Annual Report 2016

Mercedes-Benz Cars

Mercedes-Benz Cars continued to grow profitably and very dynamically in 2016. Unit sales and revenue increased once again, and earnings before interest and taxes reached a record level, despite the considerable advance investment we made in our product offensive. Our most important new model in the year under review was the new E-Class, “the world’s most intelligent business sedan.” Our model offensive focused on convertibles and roadsters as well. We also once again extended and modernized our very successful range of SUVs. In addition, our new EQ brand and the fascinating Concept EQ vehicle study have laid the foundation for a broad-based electric mobility offensive at Mercedes-Benz Cars.

Growth continues

The Mercedes-Benz Cars division consists of the Mercedes-Benz brand with the Mercedes-AMG, Mercedes-Maybach and Mercedes me sub-brands, as well as the smart brand and the new EQ brand for electric mobility. The division continued on its course of profitable growth in the year under review, with unit sales increasing by 10 % to the new record level of 2,198,000 vehicles and revenue rising by 7 % to €89.3 billion. (See table C.01) We were also able to gain market share in nearly all regions. Our positive overall business development throughout the year was largely due to our new products, in particular our attractive SUVs and the new E-Class. Despite considerable advance investment in our product offensive, we were also able to increase EBIT slightly, to €8.1 billion (2015: €7.9 billion). When adjusted for special items, EBIT corresponds to a return on sales that is higher than our target.

C.01 Mercedes-Benz Cars

  2016 2015 16/15
€ amounts in millions     % change
       
Revenue 89,284 83,809 +7
EBIT 8,112 7,926 +2
Return on sales (in %) 9.1 9.5 .
Investment in property, plant and equipment 4,147 3,629 +14
Research and development expenditure 5,671 4,711 +20
thereof capitalized 2,008 1,612 +25
Production 2,235,352 2,059,823 +9
Unit sales 2,197,956 2,001,438 +10
Employees (December 31) 139,947 136,941 +2

Mercedes-Benz once again posts record unit sales

The Mercedes-Benz brand increased its unit sales by 9 % to 2,053,500 vehicles in 2016. Global growth at Mercedes-Benz therefore not only outpaced that of its German competitors, the division also delivered more premium-segment vehicles worldwide than any other automaker. (See table C.02) In fact, we are the number one manufacturer in the premium segment in Germany, several core European markets, the United States, Canada and Japan. We also significantly improved our position in China in the year under review.

C.02 Unit sales Mercedes-Benz Cars

  2016 2015 16/15
in thousands     % change
       
Mercedes-Benz 2,054 1,880 +9
thereof A-/B-Class 435 425 +2
C-Class 490 470 +4
E-Class 304 306 -1
S-Class 84 106 -21
SUVs1 712 543 +31
Sports cars 27 29 -7
smart 144 121 +19
Mercedes-Benz Cars 2,198 2,001 +10
thereof Europe 980 874 +12
thereof Germany 314 296 +6
NAFTA region 406 412 -1
thereof United States 347 359 -3
Asia 715 618 +16
thereof China 488 400 +22
1 Including the GLA

Mercedes-Benz sold a total of 872,200 vehicles in Europe in 2016, an increase of 12 % on the previous year. Double-digit growth was recorded in the volume markets of the United Kingdom (+15 %), France (+18 %), Italy (+16 %) and Spain (+20 %). We also increased our unit sales in Germany by 6 % to 275,900 vehicles. Sales rose by 20 % in China, where we outperformed both the market as a whole and important competitors in the year under review. Sales in the NAFTA region were slightly below the prior year’s level. Although sales rose in Mexico, they declined slightly in the United States and Canada. Sales in Japan decreased by 6 % from the previous year as a result of general market developments in that country. However, we were able to record substantial increases in unit sales in South Korea (+33 %), Australia (+17 %) and Taiwan (+12 %).

The main contribution to the growth in unit sales came from our SUVs. All in all, sales in the SUV segment increased by 31 % to 712,100 units. This positive development was primarily due to the GLC and GLE models, as well as high demand for our SUVs in China. Our A-Class and B-Class models also remained very popular, with sales of these cars increasing by 2 % in 2016. Including the CLA and CLA Shooting Brake, a total of 435,400 of these models were delivered to customers. Demand for our C-Class models also remained very strong, with sales increasing by 4 % to 490,200 sedans, wagons, coupes and convertibles in the year under review. In the year of the model changeover, sales of the E-Class nearly reached the prior year’s level. The new E-Class met with a very positive response from customers, which generated powerful sales momentum in the second half of the year. In total, we sold 304,200 cars in the E-Class segment in 2016, including 188,300 units of the new model. The S-Class performed very well in 2016. With sales of 84,300 units (-21 %), the S-Class was once again the world’s bestselling luxury sedan.

The new E-Class: a masterpiece of intelligence

In January 2016, Mercedes-Benz presented the new E-Class sedan at the North American International Auto Show in Detroit. The vehicle marks a further milestone on the road to accident-free and autonomous driving. The sedan’s attractive design, outstanding comfort and connectivity features all serve to strengthen the loyalty of existing customers and attract new customer groups. Clarity and emotion define the design of the new Mercedes-Benz E-Class, and high-end materials characterize the interior. The new E-Class also features numerous technological innovations that celebrated their world premieres in the model. Mercedes-Benz has taken the next step on the road to autonomous driving with numerous new driver-assistance features. With them, the new E-Class can not only automatically maintain a proper distance to vehicles ahead on highways and country roads, but can also keep the E-Class in its lane at speeds of up to 210 km/h.

Driven: Feature presentation of the E-Class – Mercedes-Benz original

The first new E-Class sedan models were delivered to customers in April 2016. A superior driving experience is ensured by a four-cylinder gasoline engine and an all-new four-cylinder diesel engine with an output of 143 kW (195 hp). The latter unit makes a big impression with very low NEDC fuel consumption in the E 220 d (fuel consumption in l/100 km urban: 4.7–4.3 /extra-urban: 4.1–3.6 / combined: 4.3–3.9; CO2 emissions in g/km combined: 112-102). (See Sustainability and Integrity)

More economical and powerful, more lightweight and compact - the new OM 654 diesel engine

The year under review also saw the launch of the E 350 e(fuel consumption in l/100km combined: 2.1; CO emissions in g/km combined: 49; electricity consumption in kWh/100km combined: 11.5).With a system output of 210 kW (286 hp), this plug-in hybrid offers the performance of a sports car and the efficiency of a subcompact.

The new E-Class wagon was then presented to the public in June 2016. Like its predecessor, this model is one of the most spacious vehicles in its segment. The model has up to 1,820 liters of cargo space. Moreover, despite a much sportier roof line, space in the rear is once again outstanding for this vehicle class. Developers focused here on practical dimensions and the use of an innovative cargo-space management approach.

In September, Mercedes-Benz presented a new member of the E-Class family in Paris — the new E-Class All-Terrain, which combines a striking appearance in SUV style with the intelligent space concept of the wagon and pioneering E-Class safety innovations. With 4MATIC all-wheel drive as standard and higher ground clearance thanks to the AIR BODY CONTROL multi-chamber air suspension (also standard), the All-Terrain is a true all-rounder with outstanding versatility.

The dream car with the star

Our model offensive during the year under review also focused on convertibles and roadsters. Our range of convertible dream cars extends from the smart fortwo convertible to the S-Class convertible. Mercedes-Benz Cars now offers more young convertibles and roadsters than any other manufacturer. With the world premiere of the first-ever convertible based on the C-Class at the Geneva Motor Show in March 2016, Mercedes-Benz rounded out its range of convertibles in the classic soft-top style. The model is optionally available with the AIRCAP automatic draft stop system and AIRSCARF neck-level heating, which guarantee exceptional comfort during open-top driving 365 days a year. Sporty and agile handling is ensured by efficient and powerful engines and dynamically designed suspension — with AIRMATIC air suspension as an option.

The new S-Class convertible is the sixth variant of the current S-Class family and the first open-top luxury four-seater from Mercedes-Benz since 1971. The sporty and elegant model celebrated its world premiere at the IAA in September 2015 and deliveries began in April 2016. With this new model, Mercedes-Benz has fulfilled its pledge to build the most comfortable convertible in the world.

The new Mercedes-Benz SL has been extensively optimized both technologically and visually and has been available since April 2016. More powerful engines, 9G-TRONIC automatic transmission, DYNAMIC SELECT with five driving modes and Active Body Control with the curve tilting function all take this automotive legend to a new dynamic level. In visual terms, the front end in particular has been made much sportier and includes a new hood, new bumpers and new headlights.

To coincide with its 20th anniversary, the compact SLK roadster was relaunched in April 2016 with significantly optimized engineering features an even more attractive appearance and a new name — the SLC. A particularly striking aspect of the new model is its diamond radiator grille, which is a standard feature.

The new GLS — the S-Class of SUVs

During the year under review, we continued our SUV offensive with the GLS, customer deliveries of which began in the spring of 2016. Like its predecessor, the GL, the new GLS sets standards in the SUV world. The full-fledged seven-seater combines luxury with impressive comfort, agile handling and best-in-class safety. With a total of seven models in all classes, Mercedes-Benz offers a more extensive range of SUVs than any other premium brand.

The sports coupe of SUVs

In September 2016, we extended our range of SUVs to include the all-new GLC coupe, a vehicle that combines the distinctive main body section and the Mercedes design idiom of current SUV models with the characteristic elongated roof line of a sports coupe. This sports car among the mid-size SUVs from Mercedes-Benz also makes a big impression with its typical Mercedes safety features, state-of-the-art assistance systems and outstanding sporty-dynamic character. The model’s standard sports suspension, more direct sports steering, DYNAMIC SELECT and 4MATIC permanent all-wheel drive with the 9G-TRONIC nine-speed automatic transmission combine superior ride comfort with exceptionally sporty agility.

The new GLC Coupé - Trailer

EQ: electric mobility redefined

With the Concept EQ, Mercedes Benz demonstrated at the Paris Motor Show that electric cars can soon move into the fast lane. The concept car, which has the appearance of a sporty SUV coupe, offers a preview of a new generation of vehicles with battery-electric drive. With a range of up to 500 kilometers and the typical Mercedes strengths of safety, comfort, functionality and connectivity, the Concept EQ meets every requirement in terms of cutting-edge sustainable mobility. The vehicle also features innovative solutions inside — including a completely new interior concept. The Concept EQ offers a preview of the new EQ product brand for electric mobility. (See Future mobility)

Mercedes-Maybach: perfection blended with exclusivity

Mercedes-Maybach stands for the highest levels of exclusivity and individuality. The luxury brand, which was introduced in November 2014, combines the perfection of the Mercedes-Benz S-Class with the exclusivity of a Maybach. The Mercedes-Maybach S 600 Pullman launched in early 2016 (fuel consumption in l/100 km urban: 19.6 / extra-urban: 10.3 / combined: 13.6; CO2 emissions in g/km combined: 314) has a face-to-face seating configuration and is a clear top-of-the-line model. Mercedes-Maybach will launch its first convertible in the spring of 2017. The special characteristics of the model, of which a limited edition of only 300 units will be built, include high-end appointments in the interior. The Vision Mercedes-Maybach 6 concept vehicle is a sensational luxury-class coupe offering a preview of the future of the Mercedes-Maybach brand. The 2+2-seater pays tribute to the age of the Aero-Coupes and transports this tradition into the future. The vehicle’s electric drive system has an output of 550 kW (750 hp), and the flat underfloor battery has a range of more 500 kilometers according to the NEDC. The battery also boasts a visionary fast-charging feature that allows for an impressive charging power of up to 350 kW. As a result, it takes only five minutes to charge the battery up to a level enabling a further 100 kilometers of driving.

Vision Mercedes-Maybach 6 – Trailer

Mercedes-AMG: the sports-car and performance brand

The brand claim of “Driving Performance” reflects the two core competencies of Mercedes-AMG: the ability to provide an unparalleled driving experience and the ability to serve as a driving force in the high-performance segment. The Mercedes-AMG sports-car brand enhances the fascination of Mercedes-Benz. The brand’s dynamic vehicles especially attract young and sporty customers to the brand with the three-pointed star. Mercedes-AMG models differ extensively from their production-model cousins in terms of both engineering and appearance, thus strengthening the authenticity and distinctive identity of the Mercedes-AMG brand. Mercedes-AMG positions itself even more aggressively as a dynamic sports car and high-performance brand with the GT. The latest members of this sports car family are the Mercedes-AMG GT Roadster (fuel consumption in l/100 km urban: 15.1–12.2 / extra-urban: 9.0-7.8 / combined: 11.4–9.4; CO2 emissions in g/km combined: 259-219). True to its philosophy of blending performance with responsibility, Mercedes-AMG is also striving to become even more efficient through new engine technologies and a comprehensive lightweight design approach. Mercedes-AMG models already have some of the lowest emissions in their segments. The sports-car and performance brand from Mercedes-Benz, which is celebrating its 50th anniversary in 2017, extended its product range by more than ten models and delivered 99,200 vehicles to customers in 2016 (+44 %). As a result, sales at Mercedes-AMG have more than tripled over the last three years.

Open-top driving performance. Trailer

smart celebrates a sales milestone and launches new electric vehicles and innovative services

The smart brand achieved a major milestone in September 2016 when it celebrated the sale of more than two million vehicles since 1998. smart cars are now sold in 46 markets worldwide. Total sales of smart-brand vehicles increased by 19 % to the new record of 144,400 units in 2016. The smart was particularly popular in China, where sales increased by 70 % compared with the previous year. China is now the smart brand’s third-biggest sales market after Germany and Italy.

The most important new smart-brand products in the year under review were the new electric drive models (electricity consumption combined: 13.1–12.9 kWh/100 km; CO2 emissions combined: 0 g/km). These vehicles have made the switch to electric mobility more attractive than ever, as they combine the agility of a smart with locally emission-free driving — the ideal combination for urban mobility. The enjoyment of driving an electric vehicle can now also be experienced for the first time in the four-seat smart forfour, along with the smart fortwo coupe and smart fortwo convertible. The new smart electric drive models had their world premiere at the Paris Motor Show in October 2016; market launch is scheduled to begin in the spring of 2017. (See Three for the charging station)

smart introduces fourth generation electric drive

The smart brand has played a pioneering role in the automotive industry since it was launched in 1998, and it continues to redefine urban mobility on a regular basis. In 2016, smart introduced an innovative range of services that expands the utility of smart vehicles in urban settings beyond the basic aspect of driving itself. The first such service is “smart ready to drop,” which makes it possible to deliver parcels straight to a smart vehicle’s trunk. This system, which also allows for parcel return pick-ups, is operated in cooperation with DHL and makes online purchasing even more convenient. It is just one of the many innovative services that will be offered by the smart brand in the future.

Production “in China for China”

If we are to continue growing in China, we need to be able to offer the right products and manufacture them locally. Our product lineup in China was more attractive than ever in 2016. During the year under review, we launched more than ten new or revised models in China, including the new GLS and several smart models. Mercedes-Benz presented the long-wheelbase version of the new E-Class at Auto China in April 2016. This model is tailored to the requirements of the growing Chinese market and is manufactured locally. The long-wheelbase version of the E-Class is 140 millimeters longer than the base model, providing considerably more legroom for passengers in the rear of the vehicle, as well as seats with numerous comfort features. With the launch of the DENZA 400, the second generation of an electric vehicle with a range of up to 400 kilometers, we have also expanded our portfolio of emission-free products in China. The DENZA is built in China for China by the joint venture Shenzen DENZA New Energy Automotive Co., Ltd. In June 2016, Daimler and its joint-venture partner BAIC announced that they will invest more than €500 million in the expansion of their shared engine plant in Beijing.

All in all, we were able to increase sales of Mercedes-Benz brand vehicles in China by 20 % to 465,400 units, thus significantly outpacing the growth of the automotive market as a whole. A total of 317,100 of the vehicles we sold in China during the reporting year (2015: 250,200) were manufactured locally at facilities operated by our Beijing Benz Automotive Co Ltd. joint venture (BBAC).

Best Customer Experience

Within the framework of the “Best Customer Experience” marketing and sales strategy, Mercedes-Benz is aligning its sales and marketing organization with changing customer requirements. The goal is to address new target groups while maintaining the brand loyalty of established customers. To this end, Mercedes-Benz is using new sales channels and digital portals as innovative interfaces with the brand. Various sales formats with new, digital channels and digital elements, as well as new roles in retailing, supplement the services offered at traditional Mercedes-Benz dealerships and showrooms. The centerpiece of Best Customer Experience is the range of mobility and other services offered by Mercedes me. mercedes.me This platform is also the name of a new chain of stores Mercedes-Benz has opened in inner-city locations. Various Mercedes me Stores have opened around the world since 2014. New temporary formats such as special events and pop-up stores have also been created. In addition, the “She’s Mercedes” initiative was launched in 2015. This program is designed to help Mercedes-Benz address women in a targeted manner and significantly increase its proportion of female customers over the medium term. Along with the provision of a new community and inspiration platform, the initiative also includes networking events, training programs for sales personnel and measures to increase the proportion of women in the sales workforce.

Successful motorsports year: #TheTriple

MERCEDES AMG PETRONAS captured both the Drivers’ and the Constructors’ Championship in the Formula 1 racing series for the third consecutive year in 2016, and also finished first in more races than ever before. In addition, the Mercedes-Benz hybrid-drive system, which is also used by the Williams F1, Sahara Force India and Manor-Racing Formula 1 teams, was both the most efficient and most successful drive system in the competition. Mercedes-Benz was also very successful in the popular German DTM touring car series, recording four victories and 15 podium finishes in 18 races. We also enjoyed numerous successes with the Mercedes-AMG Customer Sports program in 2016 — including a historic 1-2-3-4 finish in the prestigious Nürburgring 24-hour race. Daimler’s motorsports efforts pay off for the company — not just in the form of significant image enhancement and the extensive publicity provided by the races, but also in terms of the valuable experience we gain with the hybrid technologies and lightweight designs that we use in our motorsports activities, which are also incorporated into our series-production vehicles.

This Was #TheTriple

CO2 emissions at the previous year’s level

Mercedes-Benz Cars makes a continual effort to reduce the fuel consumption of its vehicles while enhancing their performance — and thus increasing driving enjoyment and safety. As early as 2015, we were able to reduce the CO2 emissions of newly registered vehicles from Mercedes-Benz Cars in the European Union to an average of 123 g/km. This means we achieved our 2016 target of 125 g/km ahead of schedule. We were able to maintain the figure of 123 g/km in 2016 as well, despite the fact that our sales structure in the European Union shifted to a higher proportion of mid-sized and large vehicles. This achievement was made possible by technical innovation. We further reduced the CO2 emissions of the individual models through continual improvements to our combustion engines and the use of extremely efficient hybrid drive systems. Our efforts are supported here by new and very economical models with lightweight designs and significantly improved aerodynamics, allowing us to exploit further fuel-saving potential. (See Sustainability and integrity)

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