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Vans division of Daimler AG: Mercedes-Benz Vans Successfully Concludes Business Year 2013 and Forges Ahead with Its Global Growth Strategy
- Earnings increase by 16% in 2013, to €631 million
- Sales increase at double-digit rates in China, Latin America, and Russia
- Vans division invested around €600 million in facilities, products, and sales in 2013
- Almost the entire product range updated
- In 2014 Mercedes-Benz Vans aims to substantially increase sales and keep EBIT at last year’s level
- Volker Mornhinweg: “We achieved a very good result in 2013 and continue to remain the most profitable van manufacturer.”
Mercedes-Benz Vans successfully concluded business year 2013, with sales, revenues, and earnings surpassing the previous year’s results. Even though developments on the world’s markets varied widely last year, Daimler AG’s vans division increased sales by 7% to over 270,000 vehicles (2012: 252,400). Revenues rose by 3% in 2013, to €9.37 billion (2012: €9.07 billion). EBIT jumped by 16% to €631 million (2012: €543 million). In 2014 Mercedes-Benz Vans aims to substantially increase sales and keep EBIT at last year’s level.
“We achieved a very good result in 2013. We managed to increase sales, even though our core market of Western Europe was weaker on the whole,” says Volker Mornhinweg, Head of Mercedes-Benz Vans. “At the same time, we achieved double-digit growth rates in China, Latin America, and Eastern Europe. Moreover, our return on sales of 6.7% continues to make us the most profitable van manufacturer.”
With its Sprinter, Vito, Vario, and Citan models as well as with the Viano in its last year of sales, the vans division successfully countered the difficult market environment in Western Europe, increasing sales there by 3% to 169,200 vehicles. At more than 71,500 vehicles, sales remained stable in Germany, the largest and most important market for star-brand vans. The development was especially favorable in the division’s second-most important market, the United Kingdom, where the sales figure of 31,000 units was around 20% higher than in the previous year. Daimler’s vans division was also successful in Eastern Europe, where sales rose by 12% to 26,000 units. With a market share of 17.4%, Mercedes-Benz Vans was once again the leader for medium-size and large vans in Europe, its most important sales market.
In Latin America, the division benefited from the high demand for large vans, which caused sales of the Mercedes-Benz Sprinter to rise by 40% to 19,600 units. The division was particularly successful in the large markets of Argentina and Brazil, where it increased its market share by 5.8 percentage points to 23.1%. These successes enabled Mercedes-Benz Vans to extend its lead in this region even more.
Mercedes-Benz Vans was once again successful in the U.S., which has become its third-most important sales market. The division sold 22,800 vehicles there in full-year 2013, representing an increase of 6% on the prior year. In the U.S., the division has successfully pursued a two-brand strategy, which allows customers to buy the Sprinter as either a Mercedes-Benz or Freightliner-branded vehicle.
In 2013 Mercedes-Benz Vans was also very successful on the Chinese market, where sales rose by 44% to 12,700 units. As a result, China is now the fifth-largest sales market for star-brand vans.
Good growth prospects for the vans business
Mercedes-Benz Vans expects demand to stabilize in Europe this year. However, market developments will probably vary greatly from country to country. The market for large vans is expected to grow substantially in the U.S. The division also expects demand to continue to rise in China. However, exchange rate developments in countries such as Turkey and Argentina will have a major effect on economic growth in these markets.
In view of this situation, Mercedes-Benz Vans expects its very young and attractive product range to lead to a substantial sales increase this year. The introduction of the Citan has turned the vans division into a full-line provider that will be able to exploit additional growth potential. Sales in the city van segment are expected to rise accordingly. Mercedes-Benz Vans also expects sales of medium-size and large vans to increase substantially in Europe. New models will give demand an additional boost in this segment. In addition, the division plans to continue to grow in China and the Americas.
On the right track with global growth strategy
The vans division’s future success will depend on the “Mercedes-Benz Vans goes global” strategy. This global strategy not only aims to exploit new growth potential in the European core markets and elsewhere, but to expand existing activities and further extend the division’s lead in technology.
“We achieved a lot last year and consistently forged ahead with our ‘Mercedes-Benz Vans goes global’ growth strategy,” says Volker Mornhinweg. “Through our production and sales operations, we are now more active than ever before in the key growth regions — the United States, Latin America, China, and Russia. At the same time, we are using our almost completely revised product range to exploit growth opportunities in our established markets. As a full-line provider, we offer our customers every imaginable van business configuration, from the Citan urban delivery vehicle to the Sprinter large van.”
In the spring of 2013, Daimler’s vans division achieved an important milestone in China when it officially opened the new research and development center of the Chinese vans joint venture Fujian Benz Automotive Corporation in Fuzhou. It is the first research and development center of the Vans division outside of Germany and includes a test track, test rigs, and a facility for making prototypes. Around €60 million were invested in the new center, which focuses on developing models that are produced and sold locally in China: the Sprinter, the Vito, and the Viano.
Mercedes-Benz has also taken an important step forward in Russia. Since the second half of 2013, Mercedes-Benz Vans has been cooperating with Russia’s largest van manufacturer, GAZ, to produce the Sprinter Classic in the country. The vehicle is being sold on the Russian market through the Mercedes-Benz sales organization. The partnership has also been expanded to include the joint production of engines at the GAZ facility in Yaroslavl. The plant manufactures Mercedes-Benz OM646 four-cylinder diesel engines that are subsequently installed in the Sprinter Classic.
Mercedes-Benz Vans launches comprehensive product offensive: Citan, Sprinter, and V-Class
Mercedes-Benz Vans’ comprehensive product offensive played a crucial role in making 2013 a success. For example, the Mercedes-Benz Citan really took off in its first full year of production. More than 20,000 units of the Mercedes city van were sold last year, enabling the Citan to immediately take a 3% share of its market segment in Western Europe. In Germany, it even captured 6% of the market.
In 2013 the Mercedes-Benz Sprinter began a new chapter in its success story, with the launch of the global vehicle’s new model. After more than eight million kilometers of tests and an investment of €300 million, series production of the new vehicle began in July 2013 at the two German production facilities in Düsseldorf and Ludwigsfelde. Five new assistance systems will help the new Sprinter reduce the number of accidents even further. Making their world debut with the new Sprinter were the standard-fitted Crosswind Assist, the optional proximity warning assistant, and Blind Spot Assist.
The Sprinter is sold in more than 130 countries worldwide. In addition to Germany, the vehicle is manufactured in Argentina, the U.S., China, and Russia. In this way, production is increasingly taking place in the global sales markets. In 2013 Mercedes-Benz Vans sold more than 166,000 Sprinters worldwide, representing an increase of 5% over the prior year.
The most important milestone in the Mercedes-Benz Vans growth strategy is currently being set by the Mercedes among MPVs: the new Mercedes-Benz V-Class. With this vehicle, Mercedes-Benz Vans is completely redefining the MPV segment. The new V-Class is now available for sale after having celebrated its world premiere in January 2014 and started production at the Mercedes-Benz plant in Vitoria, Spain, in early March. The market launch will begin in Germany at the end of May and in the rest of Europe in June.
“The new V-Class boasts many new features that are without parallel in this segment. They allow us to target completely new customer groups. We particularly want to gain customers who have previously preferred to buy a traditional car even though they would actually like to have the space provided by an MPV,” says Mornhinweg.
The new V-Class focuses on three customer groups, in particular: families with two or more children, people who are very active in their leisure time and have lots of sports and outdoor equipment, and operators of luxury VIP or hotel shuttle buses. Daimler AG invested extensively in the Mercedes-Benz plant in Vitoria, Spain, to prepare the facility for the production of the new vehicle. The investment of around €190 million primarily covered the modernization and reorganization of the plant’s body shop, paint shop, and assembly units. The site’s logistics were also optimized.
The new Mercedes-Benz Vito model will also roll off the production line in Vitoria this year. This vehicle will also fully meet the needs of its commercial customers.