Business development


Moderate upswing of world economy

Although the world economy continued its upward trend in the third quarter, its rate of growth still seems to have been rather low. This was primarily due to the weak economic development of the European Monetary Union. Meanwhile, the political uncertainty caused by the tension between Russia and Ukraine is having a sustained dampening effect on business confidence, investment and exports. In particular, the major European economies such as Germany, France and Italy are therefore likely to have developed only very moderately in the third quarter. But also in some of the larger emerging countries, total economic output in the third quarter is likely to have been well below expectations, in Brazil, South Africa and Russia for example. Against this backdrop, the growth of the world economy is mainly driven by the Anglo-Saxon economies, above all the United States and the United Kingdom. The Asian economies also developed positively, benefiting from solid economic growth in China as well as improving prospects in India and Indonesia. Despite the general tendency of increased geopolitical risks, the oil price decreased from its peak in July of approximately US $20 per barrel, which in turn further reduced inflation rates. In view of the ongoing danger of deflation and the weak economy, the European Central Bank therefore decided on lower interest rates as well as further expansive measures. In this context, the euro came under increasing pressure against the US dollar and weakened during the third quarter by 10 cents or 8%.

Worldwide demand for cars in the third quarter was stronger than in the prior-year period, but the growth dynamism weakened somewhat. Global growth was once again primarily driven by the two largest sales markets, China and the United States. In China, the stable upward trend continued with growth of nearly 10%. The US market continued its dynamic development and expanded by almost 8% compared with the third quarter of last year. The Western European market continued its moderate recovery with growth of just over 4%, but the individual countries performed very differently once again. The boom of the British market continued unabated with expansion of approximately 6%. The German market showed moderate growth, while demand in France did not improve from the weak prior-year level. In the Japanese market, the negative impact of the increase in value-added tax this April was still apparent and the number of cars sold was about 5% lower than in the third quarter of 2013. Apart from China, demand in the major emerging markets differed widely. The Indian market continued to stabilize and posted significant growth again for the first time since late 2012. But demand in Russia slumped by about a quarter due to the Ukraine crisis and the related economic weakness.

With the exception of the NAFTA region and Japan, demand for medium- and heavy-duty trucks in the major markets continued to be impacted by difficult economic conditions. The European market was still suffering from the negative market effects of the new Euro VI emission limits as well as sluggish economic developments and contracted significantly compared with the prior-year period. However, the increase in value-added tax in Japan had only a temporary impact on demand for light-, medium- and heavy-duty trucks. The Japanese market continued its growth trend in the third quarter and was significantly larger than in the prior-year period. The development of demand in North America was also favorable. Thanks to the region’s positive economic development, the market for trucks in weight classes 6-8 expanded by a double-digit rate. Demand for medium- and heavy-duty trucks in Brazil remained weak, however. That market was affected by the unfavorable economic outlook and political uncertainty and contracted by a double-digit rate compared with the third quarter of 2013. Increasing signs of market stabilization were apparent in India, however. For the first time in almost three years, the Indian market expanded again compared with the prior-year quarter. But there are still no signs of an end to the weakness of demand in Russia. According to recent estimates, that market seems to have contracted by a significant double-digit rate. Little dynamism was to be observed in China, the world’s biggest truck market, where demand was significantly lower than in the third quarter of last year.

Demand for medium-sized and large vans in Europe increased slightly compared with the third quarter of 2013, whereas the market for small vans decreased slightly. The North American van market continued its strong growth. The market for vans in Latin America contracted significantly due to the general economic situation there.

In the third quarter of 2014, the bus market in Western Europe expanded slightly compared with the prior-year period. Demand decreased overall in Eastern Europe, however, because of the significantly reduced volume in Turkey. Due to the difficult economic situation in Brazil and Argentina, the Latin American market was also smaller than in the third quarter of 2013.

Significant growth in third-quarter unit sales
In the third quarter of this year, the Daimler Group sold 637,400 cars and commercial vehicles worldwide, surpassing the prior-year total by 7%.

Unit sales by Mercedes-Benz Cars increased by 9% to 431,000 vehicles in the third quarter of 2014. This means that the period under review was the quarter with the highest unit sales in the company’s history. Mercedes-Benz Cars sold 94,100 units in Western Europe (excluding Germany), which is 15% more than in the prior-year period. The main growth driver in this region was the United Kingdom (+18%). In Germany, the division sold 66,200 vehicles of the Mercedes-Benz and smart brands (Q3 2013: 69,900). Mercedes-Benz Cars set a new record in the United States, the division’s biggest export market, with sales of 84,100 units in the third quarter (+5%). In China, we continued along our growth path and increased our unit sales to the new record of 76,200 vehicles (+18%). In Japan, we were able to resist the general market weakness and increased our unit sales by 15%. The development of unit sales by Mercedes-Benz Cars was particularly positive also in South Korea (+40%) and the Middle East (+28%).

Daimler Trucks achieved sales of 125,600 units in the third quarter, which is slightly more than in the prior-year period (Q3 2013: 124,500). The development of demand and unit sales differed greatly in the various regions, however. In Western Europe, sales of 14,800 vehicles were 11% lower than in the third quarter of last year. This was primarily due to purchases being brought forward last year because of the new emission regulations that came into force in 2014. Sales of trucks in Latin America have been decreasing since the beginning of this year. Our third-quarter sales there fell significantly by 23% to 12,500 units, with a reduction of 17% in Brazil. At the same time, with our Mercedes-Benz trucks in the medium- and heavy-duty segment, we succeeded in expanding our market share in Western Europe from 24.3% to 24.7% and in Brazil from 24.5% to 27.1%. On the other hand, the division achieved strong growth of 25% to 43,900 units in the NAFTA region, where we once again clearly defended our market leadership in weight classes 6-8. In Asia, the number of 38,600 trucks sold was 6% lower than in the prior-year quarter. This was mainly the result of the sharp drop in demand in Indonesia. Our unit sales in Japan and India developed positively, however.

Mercedes-Benz Vans increased its third-quarter unit sales by 11% to 72,200 units. After its very successful market launch, the new V-Class boosted unit sales in the segment of multipurpose vehicles. The Sprinter also continued its market success. In the core region of Western Europe, Mercedes-Benz Vans once again achieved double-digit growth in unit sales with an increase of 19% to 47,100 vehicles. Sales of 7,000 units in Eastern Europe were slightly below the prior-year level (Q3 2013: 7,200). The division continued along its successful path in the United States, where sales in the third quarter increased by 18% to 6,500 units. The market environment in Latin America remained difficult, however. We sold 3,600 vehicles in this region, which is substantially lower than the volume of the prior-year quarter (-31%). Sales decreased also in China: by 7% to 3,200 units.

The new Sprinter

Daimler Buses’ worldwide unit sales of 8,600 buses and bus chassis in the third quarter were significantly lower than the number of 9,600 units sold in the same period of last year. The decrease in unit sales primarily reflects the weaker business with bus chassis in Latin America. However, the business with complete buses in Western Europe grew once again compared with the prior-year period; sales in this region rose to 1,900 units (+9%). In Latin America (excluding Mexico), sales of 4,700 bus chassis in the reporting period were significantly lower than in the prior-year period, as expected (Q3 2013: 5,800). The difficult economic situation in Argentina, Brazil and other countries in the region had a negative impact on the development of our sales.

At Daimler Financial Services, new business of €12.4 billion was 20% above the volume of the third quarter of last year. Contract volume reached €93.7 billion at the end of September and was thus 12% higher than at the end of 2013. Adjusted for exchange-rate effects, there was an increase of 7%. The insurance business continued to develop very positively.

The Daimler Group’s third-quarter revenue amounted to €33.1 billion, which is 10% higher than in the third quarter of last year. Adjusted for exchange-rate effects, revenue grew by 11%.

Strong demand for automobiles in combination with a favorable model-mix at Mercedes-Benz Cars led to revenue rising at a higher rate than unit sales, namely by 13% to €18.7 billion. Primarily due to its successful unit sales in the NAFTA region, Daimler Trucks increased its revenue by 6% to €8.5 billion. The Mercedes-Benz Vans division achieved revenue growth of 12%, whereas Daimler Buses’ revenue decreased by 8% as a result of the weaker business in Latin America. In regional terms, the Group’s revenue increased significantly in the NAFTA region and in Asia, while the difficult economic situation in Latin America resulted in lower revenue there.


Unit sales by division
  Q3 2014 Q3 2013 % change
Daimler Group 637,423 594,874 +7
Mercedes-Benz Cars 431,041 395,446 +9
Daimler Trucks 125,556 124,465 +1
Mercedes-Benz Vans 72,207 65,314 +11
Daimler Buses 8,619 9,649 -11


Revenue by division
In millions of euros Q3 2014 Q3 2013 % change
Daimler Group 33,122 30,099 +10
Mercedes-Benz Cars 18,677 16,521 +13
Daimler Trucks 8,463 7,982 +6
Mercedes-Benz Vans 2,515 2,253 +12
Daimler Buses 1,034 1,127 -8
Daimler Financial Services 3,998 3,657 +9
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