Mercedes-Benz plans to sell 1.6 million units in 2015

Company will focus on U.S. and emerging markets to become top luxury brand

2013/02/07

Summary

 Mercedes-Benz Cars, Daimler's passenger car division, sold a record-high quantity of 1.42 million units in 2012, up 4.5% from the previous year. Despite the economic recession in Southern Europe and several model changes, Daimler CEO Dieter Zetsche sees the growth was brought by the booming sales of the A-Class and SUV models. However, Mercedes-Benz Cars' expected EBIT for 2012 does not reach last year's 5.2 billion Euros due to losses in the European market and increased competitive tension in the Chinese market (from announcement made in September 2012).


 In its mid-term plan "Mercedes-Benz 2020 growth strategy" announced in February 2012, the automaker declared that it will sell 1.6 million vehicles worldwide by 2015 (excluding the smart-brand) and become number one selling company in the premium segment by 2020.

 In order to attain this goal, the OEM will expand its core Mercedes-Benz brand portfolio, enhance sales in both developed and emerging markets, develop green technologies, strengthen partnerships with other companies like Renault-Nissan Alliance, review its manufacturing network and structure, and achieve cost reductions.

 With decreased sales volumes in Europe, Mercedes-Benz Cars will focus on the U.S and emerging markets where demand for high-end vehicles is expected. Daimler will strengthen its business in China to surpass the worldwide sales of BMW and Audi, a Volkswagen (VW) subsidiary, as the gap was caused by delayed entry into the Chinese market.


Related Reports:
Equipment on new European models (1) (Oct. 2012)
Beijing Motor Show 2012 (4) (Jul. 2012)

Mercedes Benz Cars Global Sales

Retail sales of Mercedes Benz Cars in major markets


Mercedes-Benz Cars' business plan "Mercedes-Benz 2020"

Targets * To sell 1.5 million vehicles worldwide by 2014 and 1.6 million vehicles by 2015 under the Mercedes-Benz brand (note: excludes the smart brand).
* To reach a sales volume of 300K units by 2015 in China.
* To become world's best selling company in the premium segment by 2020.
Business strategies * To enhance sales in markets outside of Europe such as the U.S. and the emerging markets like China and India to cover for the loss in Europe.
* To establish business partnership with other companies, mainly with Renault-Nissan Alliance.
Model plans * To release more than ten new models by 2015.
Development and production structures * To cope with the growing demand for compact cars and SUVs, the OEM will set up a global production network and increase production efficiencies for platforms, powertrains, and parts to save production time and cost.
* To modularize vehicle components, and to consolidate platforms to the "MFA" front-wheel drive platform and the "MRA" rear-wheel-drive platform by 2015 and expand the models to 30 different variations using the platforms.
Environmentally friendly technologies * To reduce average CO2 emissions level in Europe from 150 g/km in 2011 to 125 g/km by 2016. To develop technologies for gasoline and diesel engines with lower fuel consumption and gas emissions as planned in the mid-term plan, researching hybrid vehicle technology, and achieving zero-emissions by developing electric vehicles (EVs) and fuel-cell vehicle (FCV) is also the target.

 

Business partnership with Renault-Nissan Alliance

 As part of its "Mercedes-Benz 2020" plan, Daimler views the collaborations with Renault-Nissan Alliance essential and beneficial. For example, co-production and co-development of engines and new technologies create various benefits, such as saving investment fees for both parties.

Co-production
and procurement
of engines
 The production of engines for the Mercedes-Benz/Infiniti brands will begin at Nissan's Decherd powertrain plant in Tennessee, the U.S. from 2014. Four-cylinder 2500cc engines will be produced and supplied to vehicles under the Mercedes-Benz and Infiniti brands. The maximum annual production capacity of this plant is expected to reach 250K units. The engines will be installed on the next Mercedes-Benz C-Class vehicles manufactured at the Tuscaloosa plant in the U.S. from 2014. The same engine will be supplied to the Infiniti Q50 (a replacement of the Infiniti Q37 sedan, the Skyline in Japan), planned to be remodeled in 2013. Diesel engines for the European market will also be produced here.
Development
of engines
 In September 2012, Daimler and Renault-Nissan Alliance jointly announced the co-development of four-cylinder turbocharged direct-injection gasoline engines. The new engine will have lower emission with higher fuel economy. It will be installed on Daimler, Renault, and Nissan vehicles from 2016. The engine is expected to be installed on the smart fortwo and the smart forfour, as well as Renault's next Twingo.
Co-development
of EVs
 The companies will co-develop EVs to be released in 2014. Renault-Nissan Alliance will be responsible for motor development and Daimler will provide its battery technology and develop drive parts. Daimler will incorporate the technologies into the next smart vehicles.
Co-development
of FCVs
 In January 2013, Renault-Nissan Alliance announced that it will collaborate with Ford to develop a new FCV technology. The production costs will be cutback by using common components. Daimler will be responsible for the fuel-cell battery system which combines stacks and motors. The mass-production model is expected be launched in 2017.
Platforms  Mercedes-Benz's "MFA" platform will be supplied to Nissan's Etherea Concept-based compact car. The cost for development will be saved with the collaboration with Renault-Nissan Alliance.
 In April 2010, it announced the co-development of platforms for the smart's forfour/fortwo and Renault's Twingo. The production of EV and gasoline versions of the smart forfour and the new Twingo will begin at Renault's Novo Mesto plant in Slovenia from 2013.
Transmissions  Daimler will grant a license for manufacturing new automatic transmissions to Nissan. Start/stop system, park and shift by wire technologies will be provided under the license. The new transmissions will be produced at Nissan's subsidiary, Jatco's plant in Mexico and installed on the Nissan and Infiniti brand vehicles from 2016.

 

 



Production structure to increase capacity for compact cars and SUVs

 Mercedes-Benz Cars will incorporate modularization strategies to its new platforms and components. The use of common components will reduce production costs. It plans to consolidate its platforms to two types -the "MFA" front-wheel drive platform and the "MRA" rear-wheel-drive platform - by 2015. The OEM will streamline its production networks for platforms and powertrains and collaborate with other companies to make a vast cost reduction. Additionally, it will optimize its production system to respond to the growing demand for compact cars and SUVs.

 

Activities by production location

Germany:
Stuttgart
 The production line for the S-Class was reduced from two working-shifts to one from November 2012 due to decreased demand. The employees will be transferred to assembly lines for the C-Class.
Germany:
Rastatt
 Five compact models including the new A- and B-Classes, compact SUVs and coupe versions will be manufactured at the plant. It hired an additional 500 employees to meet brisk demand of the new A-Class and switched to three-working shifts from October 2012.
Hungary:
Kecskemet
 The plant opened in March 2012 initially producing the new B-Class models. Its initial annual production capacity is 120K units. The production of the CLA-Class will start from 2013 expanding the annual production capacity to 200K units. It aims to further increase the production capacity to 300K units by 2015.
Finland:
Valmet
Automotive Inc.
 During the four years between 2013 and 2016, more than 100K new A-Class vehicles will be produced at Valmet Automotive Inc. under contract.
U.S.:
Tuscaloosa
 A plant in Alabama. The production of the new M-Class started in July 2011 and the new GL-Class in June 2012. Semi-knockdown (SKD) kits produced at this plant are exported to India, Indonesia, and Thailand. The production of the next C-Class for the North American market will start from 2014.
India:
Chakan
 The production of the M-Class 250CDI using SKDs began in October 2012. The production of the GL-Class is set to begin in 2013.
France:
Hambach
 A two-passenger EV under the smart brand, smart fortwo Electric Drive, started in June 2012.

 

 



Mercedes-Benz Cars' model plans

 In the mid-term plan "Mercedes-Benz 2020" announced on March 29, 2012, Daimler revealed its plan to release three compact cars, two mid-sized cars, one full-sized vehicle, three heavy-duty vehicles, and one SUV from Mercedes-Benz Cars by 2015. Fifteen models built on 12 different types of platforms existed in 1995, but it plans to provide 30 different models built on two platform types by 2015.

Refreshed E-Class CLA-Class
Refreshed E-Class CLA-Class
The image shows a sedan showcased at the Detroit auto show held in January 2013. This avantgarde version places its emblem in the middle of the grille emphasizing its sporty feature. The standard and elegance versions have a classic-style front mask with a saloon grille. A compact coupe built on the "MFA" platform based on the Concept Style Coupe. This model debuted at the eve of the Detroit auto show in January 2013.

 

New
M-Class
Released in
September 2011
 A premium SUV. The gasoline engine version is equipped with the third generation BlueDIRECT direct-injection system and the diesel engine version uses the BlueTEC engine with SCR technology.
New
B-Class
Released in
November 2011
 A premium compact built on a forward-wheel drive layout "MFA" platform also used for the new "A-Class." This is the first B-Class model equipped with a newly developed direct-injection 2-liter straight-four turbocharged gasoline engine and a 7-speed dual clutch transmission, 7G-DCT. Safety features such as COLLISION PREVENTION ASSIST and PRE-SAFE are equipped as standard.
New
SL-Class
Released in
March 2012
 A two-seater convertible sports car. By using aluminum for more than 90% of the body, the model has shed 275lb (approximately 124.7kg) from the previous model.
New
GLK-Class
Released in
May 2012
 A compact SUV launched at the 2012 New York Auto Show. The BlueTEC diesel engine complies with Euro 6 gas emissions standard. It has a better fuel economy with a new electric controlled 7-speed AT, the 7G-TRONIC PLUS, and a start/stop system, Eco start/stop.
New
G-Class
Released in
June 2012
 A large-size SUV. It comes with state-of-the-art equipment such as LED lights, COMAND infotainment system, Blind Spot Assist, DISTRONIC PLUS adaptive cruise control, and ECO start/stop system.
New
A-Class
Released in
September 2012
 A premium compact built on the "MFA" platform. The model is available with a 1.6 to 2.2-liter gasoline or diesel engine. Every engine comes with the ECO start/stop system. A 180 CDI BlueEFFICIENCY Edition has the best fuel economy in the Mercedes-Benz lineup achieving 3.6-liter/100 km (approximately 27.8km/liter) combined average consumption in the European cycle with a 92g/km CO2 emissions level. Safety features such as COLLISION PREVENTION ASSIST and PRE-SAFE are equipped as standard.
CLS
Shooting-Brake
Released in
October 2012
 A four-door coupe based on the CLS-Class launched in 2010. Its rear has been stretched for a bigger interior space. The driving performance of this model was achieved in a high-level by incorporating electric controlled 7-speed AT, the 7G-TRONIC PLUS, and an all-wheel-drive system, the 4MATIC. CLS 250 CDI BlueEFFICIENCY has a fuel efficiency of 5.3-liter/100km (approximately 18.9km/liter) and a CO2 emissions level of 130g/km.
New
GL-Class
Released in
November 2012
 A large-size crossover SUV. The "GL 350 BlueTEC 4MATIC" is powered by a 190kW (258hp) diesel engine achieving 7.4-liter/100km (approximately 13.5km/liter) combined average consumption in the European cycle. The GL 500 4MATIC BlueEFFICIENCY is powered by a V8 gasoline engine. Its fuel consumption is 11.3-liter/100km (approximately 8.8km/liter).
CLA-Class Released in
April 2013
 A compact coupe built on the "MFA" platform, with the design based on the Concept Style Coupe. The body measures 4,630mm in length, 1,777mm in width and 1,437mm in height. This model is available with a 1.6 to 2-liter direct-injection gasoline engine or a 2.2-liter diesel engine with a 109g/km CO2 emissions level. Every engine comes with an ECO start/stop system and conforms to Euro 6 standard. For safety features, the model comes standard with the COLLISION PREVENTION ASSIST technology. It also has a voice control system using an iPhone and the COMAND infotainment system.
Refreshed
E-Class
2013  Mercedes-Benz Cars announced the sedan and station wagon versions in December 2012 and the coupe and cabriolet versions in January 2013. The Improved E-Class has standard, elegance, and avantgarde versions available. This model is equipped with the latest technologies such as the Stereo Multi Purpose Camera (SMPC).
Next
S-Class
2013  Mercedes-Benz's top-of-the-line premium model. Announced in November 2012, this model has greatly improved safety and comfort with most advanced equipment including the Stereo Multi Purpose Camera (SMPC). The Long Wheel Base (LWB) and Ultra-Luxury models will replace the position in the market, which was covered by the Maybach brand. A total of five models will be released over time between 2013 and 2015.
Next
C-Class
2014  The OEM plans to launch sedan and station wagon versions in March 2014 and coupe, cabriolet, and plugin-hybrid models in 2015. These models are equipped with state-of-the-art technologies such as the Stereo Multi Purpose Camera (SMPC).
GLA-Class 2014 An SUV based on the new A-Class platform. Expected to be launched in 2014.
MLC 2015 An SUV coupe based on the M-Class. The production will begin at the Tuscaloosa plant in the U.S. from 2015.

 

 



Business activities in China to enhance sales and production system

 Mercedes-Benz's annual sales volume for 2012 in China was up 1.5% from the previous year to 19,485 units (excluding the smart brand). However, sales volumes and growth rates of VW subsidiary Audi and BMW both greatly exceeded Mercedes-Benz with an increase of 29.6% to 405,838 units and 40% to 326,444 units, respectively.

 Daimler, expecting the Chinese market to increase its importance in the future, assigned a region specific executive director to strengthen its business in China. To attain worldwide number one sales in the high-end segment by 2020, as set in the mid-term plan, the automaker will optimize and enhance its sales structure and increase vehicle's local production rate.

Enhancement
of sales structure
in China
 In December 2012, Mercedes-Benz Cars established a sales company, Beijing Mercedes-Benz Sales Service Co., Ltd, with its local production partner, BAIC Group, on a fifty-fifty basis. There were two different sales networks for locally produced vehicles and imported vehicles in China, and the new company will consolidate and streamline these networks. The local dealer network has been expanded from 207 dealerships in 2011 to 260 dealerships in 2012. Local dealers are increasing at the rate of 50 stores per year to strengthen its sales capabilities. The company aims to sell 300K units annually by 2015, a 50% increase from 2011.
Model deployment  Mercedes-Benz launched the M-Class and the B-Class in 2012. According to the mid-term plan, the S-Class, A-Class, E-Class will be launched. Also, 20 new and improved models will be released in China by 2015.
Enhancing local production  Mercedes-Benz Cars will increase its local production volume in China. The production of four-cylinder gasoline engines is planned to start in 2013. The engines will be installed on Mercedes-Benz brand passenger cars and vans locally produced in China. With the increasing demand for the C-Class, GLK-Class and LWB E-Class vehicles, the production volume will be increased from the current 100K units. Further reduction of production costs by increasing local procurement rate from Chinese suppliers which now provide products with more stable quality is aimed.
 In September 2012, the joint venture of Daimler and BAIC, Beijing-Benz, started the construction of a new plant in Beijing. The plant is set to start production in 2014, initially manufacturing new compact vehicles under the Mercedes-Benz brand.
Local development and research  In June 2011, Daimler built an engine plant and an R&D center at Beijing-Benz. The facility will execute local product development and local partnership to expand products, reflecting the Chinese customers' needs, in the Chinese market.
Establishment
of new brand
 In May 2010, Daimler and a Chinese manufacturer, BYD, established a joint EV corporate body, Shenzhen BYD Daimler New Technology Co., Ltd. In March 2012, it launched a new brand, the DENZA. At the Auto China held in April 2012, the company showcased a concept model built on the "BR169" platform used for previous Mercedes-Benz B-Class models. The production will begin in 2013.

 

 



Business activities in the U.S. exceed sales volume in Germany in 2012

 The Mercedes-Benz sales volume for the U.S. increased 14.3% y/y to 305K units exceeding the 2012 sales performance in Germany.

 The brisk sales of the C-Class and E-Class as well as the continued popularity of SUVs including the M-Class and increased sales of high-end models such as the S-Class, CL-Class, and SL-Class contributed to the growth.

 With the launches of new models like the S-Class and CLA-Class in September 2013, the sales volume in the U.S. expects to mark a record-high in 2013.

Mercedes-Benz's sales volume in the U.S.

Mercedes-Benz
Passenger Vehicles
Dec.2012 Dec.2011 %
change
Jan.-Dec.
2012
Jan.-Dec.
2011
%
change
B-Class 1 0 29 19 52.6%
C-Class 7,757 7,744 0.2% 81,697 69,314 17.9%
E-Class 6,984 5,301 31.7% 65,171 62,736 3.9%
S-Class 1,110 1,073 3.4% 11,794 12,258 (3.8%)
CL-Class 71 57 24.6% 723 943 (23.3%)
SL-Class 503 99 408.1% 4,899 1,449 238.1%
SLS AMG 38 86 (55.8%) 800 722 10.8%
CLK-Class 0 1 (100.0%) 1 6 (83.3%)
SLK-Class 445 266 67.3% 4,595 3,220 42.7%
CLS-Class 703 638 10.2% 8,065 5,665 42.4%
R-Class 9 144 (93.8%) 1,473 2,385 (38.2%)
M-Class 4,241 5,313 (20.2%) 38,101 35,835 6.3%
G-Class 168 55 205.5% 1,330 1,191 11.7%
GL-Class 3,111 2,578 20.7% 26,042 25,139 3.6%
GLK-Class 3,004 2,346 28.0% 29,364 24,310 20.8%
MAYBACH - - 50 39 28.2%
Total 28,145 25,701 9.5% 274,134 245,231 11.8%
Sprinter 2,231 1,595 39.9% 20,929 16,577 26.3%
smart 996 710 40.3% 10,009 5,208 92.2%
MBUSA Grand Total 31,372 28,006 12.0% 305,072 267,016 14.3%

Source: Daimler Investor Relations Release 2011-2012
Note: Includes numbers of Sprinter Vans in Mercedes-Benz USA Grand Total

 

 



Introduction of premium compacts and SUVs to market in India

 Daimler expects India to become the world's third biggest auto market by 2020. This expectation is based on India's population of 1.2 billion, GDP growth rate of over 8% for five years straight, and increasing population of rich middle-class.


 Mercedes-Benz released the M-Class SUV in May 2012 and the B-Class compact sedan in September 2012. The sales volume in India was 7,138 units for 2012, which was almost the same as 7,430 units in 2011.

Production
and sales
 In June 2012, to cope with the planned releases of the B-Class, A-Class, CLA-Class, and GLA-Class models, the OEM will spend Rs. 3.5 billion between 2014 and 2015 to increase the annual production capacity to 25K to 30K units. The company aims to increase the annual capacity to 90K units by 2020 or 2021.
 The M-Class 250CDI components will be imported from the Tuscaloosa plant and assembled at the Chakan plant. In May 2012, the auto maker announced that it will produce eight to nine models in India with CKD within two to three years.
 The M-Class was released to the Indian market in May 2012, the R-Class in August, and the B-Class in September. The A-Class, GL-Class, CLA-Class models will be released from 2013 and the GLA-Class in 2014.

 

 



Worldwide sales volume marks record high for two consecutive years

 The 2012 worldwide sales volume Mercedes-Benz Cars announced on January 4, 2013 was 1.42 million units. This is an increase of 4.5% from the previous year marking a record high for the second year in a row. Sales volume increased in all classes except for the E- and CLS-Classes.

Mercedes-Benz Cars' sales volume by model (retail)

2008 2009 2010 2011 2012
A/B-Class 253,800 219,300 222,373 194,158 226,477
C/CLK/SLK-Class 439,700 344,600 343,470 401,340 413,193
E/CLS-Class 177,000 211,100 323,151 338,386 310,408
S/CL/SL-Class/SLR/Maybach 90,600 65,800 78,244 78,480 80,059
ML/R/GLK/GL/G-Class 160,600 171,500 200,462 248,574 289,960
smart 134,800 117,000 97,528 101,996 103,738
Mercedes-Benz Cars 1,256,600 1,129,300 1,265,228 1,362,934 1,423,835

Source: Daimler Investor Relations Release 2008-2012

 

 



Sales volume by region shows decrease for Western Europe; North America and Asia covers for the loss

 2012 sales volume by region shows an 8.6% decrease from the previous year for Spain, 17.2% for Italy, 20.8% for Portugal (see note). The losses in the Southern European markets were covered by increases in the North American and APAC regions. Other countries in Europe like Germany, however, maintained last year's sales volume. The sales volume increased for the U.K. (10.5% y/y), Switzerland (21.1% y/y), and France (5.8% y/y) from the popularity of new models and engines with less CO2 emissions level.


 The sales volume in the U.S. showed a big leap for two years straight with a growth rate of 12.6% from the previous year for 2011 and 13.5% for 2012 (excludes the Sprinter Van). The sales volume in China also increased for two consecutive years with a 34.5% increase for 2011 and 3.8% for 2012. To achieve its sales goal, Mercedes-Benz Cars will be more focused on business in China.

(Note: the figures for Spain and Italy are based on registered new passenger cars. The figures for Portugal are based on the sales volume of new passenger cars + light commercial vehicles.)

Mercedes-Benz Cars' retail sales volume by region (includes the smart brand)

2008 2009 2010 2011 2012
Western Europe 741,000 645,800 638,512 629,694 624,467
of which: Germany 332,900 298,000 293,445 291,261 288,962
NAFTA 280,000 237,400 258,494 288,475 325,577
of which: USA 249,700 205,200 222,375 250,439 284,143
Asia/Pacific 147,500 168,300 270,520 333,880 355,411
of which: China 42,700 71,900 151,945 204,385 212,091
of which: Japan 37,000 28,600 31,337 33,623 41,889
Other 88,100 77,800 97,702 110,885 118,380
Worldwide 1,256,600 1,129,300 1,265,228 1,362,934 1,423,835

Source: Daimler Investor Relations Release 2008-2012

 

 



Mercedes-Benz Cars' performances and estimate for 2012

 The sales volume for Mercedes-Benz Cars, during January to September 2012 increased by 4.8% from the previous year's respective period, with its revenue also increasing from 42.3 billion Euros to 45.5 billion Euros (a 7.6% increase). However, the EBIT fell 421 million Euros (a 10.6% decrease) to 3,541 million Euros from for the previous year's 3,962 million Euros for the same period. The return on sales went down 1.6 points to 7.8%. Daimler speculates the decrease of the EBIT was caused by costs for technology investment and product development. The 2012 EBIT for Mercedes-Benz Cars is expected to be below last year's 5,192 million Euros.

Mercedes-Benz Cars' consolidated performance (in millions of Euros)

2008 2009 2010 2011 Jan.-Sep.
2011
Jan.-Sep.
2012
Revenue 47,772 41,318 53,426 57,410 42,333 45,539
EBIT 2,117 (500) 4,656 5,192 3,962 3,541
Return on Sales 4.4% (1.2%) 8.7% 9.0% 9.4% 7.8%
Property/Plant/Equipment investment 2,246 1,618 2,457 2,724 - -
R&D Expenditure 2,994 2,969 3,130 3,733 - -
Production (units) 1,338,245 1,031,562 1,312,456 1,392,083 1,025,034 1,086,786
Unit Sales (units) 1,273,013 1,093,905 1,276,827 1,381,416 1,005,516 1,054,105

Source: Daimler Annual Report 2009-2011, Interim Report Q1-3 2012

 


(References: Daimler Annual Report 2011, Interim Report Q1-3 2012, Investor Relations Release 2011-2013, press releases and media reports)

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