Annual Report 2016

Daimler Trucks

In financial year 2016, the focus at Daimler Trucks was on megatrends of the future: connectivity and electric drive. With the Mercedes-Benz Urban eTruck and the third-generation FUSO eCanter, we presented new, locally emission-free vehicles for urban transport. Other topics included digital services such as Mercedes-Benz Uptime and the Fleetboard Store for apps. In this way, we once again underscored our ambition as a technology leader. We systematically strengthened our global presence with our new sales and service organization for commercial vehicles in major growth regions. And we continued to push forward with the use of intelligent platforms in 2016 with the newly developed standardized connectivity hardware, the “Truck Data Center.”

C.03 Daimler Trucks

  2016 2015 16/15
€ amounts in millions     Change in %
       
Revenue 33,187 37,578 -12
EBIT 1,948 2,576 -24
Return on sales (in %) 5.9 6.9 .
Investment in property, plant, and equipment 1,243 1,110 +12
Research and development expenditure 1,265 1,293 -2
thereof capitalized 57 26 +119
Production 411,265 506,663 -19
Unit sales 415,108 502,478 -17
Employees (December 31) 78,642 86,391 -9

C.04 Unit sales of Daimler Trucks

  2016 2015 16/15
In thousands     Change in %
       
Total 415 502 -17
EU30 80 76 +4
thereof Germany 31 32 -2
United Kingdom 8 9 -10
France 8 7 +13
NAFTA region 146 192 -24
thereof United States 122 167 -27
Latin America
(excluding Mexico)
27 31 -10
thereof Brazil 12 16 -26
Asia 125 148 -15
thereof Japan 46 46 +2
Indonesia 28 32 -13
For information purposes:      
BFDA (Auman Trucks) 78 69 +13
Total (including BFDA) 493 572 -14

Business development impacted by contracting markets

Daimler Trucks’ unit sales of 415,100 vehicles (2015: 502,500) were significantly below the high level of the previous year. Revenue decreased to €33.2 billion (2015: €37.6 billion) and EBIT fell to €1.9 billion (2015: €2.6 billion). The division’s return on sales was 5.9 % (2015: 6.9 %). Overall, the development of business last year was affected by significant market contraction in many regions. Daimler Trucks is systematically continuing the efficiency-enhancing actions initiated in 2012 with “Daimler Trucks #1.” In order to further strengthen our competitiveness, we will continue optimizing our fixed costs, in particular at the Mercedes-Benz brand. Our goal is to bring Daimler Trucks to the targeted level of profitability.

Unit sales below high prior-year level

Against the backdrop of shrinking truck markets, our unit sales decreased in most of our regions. We sold a total of 415,100 trucks in 2016 (2015: 502,500). There was positive market impetus in the EU30 region (European Union, Switzerland and Norway), although with decreasing dynamism in the second half of the year. Our unit sales there increased by 4 % to 79,800 vehicles. Our Mercedes-Benz brand maintained its market leadership in the medium- and heavy-duty segment with a share of 21.6 % (excluding the United Kingdom) (2015: 22.4 %). Our sales in Turkey fell by more than 50 % to 9,300 units (2015: 24,900). This drastic decline is the result of weaker demand due to the introduction of the Euro VI emission standard at the beginning of 2016 as well as the country’s difficult situation.

Our unit sales in Latin America continued to be impacted by the ongoing deep recession in Brazil and were once again significantly lower than in the previous year at 27,500 units (2015: 30,500). In Brazil, our main market in the region, our Mercedes-Benz brand trucks achieved market leadership and increased their share of the medium- and heavy-duty segment to 29.8 % (2015: 26.7 %). Daimler has been active in Brazil for 60 years and Mercedes-Benz do Brasil is the biggest manufacturer of trucks and buses in Latin America. But in view of the further market contraction, we were obliged to take steps to adjust our production capacities in Brazil, mainly through a program of voluntary severance packages. Irrespective of the currently difficult situation, we believe in the long-term viability of the important Latin American market.

In the NAFTA region as well, we were unable to escape the impact of the sharply contracting market for Class 8 trucks. We reacted to the market changes already in the first half of the year and reduced the workforce at our plants in North America. Sales of 145,700 trucks (2015: 191,900) were significantly lower than the unusually high number sold in the previous year. In classes 6-8, we are the market leader by a large margin with a share of 39.3 % (2015: 39.4 %). In class 8 (heavy-duty trucks), we increased our market share to 40.0 % (2015: 39.3 %). We are very successful in the North American market, especially with our integrated powertrains. Approximately 95 % of the trucks we sold in the heavy-duty segment in the United States and Canada were fitted with our integrated heavy-duty engines. Since last year, the DD5 medium-duty engine produced in Mannheim has also been available for customers in North America. Local production of the DD5 in Detroit for the North American market will start in 2018. We were able to increase the percentage of Freightliner Cascadia and Western Star 5700 XE trucks fitted with the DT12 automatic transmission in the United States and Canada to approximately 65 %. Our Thomas Built Buses brand had its 100th anniversary in the year 2016. Thomas Built Buses is one of the leading manufacturers of school buses in North America.

Our unit sales in Japan increased to 46,400 vehicles (2015: 45,600). With the FUSO brand, we increased our share of the overall Japanese truck market to 20.4 % (2015: 20.8 %). In the Indonesian market, which once again contracted sharply, our unit sales fell to 28,000 vehicles (2015: 32,100). But with a 46.7 % share of the overall truck market (2015: 48.0 %), we continue to be the market leader by a large margin with the FUSO brand. We have further strengthened our strategic position in Indonesia. In the future, our sales partner P.T. Krama Yudha Tiga Berlian Motors (KTB) will focus solely on the sale of FUSO commercial vehicles and will transfer its car business to a separate legal entity. Our Asian subsidiary Mitsubishi Fuso Truck and Bus Corporation (MFTBC) increases its interest in KTB from 18 to 30 %. Until now, we have mainly sold light- and medium-duty trucks of the FUSO brand in Indonesia. In addition, our subsidiary P.T. Mercedes-Benz Distribution Indonesia (MBDINA) will also sell new models of heavy-duty Mercedes-Benz trucks in the future; the first deliveries are already planned for the first quarter of 2017. In the medium term, we will produce our trucks from CKD kits at the Mercedes-Benz plant in Wanaherang, Indonesia.

In India, our unit sales of 13,100 trucks were below prior-year level (2015: 14,000); with our BharatBenz trucks, we achieved a market share of 6.8 % (2015: 7.3 %). Deliveries of the export vehicles produced in Chennai to markets in Asia, Latin America and Africa more than doubled to over 4,000 units in 2016. Meanwhile, more than 30 markets are already supplied with trucks from Chennai. Our sales in the Middle East decreased significantly to 17,600 vehicles (2015: 36,300). The main reasons for the sluggish investment there in 2016 were low oil prices and the ongoing conflict in the region.

Daimler Trucks further expands its global presence

In the NAFTA and EU30 regions (excluding the United Kingdom), Daimler Trucks is already very well positioned as the market leader. We continued to push forward with the regionalization of our sales-and-service organization for the commercial vehicle business in major growth regions. Within seven months, we opened six regional centers for the Middle East and North Africa, East, Central and West Africa, Southern Africa, Southeast Asia, Latin America and South Asia. With the new regional centers, we are focusing even more in those regions on the specific local features of the truck business and are therefore even closer to the customers and markets there. In China, the world’s biggest truck market, Daimler AG has a 50 % interest in Beijing Foton Daimler Automotive Co. Ltd. (BFDA), a joint venture with Beiqi Foton Motor Co. Ltd. Medium- and heavy-duty trucks of the Auman brand have been produced there since mid-2012. With the recovery of the Chinese truck market in 2016, the joint venture increased its sales of Auman trucks to 77,800 units (2015: 69,200). More than 380,000 Auman trucks have been sold since the joint venture started operations.

Highly efficient products – today and in the future

With the world premiere of the Urban eTruck (see All-electric distribution) in September 2016, Mercedes-Benz Trucks linked the two future topics of digitization and electric mobility and provided an outlook on the connected and fully electric truck of tomorrow. The locally emission-free truck for heavy distribution transport with a gross vehicle weight of up to 26 tons has a battery pack with a total capacity of 212 kilowatt hours, allowing a range of approximately 200 kilometers. Market launch is conceivable early in the next decade. Following the start of a one-year fleet test of five battery-powered FUSO Canter E-Cell trucks in Germany in April, we presented the third generation of the world’s first purely electric light truck: the new eCanter (see electric). It benefits from the extensive experience gained during customer tests with the previous generation and will be delivered to customers in Europe, the United States and Japan in a small series starting this year.

FUSO eCanter | World Premiere

We offer improved fuel consumption also with our Mercedes-Benz series products. After the further development of the Mercedes-Benz OM 471 engine in 2015, fuel efficiency has now improved again also for the latest generation of the OM 470 engine. The fuel consumption of the Actros with the OM 470 has been reduced by up to 5 % as a result of modifications to the engine and drivetrain. And also with the OM 471, the fuel consumption of the Actros can be reduced by up to 6 % compared with the previous engine due to engine modifications as well as optimized aerodynamics and drivetrain. In addition, we have pushed forward with our activities relating to the so-called integrated approach. Together with trailer manufacturer Krone, Mercedes-Benz presented a highly efficient semi-trailer truck at IAA Commercial Vehicles 2016; its fuel consumption and CO2 emissions are up to 20 % lower than those of a semi-trailer truck of 2014. The optimizations of the integrated approach were tested with five customers on the so called Efficiency Run 2016. The integrated approach includes all parties involved with goods transport by road to achieve its CO2 goals: truck manufacturers, bodybuilders, tire suppliers, logistics companies and political decision makers. The initiative was presented for the first time at IAA Commercial Vehicles 2014.

Mercedes-Benz gets nearer to the vision of accident-free driving

At IAA Commercial Vehicles in September 2016, Mercedes-Benz presented two new safety systems which are unique in the market: Active Brake Assist 4 is the first system of its kind in the world; it warns the driver of an impending collision with pedestrians and automatically initiates partial braking. Mercedes-Benz is also the first truck manufacturer to launch Sideguard Assist with person recognition. It is the first assistance system on the market that protects pedestrians and cyclists from trucks turning left or right. Active Brake Assist 4 and Sideguard Assist have been available for selected models since late 2016.

New products and services relating to connectivity

In September, we presented the new flagship for the heavy-duty class 8: the Freightliner Cascadia. The new Cascadia has made significant progress in terms of connectivity, fuel efficiency and safety. With the new connectivity platform, Detroit Connect Analytics, customers can access automated analyses of fuel efficiency and safety. Thanks to its aerodynamic design and integrated Detroit powertrain, the new Cascadia achieves fuel efficiency up to 8 % better than a 2016 Cascadia Evolution. With the new full-LED system, the new Cascadia offers a significantly larger field of vision in conditions of poor visibility. And the optional safety package Detroit Assurance 4.0 includes Active Brake Assist. Deliveries of the new Freightliner started in January 2017. In order to expand the range of Detroit Connect connectivity services with new features, Daimler Trucks North America (DTNA) is cooperating with AT&T and Microsoft. AT&T will provide its mobile-telephony service for Detroit Connect, and we are cooperating with Microsoft on the development of a new cloud-based back-office environment for Detroit Connect services.

In Europe, we are using intelligent connectivity to increase vehicle availability with the new service product Mercedes-Benz Uptime, which has been available in selected markets for the Actros, Arocs and Antos since IAA Commercial Vehicles 2016. Mercedes-Benz Uptime continuously checks vehicle systems and offers customers three key advantages: It can avoid time off the road, makes the management of repairs and maintenance more efficient, and supports the customers’ maintenance activities in real time. With the new FleetBoard Store, we presented our marketplace for apps at IAA Commercial Vehicles 2016. The platform has been designed to be open so that industry partners such as bodybuilders and app developers can contribute their own apps to make road transport more efficient. The FleetBoard Store is open for customers as of 2017.

Furthermore, Daimler Trucks is pushing forward with the further development of autonomous driving. In the first half of 2016, we presented a world premiere of three autonomously driving Mercedes-Benz trucks licensed for use on public roads, which connected into a “platoon” via Wi-Fi. (See: connected) Autonomous trucks link up with other autonomous trucks on the road to form a platoon. This saves fuel due to the small gaps between the vehicles and the resulting lower wind resistance, as well as reducing the space they need on the highway.

Extension of our platform strategy

In addition to the expansion of global presence and technology leadership, we systematically continued with the roll-out of intelligent platforms and modules in 2016. The platforms for drivetrain components for medium- and heavy-duty engines and automated transmissions have already been launched successfully. In 2016, Daimler Trucks extended its platform strategy to the chassis, which will be used across brands in the Mercedes-Benz Actros and the new Freightliner Cascadia, and to a uniform electric/electronic architecture. With the newly developed connectivity hardware, the Truck Data Center, we introduced a standardized component in 2016 that will be applied across our Daimler Trucks brands. The Truck Data Center is the heart of the connected truck where all real-time data is received and transmitted. It is already being applied through Detroit Connect Analytics in the new Freightliner Cascadia and through FleetBoard in Mercedes-Benz trucks. The Truck Data Center will also be installed in FUSO trucks as of spring 2017.

Awards for Daimler Trucks vehicles

Our products received a large number of awards once again last year. In the readers’ poll carried out by the ETM publishing house, our trucks Mercedes-Benz Atego, Antos, Actros and Arocs took first place in their respective categories. The editors of the trade magazines “Verkehrs-Rundschau” and “Trucker” gave the Mercedes-Benz Actros 1845 the Green Truck Award 2016. And for the twelfth time in succession, the Mercedes-Benz Unimog was voted the best off-road vehicle of the year in the “special vehicles” category by the readers of “Off Road” magazine.

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