Annual Report 2016

Business model

Daimler can look back on a tradition covering 130 years — a tradition that extends back to Gottlieb Daimler and Carl Benz, the inventors of the automobile, and features pioneering achievements in automotive engineering. Today, the Daimler Group is a globally leading vehicle manufacturer that offers an unparalleled range of premium automobiles, trucks, vans and buses. The product portfolio is rounded out by a range of tailored financial services and mobility services. Daimler’s goal is to continue to play a leading role in the automotive industry in the development of products and services for the future of mobility.

Daimler AG is the parent company of the Daimler Group and is domiciled in Stuttgart (Mercedesstraße 137, 70327 Stuttgart, Germany). The main business of Daimler AG is the development, production and distribution of cars, trucks and vans in Germany and the management of the Daimler Group. The management reports for Daimler AG and for the Daimler Group are combined in this management report.

With its strong brands, Daimler is active in nearly all the countries of the world. The Group has production facilities in a total of 19 countries and more than 8,500 sales centers worldwide. The global networks of research and development activities and of production and sales locations give Daimler considerable advantages in international competition and also offer additional growth opportunities. In addition, we can apply our innovations in a broad portfolio of vehicles while utilizing experience and expertise from all parts of the Group. This also helps us with the further development of technologies and services that point the way forward to the future of mobility. Additional potential is generated by the digitization of our processes and products.

B.01 Consolidated revenue by division

In 2016, Daimler increased its revenue by 3 % to €153.3 billion. The Group’s five divisions contributed to this total as follows: Mercedes-Benz Cars 56 %, Daimler Trucks 21 %, Mercedes-Benz Vans 8 %, Daimler Buses 3 % and Daimler Financial Services 13 %. At the end of 2016, Daimler employed a total workforce of more than 282,000 men and women worldwide.

The products supplied by the Mercedes-Benz Cars division comprise a broad spectrum of premium vehicles of the Mercedes-Benz brand, its Mercedes-AMG high-performance brand and its Mercedes-Maybach luxury brand. These vehicles range from the compact models of the A-Class and B-Class to a highly varied program of sport utility vehicles, roadsters, coupes and convertibles and S-Class luxury sedans. The portfolio is rounded out by the Mercedes me sub-brand and the high-quality small cars of the smart brand. Furthermore, we launched the new EQ brand in 2016 for all activities connected with electric mobility. The most important markets for Mercedes-Benz Cars in 2016 were China with 22 % of unit sales, the United States (16 %), Germany (14 %) and the other European markets (30 %). In the context of its growth strategy, the division is continually further developing its flexible and efficient production network with 29 plants on four continents. The plants are operating at a high level of capacity utilization, so we are expanding our production capacities with a new facility in Jawor, Poland, and a second, highly flexible plant in Kecskemét, Hungary. The German facilities are our lead plants and competence centers and form the backbone of the worldwide production organization. In connection with our electric offensive, we are examining the possibility of producing electric vehicles and components at existing sites within our global production network. Thanks to highly flexible structures, we can produce vehicles with different drive systems in our plants, allowing us to react flexibly and quickly to changing demand in the markets. The first series-production vehicle from the EQ brand will be produced at our plant in Bremen. We have already started with intensive preparations there.

As the biggest globally active manufacturer of trucks above 6 metric tons gross vehicle weight, Daimler Trucks develops and produces vehicles in a global network under the brands Mercedes-Benz, Freightliner, Western Star, FUSO and BharatBenz. The division’s 26 production facilities are located in the NAFTA region (14), Europe (7), Asia (3) and South America (2). In China, Beijing Foton Daimler Automotive Co., Ltd. (BFDA), a joint venture with our Chinese partner Beiqi Foton Motor Co., Ltd., has been producing trucks under the Auman brand name since 2012. Daimler Trucks’ product range includes light, medium and heavy-duty trucks for local and long-distance deliveries and construction sites, as well as special vehicles used mainly in municipal applications. Due to close links in terms of production technology, the division’s product range also includes the buses of the Thomas Built Buses and FUSO brands. Daimler Trucks’ most important sales markets in 2016 were the NAFTA region with 35 % of unit sales, Asia (30 %), the EU30 region (European Union, Switzerland and Norway — 19 %) and Latin America excluding Mexico (7 %).

Mercedes-Benz Vans is a global supplier of a complete range of vans and associated services. The division’s product range in the segment for commercial vans comprises the Sprinter large van, the Vito mid-size van (marketed as the “Metris” in the United States) and the Mercedes-Benz Citan urban delivery van. The range of vans in the private-customer segment consists of the V-Class multi-purpose vehicle (MPV) and the Marco Polo camper vans and recreational vehicles. Mercedes-Benz Vans has manufacturing facilities at a total of nine locations in Germany, Spain, the United States and Argentina, as well as in China within the framework of the Fujian Benz Automotive Co., Ltd. joint venture, in France in the context of the strategic alliance with Renault-Nissan, and in Russia in cooperation with our partners GAZ and YaMZ. The most important markets for vans at present are in the EU30 region, which accounts for 70 % of unit sales in the reporting year, and the NAFTA region (12 % of unit sales). We are also systematically exploiting new growth potential within the framework of the “Mercedes-Benz Vans goes global” business strategy. For example, we are moving into new product segments and we will become the first premium manufacturer to introduce a model series in the very promising segment of mid-size pickups when we launch the X-Class at the end of 2017. We are also expanding our presence in growth markets. In the summer of 2016, we began building a new Sprinter production facility in South Carolina in the United States. We also expanded our presence in China, the world’s biggest automotive market, by launching the V-Class and the Vito there in 2016.

The Daimler Buses division with its brands Mercedes-Benz and Setra is the undisputed industry leader for buses above 8 metric tons in its traditional core markets in the EU30 region, Brazil, Turkey, Argentina and Mexico. The division’s product range comprises city and intercity buses, coaches and bus chassis. The largest of the division’s 14 production sites are located in Germany, France, Spain, Turkey, Argentina, Brazil and Mexico, and since 2015, in India as well. In 2016, Daimler Buses generated 66 % of its revenue in the EU30 region and 13 % in Latin America (excluding Mexico). While we mainly sell fully equipped buses in Europe, our business in Latin America, Mexico, Africa and Asia is focused on the production and distribution of bus chassis.

B.02 Business Units
 

The Daimler Financial Services division supports the sales of the Daimler Group’s automotive brands in approximately 40 countries worldwide. Its product portfolio primarily consists of tailored financing and leasing packages for customers and dealers, but also insurance brokering, fleet management services, investment products and credit cards, as well as various mobility services such as the “moovel” mobility platform. With the mytaxi app, following the merger with Hailo, we now reach approximately 6 million customers in more than 50 cities. The flexible mobility concept car2go is used by more than 2.2 million customers worldwide. The main areas of the division’s activities are Western Europe and North America, and increasingly China as well. During the year under review, Daimler Financial Services financed or leased about 50 % of the vehicles sold by Daimler. The division’s contract volume of €132.6 billion covers more than 4.3 million vehicles. Daimler Financial Services also holds a 45 % interest in the Toll Collect consortium, which operates an electronic road-charging system for trucks on highways in Germany.

Daimler is active in the global automotive industry and related sectors also through a broad network of subsidiaries, holdings and partnerships. The statement of investments of Daimler AG in accordance with Section 313 of the German Commercial Code (HGB) can be found in Note 40 of the Notes to the Consolidated Financial Statements.

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