Daimler Trucks Targets Gains in 2013 Profit, Market Share

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Bloomberg / March 13, 2013

Daimler’s truck division aims to increase vehicle sales, profit and market share this year on its expansion in emerging markets and demand in Brazil.

“The year 2013 will be challenging on the whole and business has been rather sluggish in the first few months,” said Andreas Renschler, head of the trucks unit. “However, in the second half of the year the markets should gather momentum.”

Demand in Brazil is expected to increase as much as 10% this year, helping offset a decline of as much as 5% in Europe and a weakening of the North American market by 5% to 10%, Daimler said today.

Daimler, the world’s largest maker of commercial vehicles, is lagging behind Volvo and Scania in profitability. The truck unit scrapped plans last year to increase the percentage of earnings before interest and taxes to sales to 8% by 2013 and posted a 2012 margin of 5.5%. To close the gap, the division began a program in June to lower costs by 1.6 billion euros ($2.1 billion) by the end of next year.

“The scope for market share gains is limited,” said Marc- Rene Tonn, a Hamburg-based analyst with Warburg Research. “Mercedes might win a little on new models, but I don’t expect great leaps.”

Ebit last year fell 9 percent to 1.71 billion euros as revenue climbed 9 percent to 31.4 billion euros, making up about 27 percent of Daimler’s sales. After selling 462,000 trucks in 2012, the manufacturer targets more than 500,000 deliveries in 2015 and 700,000 vehicle in 2020.

To adjust production to demand, the company is eliminating 1,300 factory jobs in North America and slashing 800 non- production jobs on a voluntary basis in Germany.

The current order intake in North America is a little better than expected, says Renschler. Higher orders in China, Africa, the Middle East and southeast Asia may help balance the lower demand in Europe, he said.

Renschler will swap responsibilities with board member Wolfgang Bernhard next month to lead the Mercedes-Benz passenger car division’s purchasing and production operations.

Daimler has two joint ventures in Russia with Kamaz, the market leader for heavy trucks. Daimler took a 10 percent stake in Kamaz in 2008 and currently owns 11 percent directly and votes the 4 percent holding of the European Bank for Reconstruction and Development.

“We’re talking to Kamaz and aim to increase our stake gradually,” said Renschler “We will not take the majority in the next step, but from a strategic point of view it will make sense someday.”

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i thought obama was getting this economy rolling ....