Daimler on the up and up

Things are looking good for Daimler Trucks as its sales and revenue increased considerably in 2012, with good earnings being thrown into the mix as well.

Last year saw both positives and negatives for the truck market as many reported strong sales growth in the first half of the year. However, this took a turn in the third and fourth quarters, as the industry saw demand increase at a slower pace, with some areas even showing a decline.

Kobus van Zyl, vice president of commercial vehicles at Mercedes-Benz South Africa, says that the company is pleased with Daimler Trucks’ global performance and extremely proud of the contribution the South African team made to the global results.

“While the growth in the local market came in slightly lower than anticipated,” Van Zyl says, “we have managed to maintain our leadership position in many segments, and also improve our overall position.” He adds that more than 25 percent of commercial vehicles sold last year in South Africa were from the Mercedes-Benz stable.

Abroad, however, the sovereign debt crisis and the associated economic downturn led to a noticeable decline in sales. These economic constraints hampered demand in the North American Free Trade Agreement region to the mere procurement of essential replacement vehicles.

Reconstruction activities in Japan, following the 2011 earthquake caused an upswing but this development slowed considerably during the course of the year. As for Brazil, weak economic growth and the introduction of tougher emissions standards led to a significant drop in unit sales since the beginning of 2012.

But Daimler Trucks prevailed by increasing its revenues and unit sales; with revenues rising from €28,8 billion (R342,43 billion) in 2011 to €31,4 billion (R373,34 billion) last year and unit sales growing by nine percent for the same period.

“We’ve done relatively well in a difficult situation,” says Andreas Renschler, Daimler Board of Management member responsible for Daimler Trucks and Buses. “We substantially increased sales and revenues despite volatile markets, thus demonstrating once again that we are properly positioned – with our global presence enabling us to offset the effect of weak markets.”

However, prospects are particularly dim in industrialised countries that are suffering from various risks, ranging from the Euro crisis to the federal debt dispute in the United States. This places the weight of global economic growth on the shoulders of emerging markets, which are expected to contribute around 75 percent of the world’s economic growth – estimated to be 2,5 to three percent.

“The year 2013 will be a challenging one on the whole, and business has been rather sluggish in the first few months,” says Renschler. “However, in the second half of the year the markets should gather momentum.” He expects Daimler Trucks to increase its sales, market share and profit once more in 2013.

Locally, things also look promising as Van Zyl is confident that the South African commercial vehicle market will experience growth in all segments this year. “We are optimistic that the market will see a five to six percent increase in market volumes,” he predicts.