and Smart cars. Daimler began importing GLK (CUV), B-Class and Smart in 2009 and launched A-Class in 2010 and the new CLS in October 2011.

 Beijing Benz Automotive is enjoying brisk sales of the C-Class cars (production in China began in 2008, significantly refreshed in mid-2011) and the E-Class long-wheelbase cars designed exclusively for the local market (production began in May 2010). Its production quantity increased from 15,000 units in 2009 to approx. 40,000 units in 2010.

 In June 2011, Daimler announced plans to invest 2.0 billion euros in Beijing Benz to start production of the GLK and three new-generation compact premium models. The company also plans to start building an engine plant and start production in 2013.

Production and Sales of Mercedes-Benz Cars in China

2006 2007 2008 2009 2010 Jan.-Sep.
2010
Jan.-Sep.
2011
Production C-Class
E-Class (Note 1)

5,598
0
7,018
7,502
7,883
13,594
1,040
28,308
11,432
19,813
4,255
21,811
36,515
Beijing Benz Total 5,598 7,018 15,385 14,634 39,740 24,068 58,326
Total sales including imports - - 49,000 67,451 159,974 116,114 160,629
Source: Daimler Annual Report 2011, Interim Report Q3 2011
(Notes) 1. In May 2010, Daimler began production of the E-Class long-wheelbased cars designed exclusively for the Chinese market. The 3014 mm long wheelbase, 140 mm longer than the standard model, provides extra-large space for rear seat passengers.
2. Other than Beijing Benz, Fujian Daimler Automotive Co., Ltd. (founded jointly by Daimler, Fujian Motors Group, and China Motor in 2007) began production in the second quarter of 2010 of the commercial vans, Viano/Vito. The company produced 11,000 units in 2010. The vans are classified under MPV (passenger cars) in China but are not accounted for in the "Total sales including imports" above.
3. Imported SUVs are enjoying brisk sales with 39,760 units sold in January-September 2011 (including 17,970 units of GLK and 10,550 units of M-Class)

 

Additional investment of 2.0 billion euros in BBAC to increase production models and construct a new engine plant in China

 Agreement was concluded in early 2011 between Daimler and Beijing Automotive Industry Corporation to further strengthen their strategic partnership. In June, the two companies agreed to an additional investment of 2.0 billion euros in Beijing Benz Automotive Co., Ltd. (BBAC, their joint venture company) to execute the following plans:
 (1) BBAC, currently producing C-/E-Class cars, to produce a compact SUV, the GLK, starting in 2011 and add three models in the new-generation premium compact series (next models of A-/B-Class) to the production list in the near future.
 (2) To build a new engine plant to produce four-cylinder engines for use on locally manufactured Mercedes-Benz-branded passenger cars and vans starting in 2013. The plant will start with an annual quantity of 100,000 units with the plan to increase annual capacity to 250,000 units.
 Agreement was reached on November 2 to further deepen their partnership and cooperate in the research and development of new energy vehicles. A development center will be organized within BBAC to conduct R&D activities with suppliers, test driving, etc.

Source: Daimler Press release 2011.6.28/2011.11.2

 



Sales quantity: 1.35 million unit sales expected for 2011 thanks to the fast growth of Chinese market and brisk sales of the new C-Class cars

 Mercedes-Benz Car marked record-high sales of 1,005,516 units globally during the January-September period of 2011, up 7.3% year-to-year. Among geographical regions, a record-high 38.3% growth was registered in China with 160,629 units as of September end (strong sales continued through October with 6.9% increase in the January-October period to renew the sales record with 1,108,538 units).

 Among Daimler models, the strong sales owe much to the significantly refreshed models of C-Class that were introduced in March (sales in July to September increased from 87,000 units from a year ago to 106,000 units). The company foresees sales contribution by the new M-Class cars launched in North America in September 2011 and in Europe in November, and the new B-Class being launched in Europe in November.

 Mercedes-Benz Cars is predicting record-high sales of 1.35 million units in the world for the full 2011, and sees growth opportunities in North America, BRICs and South Korea in the coming years.

Mercedes-Benz Cars' unit sales by model (wholesale)

(1,000 units)
2006 2007 2008 2009 2010 Jul.-Sep.
2010
Jul.-Sep.
2011
A-/B-Class
C/CLK/SLK-Class
E/CLS-Class
292
329
243
275
387
231
250
448
173
215
323
212
222
342
331
54
87
82
55
106
78
S/CL/SL-Class
SLR/SLS/Maybach
108 107 93 57 80 20 18
M/R/GL/GLK/G-Class 177 180 161 167 203 51 58
smart 103 103 139 114 94 22 22
Mercedes-Benz Cars 1,252 1,293 1,273 1,094 1,277 316 337

Source: Daimler Annual Report 2011, Interim Report Q3 2011
(Note) Including Mitsubishi vehicles manufactured and/or sold in South Africa (4,192 units in 2010).

 

Mercedes-Benz Cars' unit sales by region (wholesale)

2006 2007 2008 2009 2010 Jan.-Sep.
2010
Jan.-Sep.
2011
Western Europe
of which Germany
784,849
353,275
779,157
342,860
733,233
332,472
623,489
297,756
635,798
292,895
466,441
209,232
465,832
212,071
North America
of which U.S.
271,792
248,560
276,062
251,789
282,161
251,160
235,549
202,955
256,365
220,454
189,314
163,259
195,271
167,925
Asia
of which China
195,156 237,965 257,619 138,942
67,451
261,568
159,974
193,432
116,114
244,516
160,629
Rest of World 95,925 123,096 87,887 99,897
Worldwide 1,251,797 1,293,184 1,273,013 1,093,905 1,276,827 937,074 1,005,516

Source: Daimler Annual Report 2011, Interim Report Q3 2011
(Note) Including Mitsubishi vehicles manufactured and/or sold in South Africa.

 



Mercedes-Benz Cars results and outlook

 Mercedes-Benz Cars division's revenue in January-September period increased steadily as a result of increase in sales quantity to 42.3 billion euros. The EBIT (earnings before interest and taxes) for the first two quarters rose from 1,376 million euros to 1,566 million euros year-to-year but fell to 1,108 million euros on the third quarter, less than 1,299 million euros a year ago, due to the change in product mix, exchange-rate effects, model changeovers and material costs. The EBIT for the fourth quarter (October to December 2011) is expected to remain about the same as the previous year.

 Daimler is spending extra to launch new models in 2011 and 2012 and its profitability growth will become slow compared to the year 2010 that marked a significant recovery from 2009. Nevertheless, the numerous model changes for Mercedes-Benz Cars will only have a positive impact after a certain delay, and Daimler aims to achieve a return (EBTI) on sales of 10% for Mercedes-Benz Cars in 2013 (9% for the automotive business).

Mercedes-Benz Cars' Consolidated Results

(in millions of euros)
2006 2007 2008 2009 2010 Jan.-Sep.
2010
Jan.-Sep.
2011
Revenue
EBIT
Return on sales
51,410
1,783
3.5%
52,430
4,753
9.1%
47,772
2,117
4.4%
41,318
(500)
-1.2%
53,426
4,656
8.7%
39,274
3,481
8.9%
42,333
3,962
9.4%
Capital expenditure
R&D costs
1,698
2,274
1,910
2,733
2,246
2,994
1,618
2,696
2,457
3,130
-
-
-
-
Production
Sales
1,230,951
1,251,797
1,300,089
1,293,184
1,338,245
1,273,013
1,031,562
1,093,905
1,312,456
1,276,827
950,966
937,074
1,025,034
1,005,516

Source: Daimler Annual Report 2011, Interim Report Q3 2011

 



Daimler Group's results and outlook for the full 2011

 Daimler Group's business is recovering from the bottom year of 2009 and its revenue in 2011 is likely to top 100 billion euros. With the strong profitability support of the commercial vehicle division, the company predicts that the Group's EBIT from on-going business (other than special items) will significantly exceed the level of 2010 (7,274 million euros).

Daimler's Consolidated Results

(in millions of euros)
2006 2007 2008 2009 2010 Jan.-Sep.
2010
Jan.-Sep.
2011
Unit sales 2,072,885 2,088,973 2,072,876 1,551,291 1,895,432 1,374,316 1,514,903
Revenue 99,222 101,569 98,469 78,924 97,761 71,365 77,474
EBIT 4,992 8,710 2,730 (1,513) 7,274 5,712 6,580
Net Profit 3,783 3,985 1,414 (2,644) 4,674 3,534 4,244
Depreciation
R&D costs
Capital expenditure
7,169
3,733
5,874
4,146
4,148
4,247
3,023
4,442
3,559
3,264
4,181
2,423
3,364
4,849
3,653
2,495
3,585
2,306
2,698
4,013
2,777
Source: Daimler Annual Report 2011, Interim Report Q3 2011
(Notes) 1. Results on IFRS base. Daimler used to be DaimlerChrysler until August 3, 2007, but the figures above are based on continuing operations.
2. Net Profit includes Daimler Group's Net Profit (including that of minority shareholders).
3. R&D costs are the total of expensed R&D costs and capitalized development costs. Depreciation cost includes amortization on capitalized development costs.

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