Annual Report 2016

Automobile markets

Despite the relatively weak world economy, global demand for cars continued its favorable development in 2016. From the starting point of last year’s record level, worldwide car sales increased by just over 5 %. However, this result was significantly boosted by the strong market growth in China. Otherwise, global demand was rather mixed. The European market posted significant growth, while the US market grew only slightly. The development of demand in the major emerging markets remained varied. (See graphic B.06)

Once again, the Chinese market made by far the biggest contribution to the growth of the world market. This was partially due to the gradual acceleration of the country’s economic growth during the year, as well as state tax incentives for purchasers of cars with small engines, which boosted demand by approximately 18 %. Especially in the later months, the planned reduction in the incentives at year-end led to a sharp increase in sales figures.

B.06 Global automotive markets

Demand for cars in Western Europe continued its positive development. Despite increasing political uncertainty, market recovery continued with an increase of about 6 %. This growth took place on a broad basis. Demand in the core markets of Germany and France remained very robust with increases of 4.5 % and approximately 5 % respectively. The British market has so far been unaffected by the Brexit vote and with growth of just over 2 % reached a new record volume of approximately 2.7 million cars sold. The strongest growth of all Western European volume markets of 16 % was recorded in Italy, although this came from a relatively low level. The Russian car market continued to be difficult and contracted again significantly.

The US market for cars and light trucks expanded slightly compared with the previous year and reached a new record volume of approximately 17.5 million vehicles. The SUV and pickup segments developed significantly better than demand for traditional sedans. The Japanese car market posted a moderate correction, with contraction of about 1.5 %. The Indian market once again grew significantly. But demand for cars in Brazil decreased again by a double-digit rate.

Worldwide demand for medium- and heavy-duty trucks was affected much more by the rather weak world economy than the car segment. In the sale markets relevant for us, demand was in total significantly lower than in 2015.

The North American market suffered from weaker overall investment. In weight classes 6-8, market volume contracted by 12 %. The drop in demand was especially severe in the high-margin, heavy-duty segment (class 8) with a fall of approximately 20 %, while the medium-duty segment (classes 6-7) actually grew by about 5 %.

The market of the EU30 region (European Union, Switzerland and Norway) once again enjoyed strong growth of approximately11 %, but with significant deceleration towards the end of the year. The large individual markets expanded, some of them significantly. Although the British market weakened somewhat following the Brexit referendum, it was still stronger than in 2015 over the full year. Considerable political uncertainty and the purchases brought forward due to the introduction of the

Euro VI emission standard on January 1, 2016 meant that demand in Turkey slumped by more than 45 % compared with the previous year. The Brazilian market contracted significantly once again. Starting from an already very low level, sales decreased again by approximately 30 %. Demand for trucks in Russia stabilized during the year, however, and was slightly above the low prior-year level. There was a strong market recovery in China, where the number of trucks sold increased by about 40 %.

From Daimler’s perspective, the main Asian markets were rather mixed. The Japanese market for light-, medium- and heavy-duty trucks expanded slightly despite rather sluggish economic growth, and therefore remained at a solid level. However, demand in Indonesia was still weak and decreased by more than 10 % from the previous year’s low level. The Indian market for medium- and heavy-duty trucks expanded slightly compared with 2015. While demand was 25 % above the prior-year level in the first half of the year, it weakened considerably in the second half. This was mainly caused by uncertainty regarding the planned reform of value-added tax, which could significantly improve the tax conditions for truck purchases in India in 2017.

Demand for vans in Western Europe continued to grow in 2016. The market volume increased for mid-size and large vans by 14 % and for small vans by 11 %. The overall van market in Germany grew by 12 %. The US market for large vans also continued its very positive development with growth of 14 %. In China, however, there was significant contraction of the market segment we address there. Due to the unfavorable economic situation, the market for large vans in Latin America contracted sharply once again.

The market volume for buses in the EU30 region expanded by approximately 5 % compared with the previous year. Due to the continuation of difficult economic conditions, demand in Brazil was significantly below the prior-year level, with contraction of about 34 %. As a result of the currently difficult situation, domestic demand in Turkey decreased significantly compared with 2015.

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