Back in the Black: Daimler Trucks Expects Earnings of Around One Billion Euros in 2010

• Sales up 33% through August 2010 (ytd) compared to same period last year

• Incoming orders up 65% in August (ytd)

• Demand in triad increases

• Strong growth in Latin America, Indonesia, and Eastern Europe

• Systematic globalization strategy for emerging markets

The world's largest commercial vehicle manufacturer, Daimler, is participating in IAA Commercial Vehicles 2010 with three great brands, numerous innovations, and more than 60 trucks, vans, and buses. Following the steep decline of the global market in 2009, this year's IAA marks a positive turning point for Daimler, as sales at Daimler Trucks were around one-third higher through August 2010 than in the same period last year. The biggest growth was posted in Latin America (+68%), Indonesia (+76%), and Eastern Europe (+129%), although sales in the latter region rose from a very low level.

Says Andreas Renschler, Daimler Board of Management Member responsible for Daimler Trucks and Daimler Buses: "These figures make us optimistic. Our incoming orders for August (ytd) are up by 65% — this shows that the figures are not a temporary phenomenon." Renschler expects Daimler Trucks to once again post around one billion euros in earnings before taxes in 2010.

Daimler also expects global truck markets to strengthen further by the end of the year. Here, it forecasts growth of five to 10% in Europe, 10 to 15% in the NAFTA region and approximately 20 to 30% in Japan.

In 2009, the commercial vehicle industry suffered a global sales decline of 50% on average, with growth being recorded only in China and a few other emerging markets. During this period, Daimler's commercial vehicle division benefited from its long-term Global Excellence Program, which not only proactively addresses market cycles, but also exploits market potential worldwide, systematically gears future product generations toward meeting customer needs, and creates synergy effects and economies of scale.

High growth rates in BRIC and Next 11 countries

The general upswing in commercial vehicle sales is mainly the result of growth in the BRIC countries (Brazil, Russia, India, and China) and in the so-called Next 11 countries, which are Egypt, Bangladesh, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey, and Vietnam.

Between August 2009 and August 2010, Daimler Trucks managed to boost its sales by 64% in the BRIC countries and by an even more spectacular 75% in the Next 11 countries. In total, sales in these countries rose by 71% and they accounted for almost 40% of total sales at Daimler Trucks (full-year 2009: 30%).

Economies of scale achieved through joint ventures with regional partners

Daimler Trucks has established various joint ventures in the BRIC countries to enable it to penetrate new markets. A 50:50 joint venture with China's fastest growing truck manufacturer, Beiqui Foton (sales in 2009: 82,234 heavy-duty trucks), is currently being established in China, which now accounts for nearly half of all sales of medium-duty and heavy-duty trucks worldwide. The Chinese authorities are expected to approve the production of a joint truck sometime within the next few months. Once it is obtained, the Foton brand Auman will be able to commence manufacturing operations, using engine technology from Daimler.

In 2009, Daimler had already established Daimler India Commercial Vehicles to manufacture trucks for the Indian volume market. A truck production plant is currently being built in Chennai, and prototype trucks are undergoing trials on a company-owned test track. The first truck of a new brand will be introduced to the Indian market in two years.

Two further joint ventures are being operated in Russia with the truck manufacturer and local market leader Kamaz. The objective of the "Fuso Kamaz Trucks Rus" joint venture is the production and sale of the Fuso Canter light truck, which has been on sale in Russia since April 2010. The second joint venture, "Mercedes-Benz Trucks Vostok", will begin assembling Actros truck models at the Kamaz plant in Chelny in the second half of 2010.

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