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Daimler Buses returns to profitability in 2013 — Further growth expected in 2014

Great customer response to new products Record market share in Western Europe GLOBE 2013 successfully completed Significantly increasing unit sales and EBIT slightly above the prior-year level expected in 2014 Hartmut Schick, Head of Daimler Buses: “Our efforts have paid off. We achieved the turnaround and plan to continue growing in 2014.” Daimler Buses has … Continued

  • Great customer response to new products
  • Record market share in Western Europe
  • GLOBE 2013 successfully completed
  • Significantly increasing unit sales and EBIT slightly above the prior-year level expected in 2014
  • Hartmut Schick, Head of Daimler Buses: “Our efforts have paid off. We achieved the turnaround and plan to continue growing in 2014.”
Daimler Buses has completed business year 2013 as planned and returned to profitability. The Daimler AG division recorded operating profit of €124 million after posting an operating loss of €221 million in the prior year. Sales rose by 5% to 33,700 units (2012: 32,100), and revenues increased by 4% to €4.1 billion (2012: €3.9 billion). Daimler Buses is looking to significantly  increase sales and record a slight increase in earnings in 2014.
“Our efforts have paid off,” says Hartmut Schick, Head of Daimler Buses, referring to the division’s business development. “We achieved the turnaround, which offers proof of the type of performance the entire team at Daimler Buses is capable of. We want to continue this successful development in 2014 by achieving further growth.”
The sales increase solidified Daimler Buses’ leading position in its core markets. Sales growth was driven by both complete buses and bus chassis.
More than 50% market share in Germany
An increase in market share was achieved in Europe through the full availability of Mercedes-Benz and Setra Buses that comply with the stringent Euro VI emission standard that went into effect at the beginning of 2014. At 30.8% (2012: 28.3%), market share inWestern Europe was the highest ever recorded by Daimler Buses. High demand for our Mercedes-Benz buses, in particular for the new Citaro urban bus, had a very positive effect on sales in Germany, which increased by 20% to 2,400 units. Half of all buses sold inGermany last year were built by Daimler, whose market share in the country rose from 48.9% to 51.2%.
Despite a more competitive environment, sales in Turkey increased to 1,200 units last year (2012: 1,100). The market in Latin America (excluding Mexico) recovered significantly following the introduction of the stricter Euro V emissions standard in 2012. Sales of Mercedes-Benz chassis in the region rose by 7% to 19,100 units. With a market share of 41.6% (2012: 42.7%), Daimler Buses was able to maintain its leading market position in Latin America. However, demand in Brazil was below expectations due to uncertainty in the market caused by the political situation in the country.
Setra TopClass sets new standards
An important focus in 2013 was the conversion of the complete European product range to Euro VI-compliant exhaust gas technology. With a total of six premieres — from the Sprinter minibus to the super-high-deck touring coach — Daimler Buses completed its launch of a full range of Euro VI-compliant buses and coaches in 2013. Daimler Buses also set new standards in the luxury touring coach segment with the introduction of the new Setra TopClass 500. In addition, the Setra ComfortClass 500 was named Coach of the Year 2014 last fall.
GLOBE 2013 a major factor in the turnaround
Along with numerous product innovations, the systematic continuation of the GLOBE 2013 growth and efficiency program made a key contribution to the turnaround at Daimler Buses. The division successfully completed the program at the end of last year, but many of its measures are still having an effect in 2014. GLOBE 2013 focused on the systematic further development of the European production network, the reduction of variable costs, and the optimization of overhead costs. Growth in the core markets and new markets was supported by a new-customer acquisition offensive and a restructured market management system. In addition, measures to improve operations at Aftersales resulted in record revenues for the unit.
Global bus market expected to expand slightly
The economic environment for Daimler Buses in 2014 will probably be marked by continuing modest growth as well as further sharp fluctuations. Exchange rate movements in various countries such as Turkey and Argentina will have a major impact on overall developments. Despite these uncertainties, the global bus market is expected to expand slightly. Also market volume in Western Europe will probably expand slightly over prior years level.
Substantial sales growth expected for 2014; good production capacity utilization since the beginning of the year
Daimler Buses’ goal in this economic environment is to substantially increase unit sales in 2014 and maintain its leading position for buses over eight tons GVW in its core markets by offering innovative and high-quality new products. Daimler Buses also expects the World Cup soccer championship and the launch of new products in the high-volume school bus segment to lead to an increase in sales in Brazil in 2014. Sales in Europe are expected to remain stable.
“As things stand today, we believe we’ll be able to reach our targets for this year,” says Schick. “We’re satisfied with the current level of incoming orders, and we already know that our plants will be working to full capacity until the middle of the year. That applies to the production of urban buses as well as touring coaches. This is remarkable, if only because of the fact that in our sector the first half-year is traditionally slow because of the way the markets work.”
Daimler Buses also expects the restructuring of its used vehicle operations under the new BusStore brand to generate additional growth. BusStore has created a Europe-wide bus-focused network for marketing used vehicles. Daimler Buses is thus strengthening its used bus business, and from this point on the division will offer its customers a large selection of used vehicles from Mercedes-Benz and Setra — as well as all other common brands — from a single source.
Cornerstone laid for bus manufacturing plant in India
Daimler Buses has begun taking the next steps of its strategy for the promising Indian market. In order to effectively exploit opportunities in India, the division is building a new bus manufacturing facility in Chennai. The cornerstone of the plant was laid at the beginning of March 2014. The facility will initially have a manufacturing capacity of 1,500 units per year but can be expanded to produce up to 4,000 units annually. Daimler Buses is investing approximately €50 million in the project.
The plant’s range of products will include BharatBenz front-engine buses tailored to the specific needs of the high-volume bus market in India. The models will be built with a specially developed body from Wrightbus, which has its headquarters in Ireland. A Wrightbus production facility will therefore be constructed at the plant site. The Chennai plant will also manufacture Mercedes-Benz rear-engine buses for the premium segment.
India is the world’s second-largest sales market for buses after China. Despite a difficult market environment in India, sales of buses over eight tons GVW totaled nearly 40,000 units in 2013 — almost twice as many buses as were sold throughout all of Western Europe. In view of the projected population growth for the country, experts believe the demand for mobility solutions will continue to increase in India.

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