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Daimler Buses striving for higher unit sales and return to profit zone in 2013

  • Many product launches
  • Measures on track to boost growth and efficiency
  • Profitability target of 6% confirmed
  • Market weakness in Brazil and Europe and one-time costs impact on annual result in 2012

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Daimler Buses expects to increase its unit sales and return to profitability in 2013. This optimism is founded on several pillars. First, the Group’s Bus Division is launching a cornucopia of new products while also implementing its growth and efficiency program “GLOBE2013” on a consistent basis. Although the market environment is likely to remain highly challenging, particularly in Europe, other key markets, such as Brazil, should see a return to growth.

“We will increase our unit sales and revenues in 2013 and will return to profitability – even if the situation in Europe is likely to remain challenging,” said Hartmut Schick, Head of Daimler Buses. At the same time, he confirmed the unit sales target of over 40,000 units for 2015 and a return-on-sales target of 6% across the cycle.

Market leadership defended in core markets
Daimler Buses saw a sales decline in 2012, especially because of the difficult situation in key sales markets like Brazil and Western Europe. Global sales totaled 32,100 (2011: 39,700) buses and chassis, and the Division managed to defend its market leadership in its core markets in the segment of buses with a permissible gross vehicle weight over 8 tons. The year-to-year reduction in the unit volume was due mainly to the falling demand for chassis in Latin America.

Unit sales of Mercedes-Benz chassis units fell by 29% to 17,800 units in Latin America (excluding Mexico). Brazil introduced the more stringent Euro V emission standard at the start of 2012. This led to accelerated purchases in 2011, followed by a hefty downturn of the market in 2012. Nevertheless, Daimler Buses was able to extend its leadership of the bus market in Brazil to 44% (2011: 43%). Sales in the stable Mexican market totaled 3,500 units, as in the previous year. With a market share of around 48% (2011: 50%), Daimler Buses succeeded in defending its Number 1 position.

In Western Europe, the government debt crisis led to a downturn in demand and the market shrank to its lowest unit volume in 20 years. Nevertheless, Daimler Buses still managed to sell 5,900 units, the same figure as in 2011. This enabled Daimler Buses to further extend its market leadership in Western Europe with a market share of around 28% (2011: 27%). Bus sales in Germany fell slightly to around 2,040 (2011: 2,210) units. Turkey saw new deliveries to customers of 1,100 units (2011: 1,100), which brought market share up to 51.5% (2011: 49.4%).

Hartmut Schick: “Not a lost year”  
Due to the significant decline in unit sales, particularly in Brazil, and the challenging environment in many European bus markets, Daimler Buses revenues fell by EUR 0.5 billion to EUR 3.9 billion. At minus EUR 232 million, EBIT was down on the previous year’s figure of EUR 162 million. Expenses of EUR 155 million incurred for reorganizing the Division’s business systems in Europe and North America accounted for a large share of the loss. Hartmut Schick commented on the situation as follows: “Many of our core markets were in a depressed state in 2012. This had a big impact, not just on us. Nevertheless, 2012 was not a lost year for Daimler Buses. We worked hard and achieved a lot. Today, we are a leaner, more flexible and better balanced organization than we were a year ago. Nor did we make any cuts in the spending for our future products.”

In the previous year, Daimler Buses launched its GLOBE2013 initiative, which is designed to realize further growth potential in addition to strengthening the Division’s competitiveness, especially in Europe. The program for ensuring sustainable profitability is targeted at a potential improvement in earnings in the EUR 200-million range by the end of 2014. Last year witnessed an intensive and successful effort to implement the program. Among other things, cost savings in the mid-double-digit million range were achieved.

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