Annual Report 2016

Automotive markets

Worldwide demand for cars is likely to increase again from a high level in 2017. According to current forecasts, slight growth in the magnitude of 1 to 2 % is to be expected. One of the factors decisive for global economic dynamism will be the extent to which market growth weakens in China, now that the tax incentives for cars with small engines have been reduced since the beginning of 2017. Despite the dynamic market development in 2016, we anticipate further slight growth in China.

The US market for cars and light trucks should this year maintain its exceptionally high level of more than 17 million units sold. Possible fiscal-policy stimulus from the new US government could have an additional positive impact on demand. In Europe, we expect a slightly larger market overall. In Western Europe, it must be assumed that the number of cars sold will be only at about the level of 2016, following the rather lively recovery of recent years. The solid market volume that has meanwhile been reached again and the somewhat dampened economic growth following the Brexit vote in the United Kingdom are the main reasons for the expected stagnation of demand. In key markets such as Germany and France, slight growth is to be anticipated at best, and a market correction is likely in the UK. After the drastic contraction of recent years, the Russian car market should recover in 2017.

Following two years of falling demand, we expect a stabilization of car sales in Japan this year. In India, the dynamic growth of recent years is likely to continue with another significant increase in demand.

Demand for medium- and heavy-duty trucks in the regions relevant for us is likely to remain at the rather weak prior-year level.

In the NAFTA region, the cyclical market correction can be expected to continue. In weight classes 6-8, it must be assumed that demand will decrease by approximately 5 % after the significant drop in 2016. In the heavy-duty segment (class 8), the weakening of demand is likely to be rather more pronounced.

The market of the EU30 region (European Union, Switzerland and Norway) temporarily peaked last year, according to current assessments. In a rather more restrained economic environment than last year, we expect truck sales to decrease slightly. After the end of the deep economic recession in Brazil, only a slight recovery of the truck market from a very low level can be expected there. And after last year’s dramatic slump in Turkey, a further slight decrease is anticipated. Starting from a very low level, significant recovery of demand is to be expected in Russia. The Chinese market should remain fairly stable, following its strong growth of 2016.

The most important Asian markets from Daimler’s perspective are likely to present a mixed picture in 2017. As the Japanese market for light-, medium- and heavy-duty trucks has remained at a relatively sound level for several years, a market correction of about 5 % is now expected. Following the significant drops in demand of recent years in Indonesia, the overall truck market there is expected to be of the magnitude of 2016. Slight market expansion is anticipated for India. The planned reform of sales taxes, which would reduce truck prices, could have a positive impact on demand during the year.

We expect a slight increase in demand for small, mid-size and large vans in the EU30 region in 2017, driven in particular by the German van market, but also by other major European markets. In the United States, demand for large vans is likely to remain fairly stable. On the other hand, the market for mid-size and large vans in Latin America should revive significantly in 2017, although from a very low level. In China, we also anticipate a revival of demand in the market we address there.

We expect slight growth in the market for buses in the EU30 region compared with 2016. The market development in Latin America continues to be negatively impacted by the current economic situation in Argentina and Brazil. After the significant drop in demand of recent years, we assume that the market bottomed out in 2016. We anticipate a significant recovery in the year 2017, especially in Brazil, but the market volume will continue to be at a very low level.

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