Daimler: Commercial vehicles are a growth business

Daimler: Commercial vehicles are a growth business

LOUISVILLE, KY. Daimler Trucks reinforced the company’s commitment to “global growth with local leadership” in its presentation at the Mid-America Trucking Show on Thursday, stressing the advantages that scale brings to markets around the world

LOUISVILLE, KY. Daimler Trucks reinforced the company’s commitment to “global growth with local leadership” in its presentation at the Mid-America Trucking Show on Thursday, stressing the advantages that scale brings to markets around the world.

“We’re sticking to our strategy,” Andreas Renschler, member of the Board of Management of Daimler AG and head of Daimler Trucks Division said. “We intend to push global growth with local leadership. In essence, it is about fully leveraging our scale to provide customers compelling reasons to invest in our products.”

The numbers Renschler and Martin Daum, president & CEO, Daimler Trucks North America, presented suggested the strategy has been a successful one for the company in North America and abroad. According to Daum, in the NAFTA Class 6-8 market, DTNA closed 2010 with a 31.6% market share, up 2.5% over 2009. In the U.S. Class 8 market, DTNA picked up 2.7% for a 33.9% share of market, and net order intake figures for March are expected to exceed initial projections.

“In 2010, Daimler Trucks North America gained significant market share despite the fact that we discontinued the Sterling brand,” Renschler said. “All in all, DTNA is the number-one choice of medium-and heavy-duty truck customers here in North America.”

From 2009 to 2010, Daimler also gained share in other markets around the world. Renschler noted that Daimler added 0.5% to its share of the EU 29 heavy-duty market and 3.5% to its share of the EU 29 medium-duty sales. “Daimler Trucks is and remains the biggest global truck manufacturer worldwide,” he said. “In 2011, we continue to gain momentum with a 28% increase in sales over the first two months of the year. We call that a good start.”

It is not just sales numbers that are growing, either, Renschler said. Daimler is expanding its presence in many countries and “aggressively” ramping up production here in the U.S.

In addition to the newest plant in Saltillo, Mexico, the company is currently converting a passenger car plant in Juis de Fora, Brazil, to a truck plant to increase capacity there.

“In Russia, we’ve just opened a plant for local production of Fuso and Mercedes Trucks with our Russian partner, Kamaz,” Renschler added. “In India, we’ll start local production of our BharatBenz-trucks next year. This is a new brand tailor-made for the Indian market. And in China, we’re preparing for joint truck production with our local partner, Foton. Altogether, we’re aiming for 160,000 units per year.”

Increasing production in the U.S. has also resulted in a growth in jobs, according to Daum. “We employ 2,000 more blue collar workers now than we did last year,” he said. “We are the first to ramp up and the most aggressive. I would like to go even faster [but shortages of components are a limiting factor.]”

Daum and Renschler also offered specific examples of how “size matters” in the world market, noting its contributions to improvements in Daimler product quality, technology and service across various markets.

Doing business on a global scale does not mean a “world truck” is waiting in the wings, however, according to Renschler. “World trucks are still as common as unicorns,” he said. That is because of three reasons: …There are different truck architectures in different markets, emerging countries need a different approach and different emissions regulations call for specific solutions.”

“Our philosophy is ‘as local as necessary, as global as possible,’” Renschler said. “And we’re confident we’ve struck the right balance. But smart commonality is in the interest of our customers because every dollar of savings through economies of scale can be invested back into R&D. And, after all, technological leadership requires financial muscle… In the next 24 months alone, Daimler as a whole will invest more than $14 billion in research and development. That is $20 million per day.”

Looking ahead, Renschler and Daum consider the overall picture for the future “promising,” in spite of the “risks out there,” including:

  • High deficits in several countries
  • Climbing raw material prices
  • Unrest in North Africa and the Middle East
  • And questions about the long-term consequences of the catastrophe in Japan

Expressed in forecast numbers, that still translates into expectations for “…significant growth this year, especially for medium- and heavy-duty trucks,” Renschler noted. For NAFTA, that means demand is expected to climb 30 to 35% this year in the Class 6-8 market. “By 2013, we expect to outpace the market and sell more than one-half million trucks worldwide in that year,” he added.

In the shorter term, the company expects the U.S. Class 8 market to reach 153,000 by 2011, according to Daum, a gain of some 42%.

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