Business development

 

Ongoing expansion of world economy

Although the world economy confirmed its general upward trend in the second quarter of 2014, its rate of growth was still relatively low. The most dynamic economic development was probably in the United States, which seems to have expanded significantly after its unexpectedly significant contraction in the first quarter. In Japan, however, demand is now weak following the tax-related purchases brought forward to the first quarter. The leading economic indicators for the European Monetary Union suggest that the revival has continued but is still very moderate and with considerable regional differences. Fortunately, there are many indications that the Chinese economy is continuing its solid growth. But the economic situation has been difficult in other important emerging markets, especially in Russia and Brazil. Increased political risks are a negative factor for the world economy; this is reflected by the high oil price, for example. Despite this rather difficult environment, stock markets rose slightly in the second quarter while the strength of the euro was almost unchanged.

Worldwide demand for cars in the second quarter was stronger than in the prior-year period, supported by ongoing market growth in China and the United States and a moderate market recovery in Western Europe. In China, the stable upward trend continued with double-digit growth rates. The US market became substantially more dynamic following the subdued first quarter and posted growth of 7% compared with the same period of last year. At the same time, sales figures were higher in the second quarter than since 2006. In Western Europe, the moderate upward trend became firmer with an increase in demand of nearly 4%. While the British market continued to expand at a significant rate, the other major markets of Western Europe posted only slight growth. The Japanese market was affected in the second quarter by the recent increase in value-added tax, but the drop in demand of 2% was significantly lower than expected. With the exception of China, demand in the major emerging markets developed unfavorably. The Indian market stabilized and was for the first time in one and a half years slightly above its prior-year level once again. But sales of cars in Russia decreased significantly due to the Ukraine crisis and the related economic weakness.

With just a few exceptions, demand for medium- and heavy-duty trucks in the major markets continued to be impacted by difficult market conditions. The European market returned to a lower level in the first half of 2014 after the strong effect of purchases brought forward in late 2013 due to the impending introduction of Euro VI emission regulations. In the second quarter, the market volume just failed to match the relatively weak level of the prior-year period. The Japanese market for light-, medium- and heavy-duty trucks was also influenced by special effects. The increase in value-added tax as of April 1, 2014 led to purchases being brought forward also in this market; a resulting market weakness was only to be observed in April, however. But in the full quarter, the market continued its solid growth trend. The North American market continued to develop favorably in Class 6-8 and surpassed the prior-year level by nearly 10%. In the Brazilian market, the segment of medium- and heavy-duty trucks continued to contract due to the disappointing economic situation. In India, however, there are increasing signs of market stabilization after the significant double-digit decreases in recent quarters. There were still no signs of an end to the market contraction In Russia. According to recent estimates, the market was down on its prior-year level by a double-digit percentage. In China, the effects of the introduction of new emission limits are increasingly apparent. The market contracted in the second quarter compared with the prior-year period.

Demand for vans in Europe increased slightly compared with the second quarter of last year. The North American van market benefited from an even stronger recovery. The market for vans in Latin America contracted significantly due to the general economic situation there.

In the second quarter of 2014, the bus market in Western Europe developed significantly better than in the prior-year period. Demand decreased overall in Eastern Europe, however, because of the significantly reduced volume in Turkey. Due to the difficult economic situation in Brazil and Argentina, the Latin American market was also smaller than in the second quarter of 2013.

Significant growth in second-quarter unit sales

In the second quarter of this year, the Daimler Group sold 628,900 cars and commercial vehicles worldwide, surpassing the prior-year total by 4%.

Mercedes-Benz Cars achieved a new record for unit sales in the second quarter of 2014. Total sales by the car division grew by 3% to 418,700 units. In a volatile European market environment, Mercedes-Benz Cars performed very well and was able to increase its share of nearly all markets. In Western Europe (excluding Germany), Mercedes-Benz Cars sold 98,700 vehicles, slightly more than the 98,500 sold in the second quarter of last year. In the German market, the division sold 73,200 vehicles (Q2 2013: 79,800). In our biggest export market, the United States, the division was more successful than ever before with sales of 81,900 units, representing growth of 7%. In China, Mercedes-Benz Cars continued its strong development and increased its unit sales by 13% to 68,100 vehicles.

Second-quarter sales of 126,100 units by Daimler Trucks were 2% above the prior-year level, whereby regional developments differed greatly. In Western Europe, sales of 13,200 units were 7% lower than in the second quarter of last year, primarily due to purchases being brought forward because of the introduction of Euro VI emission limits at the end of 2013. At the same time, we increased the market share of our Mercedes-Benz vehicles in the medium- and heavy-duty segment by 2.2 percentage points to 26.2%. Our unit sales in Eastern Europe were lower than in the prior-year period, with a particularly sharp decrease in Russia. In Latin America, the current economic situation continued to have a negative impact on demand for trucks. Our sales in that market of 11,900 units were down by 26% compared with the prior-year period. Despite the difficult market environment, we were able to improve our market position in Brazil and achieved a market share of 25.7% (Q2 2013: 24.9%) in the medium- and heavy-duty segment. In the NAFTA region, increased market demand led to an increase in unit sales of 18% to 41,100 vehicles. Our market share in Class 6-8 was 36.0% (Q2 2013: 38.3%), so we once again clearly defended our market leadership. In Asia, our sales of 42,800 units in a highly varied market environment were slightly higher than in the prior-year period. In the overall Japanese truck market, we sold 8,900 FUSO vehicles, slightly more than in the second quarter of 2013, and thus increased our market share to 21.4% (Q2 2013: 19.9%). In India, we succeeded in further improving our market share of the medium- and heavy-duty segment with our BharatBenz vehicles.

In the second quarter of 2014, Mercedes-Benz Vans significantly increased its unit sales to 76,000 vehicles (Q2 2013: 69,400). In its core Western Europe region, the van division achieved a strong increase in unit sales of 17% to 49,600 vehicles. Due to the volatile market environment in Turkey, sales of 6,400 units in Eastern Europe did not match the high level of the prior-year period (Q2 2013: 7,200). In the United States, sales of 7,200 units were 18% above the prior-year level. We achieved double-digit growth rates also in China, with growth of 17% to 3,900 units. In Latin America, however, our unit sales decreased significantly compared with the second quarter of last year (-22%).

Daimler Buses’ unit sales of 8,100 buses and bus chassis in the second quarter were 2% higher than in the prior-year period. Growth in Western Europe was stimulated by increased demand for complete buses and more than offset the decreasing sales of bus chassis in Latin America. In Western Europe, we sold 1,700 units of the Mercedes-Benz and Setra brands. Due to the current market situation, unit sales in Turkey were lower than in the prior-year period. In Latin America (excluding Mexico), sales of 4,300 units were below the prior-year level (Q2 2013: 4,500). The main factor behind the negative development of our unit sales was the difficult economic situation in Argentina.

At Daimler Financial Services, new business increased compared with the prior-year quarter by 12% to €11.5 billion. Contract volume reached €88.1 billion at the end of June and was thus 5% higher than at the end of 2013. The insurance business also continued to develop very positively.

The Daimler Group’s second-quarter revenue amounted to €31.5 billion, which is 6% higher than in the second quarter of last year. Adjusted for exchange-rate effects, revenue grew by 11%.

Strong demand for automobiles in combination with a favorable model mix at Mercedes-Benz Cars led to revenue rising at a higher rate than unit sales, namely by 9% to €17.8 billion. Revenue of nearly €8.0 billion at Daimler Trucks was at the prior-year level and did not reflect the slight increase in unit sales due in particular to exchange-rate effects. The 2% growth in revenue to €2.5 billion at Mercedes-Benz Vans was also disproportionately low due to currency effects. However, Daimler Buses increased its revenue by 12%, a higher rate than for unit sales, to €1.0 billion. This is primarily a reflection of the higher proportion of complete buses.

C.01

Unit sales by division
  Q2 2014 Q2 2013 % change
       
Daimler Group 628,857 605,823 +4
Mercedes-Benz Cars 418,685 404,711 +3
Daimler Trucks 126,066 123,763 +2
Mercedes-Benz Vans 76,009 69,436 +9
Daimler Buses 8,097 7,913 +2

C.02

Revenue by division
In millions of euros Q2 2014 Q2 2013 % change
       
Daimler Group 31,544 29,692 +6
Mercedes-Benz Cars 17,771 16,324 +9
Daimler Trucks 7,966 7,965 +0
Mercedes-Benz Vans 2,494 2,434 +2
Daimler Buses 1,048 934 +12
Daimler Financial Services 3,828 3,548 +8
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