Annual Report 2017

Daimler Trucks

Our Daimler Trucks division achieved significant growth in both unit sales and earnings in 2017. In all that we do, our focus is on our customers. In order to offer them our best products and solutions, we work continuously on innovations. Our focus is on trucks that are efficient and electric, safe, automated and connected. In order to best meet the needs of our customers in the various regions, we are further expanding our presence in our core markets and in new markets. Using global platforms, our engineers worldwide develop outstanding technologies and utilize economies of scale and the advantage of speed. Our corporate culture is the foundation for the implementation of our strategy: Across national borders and departmental boundaries, we at Daimler Trucks collaborate entrepreneurially, internationally and openly.

Positive business development with only moderate market dynamism

Daimler Trucks significantly increased its unit sales to the number of 470,700 vehicles in 2017 (2016: 415,100). Revenue of €35.7 billion was also significantly higher than in the previous year (2016: €33.2 billion). Overall, Daimler Trucks had little tailwind from its relevant markets last year, but nonetheless significantly increased its EBIT to €2.4 billion (2016: €1.9 billion). We have taken an important step with the ongoing optimization of fixed costs, especially at the Mercedes-Benz brand, in order to bring Daimler Trucks up to the targeted level of profitability in the coming years. Together with the cost optimizations previously planned, some of which have already been implemented, we aim to achieve improvements for Daimler Trucks with a direct impact on earnings in an amount of €1.4 billion by the end of 2018. Our goal is for these measures to become fully effective in the year 2019.

C.03 Daimler Trucks

  2017 2016 17/16
€ amounts in millions   Change in %
       
Revenue 35,707 33,187 +8
EBIT 2,380 1,948 +22
Return on sales (in %) 6.7 5.9 .
Investment in property, plant, and equipment 1,028 1,243 -17
Research and development expenditure 1,322 1,265 +5
thereof capitalized 45 57 -21
Production 476,325 411,265 +16
Unit sales 470,705 415,108 +13
Employees (December 31) 79,483 78,642 +1

C.04 Unit sales of Daimler Trucks

  2017 2016 17/16
In thousands   Change in %
       
Total 471 415 +13
EU30 82 80 +3
thereof Germany 32 31 +1
United Kingdom 9 8 +12
France 8 8 +2
NAFTA region 165 146 +13
thereof United States 140 122 +15
Latin America (excluding Mexico) 31 27 +11
thereof Brazil 13 12 +11
Asia 149 125 +18
thereof Japan 45 46 -3
Indonesia 43 28 +53
For information purposes:      
BFDA (Auman Trucks) 112 78 +44
Total (including BFDA) 583 493 +18

Unit sales significantly higher than in the previous year

Our total unit sales of 470,700 vehicles were 13 % higher than the prior-year number of trucks sold. In the EU30 region (European Union, Switzerland and Norway), we sold 82,300 vehicles in 2017, which is slightly above the prior-year level (2016: 79,800). Our Mercedes-Benz brand maintained its market leadership in the medium- and heavy-duty segment with a share of 21.0 % (2016: 20.7 %). Sales of 31,700 units in Germany were in the magnitude of the prior-year level (2016: 31,500). In Turkey, we achieved significant sales growth after the weak development of the previous year and sold 11,800 units (2016: 9,300). The local Daimler company had its 50th anniversary in the summer of 2017. The sales organization for Turkey, the local product development department for trucks and buses, and the plants in Aksaray (trucks) and Hoşdere (buses) are organized under the roof of Mercedes-Benz Türk. The sales development was positive also in Russia, where we more than tripled our sales to 8,000 units (2016: 2,300).

Our sales of 30,500 trucks in Latin America were above the low level of the previous year (2016: 27,500). There was a significant contribution from the positive sales development in Argentina, where 5,600 units were sold (2016: 3,900). In Brazil, the region’s main market, we increased our sales significantly to 13,400 vehicles (2016: 12,100). With our trucks of the Mercedes-Benz brand, we achieved a share of 27.6 % in the medium- and heavy-duty segment (2016: 29.8 %). In the next five years, we will invest approximately €600 million in Brazil in the modernization of the product lineup, in digital services and in the two plants in São Bernardo do Campo and Juiz de Fora. Both those plants are to meet the highest production standards by 2022, making them even more competitive.

The positive development of unit sales in the NAFTA region made a major contribution to our growth, especially in the second half of the year. We were able to significantly increase our sales to 165,000 units (2016: 145,700). We further increased our market share in weight classes 6-8 to 39.8 % (2016: 39.3 %) and in heavy-duty class 8 we once again achieved a market share of 40.0 % (2016: 40.0 %). In classes 6-8, we continued to be the undisputed market leader. The new Freightliner Cascadia has been in production since the beginning of 2017 and is equipped with our integrated powertrain. Approximately 95 % of our heavy-duty engines in our trucks in the United States and Canada meanwhile stem from our own engine platform. We were able to increase the proportion of Freightliner Cascadia and Western Star 5700 XE trucks with the DT12 automated trans­mission to approximately 75 % in the United States and Canada. Local production of the medium-duty DD8 engine started in Detroit in late 2017, marking a further milestone of our platform strategy. Production of the DD5 engine will follow in 2018.

We increased our truck sales in Asia by 18 % to 148,600 units. In Japan, our sales of 44,800 trucks were slightly below the prior-year level (2016: 46,400). Our FUSO brand achieved a 19.6 % share of the overall Japanese truck market (2016: 20.4 %). The new heavy-duty Super Great truck underscores our ambition to further expand our position in the Japanese market and sets new standards for efficiency, safety and connectivity. The new FUSO flagship, like the latest heavy-duty trucks from Freightliner and Mercedes-Benz, utilizes components from our global platform strategy such as the common powertrain and standardized electric/electronics architecture. In Indonesia, our sales of 42,700 units were significantly higher than in the previous year (2016: 28,000). The first Mercedes-­Benz truck drove off the assembly line at our Indonesian assembly plant in Wanaherang. Daimler Trucks will produce heavy-­duty Mercedes-Benz trucks for the Indonesian market there, so we will be present in Indonesia with the two brands FUSO and Mercedes-Benz in the future. In the Middle East, our sales of 23,600 trucks last year were significantly higher than the low prior-year volume (2016: 17,600).

In India, the first half of the year was affected by weaker demand in connection with regulatory and tax changes. Although the Indian truck market contracted compared with the previous year, we were able to significantly increase our unit sales to 16,700 BharatBenz trucks in the fifth year since the brand was launched and our market share grew to 9.1 % (2016: 13,100 and 6.8 %). This development was aided by, among other things, the new emission standard Bharat Stage IV, which our BharatBenz truck already fulfilled before it was introduced in April 2017. Meanwhile, more than 60,000 BharatBenz trucks are on the roads in India and a further 14,000 trucks have been exported from there to more than 40 other markets in Asia, Latin America and Africa.

Presence in important growth regions

In China, the world’s biggest truck market, Daimler AG has a 50 % stake in Beijing Foton Daimler Automotive Co. Ltd. (BFDA), a joint venture with Beiqi Foton Motor Co. Ltd. Medium- and heavy-duty trucks of the Auman brand have been produced there since 2012. Along with the significant market recovery in China, sales of 112,400 Auman trucks were significantly higher than in the previous year (2016: 77,800). More than 460,000 Auman trucks have been sold since the joint venture was established. In Iran, Mercedes-Benz Trucks signed a framework agreement on a joint venture with the Iran Khodro Industrial Group in 2017. This creates a basis for future sales and aftersales activities for Mercedes-Benz trucks in Iran. In addition, Daimler Trucks signed a supply agreement for the FUSO brand with Mayan, a company of the Mammut Group. The supply of FUSO trucks to customers in Iran started in 2017.

Electrification has top priority

Mercedes-Benz presented a fully electric heavy-duty truck for distribution transport already in 2016. Last year, we launched the new Japanese product brand, E-FUSO, a separate brand for electric trucks and buses. It is planned to have an additional electric version of each FUSO truck and bus model in the coming years. With the presentation of the new fully electric E-FUSO Vision One heavy-duty truck for inner-city and regional distribution transport, we are underscoring our claim to be a pioneer in the field of electric commercial vehicles. The Vision One has a battery capacity of 300 kWh and a range of up to 350 kilometers.

E-FUSO | World Premiere

We intend to launch the series-produced version of the heavy-duty distribution trucks from FUSO in mature markets in four years. (See Case) In New York last September, we handed over the FUSO eCanter to customers including United Parcels Services (UPS). According to our market knowledge, this is the world’s first fully electric light-duty truck from series production. In Europe and Japan, other leading logistics providers were among the first customers of the small-series production. They will use the fully electric light-duty truck for various tasks in urban delivery transport. In the coming years, we plan to deliver 500 trucks of this generation to selected customers. Large-scale series production will probably begin in 2019. The ­development of the vehicle benefited from extensive experience gained from several customer test phases in Portugal and Germany. Production of the eCanter models for Europe and the United States started in Tramagal, Portugal in July 2017. The trucks for Japan are produced in Kawasaki, where the first rapid-charging station for electric trucks in the Japanese market has been in operation since May. Thomas Built Buses, a subsidiary of Daimler Trucks North America, presented a fully electric school bus in September, which is to go into production in 2019. The 160 kWh battery should allow a range of up to 160 kilometers and the range can be extended with additional battery modules if required. With the development of the Saf-T-Liner C2 electric bus, Thomas Built Buses profited significantly from the ­electric-drive expertise within the Daimler Group.

Saf-T-Liner® C2 Jouley School Bus - Thomas Built Buses

In parallel with its activities on the vehicle side, Daimler Trucks invested last year in the Israeli company StoreDot Ltd. and agreed with it on a strategic partnership. StoreDot is a pioneer for nanotechnology materials and is one of the leading companies for electric-charging systems and energy-storage materials. The main area of cooperation is the rapid charging of batteries to provide customers with better vehicle utilization.

Truck platooning on public highways in the United States

In the past financial year, Daimler Trucks was the first truck manufacturer to test digitally connected trucks on public highways in the United States. This so-called platooning makes use of co­nnectivity and partially automated driving to reduce the gaps between trucks on the road, and can result in better fuel efficiency, easier work for the drivers and enhanced safety. Tests with three Mercedes-­Benz Actros trucks driving in partially automated mode and connected had previously been carried out in Germany in 2016. Daimler Trucks North America (DTNA) linked two Freightliner New ­Cascadia trucks with the use of Wi-Fi-based V2V communication in connection with driver-assistance systems featured in the new Cascadia under the product name Detroit Assurance 4.0. They include Adaptive Cruise Control, Lane Departure Assist and Active Brake Assist 4. DTNA is thus responding to growing customer interest in solutions for automated and connected driving in trucks. Together with fleet customers in the United States, DTNA is examining the impact of platooning solutions on fleet operations.

The trucks were previously tested on the new DTNA test grounds in the desert of Oregon. This new facility with an area of over 35 hectares allows our vehicles to be tested for the NAFTA region under difficult climatic conditions. Test drives of automated vehicles are also to be carried out there.

Connected Mercedes-Benz Arocs trucks in driverless test operation

Daimler Trucks continues to work on reducing the burden on drivers by means of automated driving in normal road traffic, while enhancing safety on highways and freeways. In parallel, Daimler Trucks is also testing driverless vehicles in closed-off areas. This offers further potential, for example to significantly increase customers’ productivity. Fitted with a Remote Truck Interface (RTI), which in the technological context will be developed for automated driving, four Mercedes-Benz Arocs trucks demonstrated a new dimension of snow removal on an airfield. Using the RTI, all vehicles are fully connected with telematics systems and can either lead or follow in a convoy. Vehicle functions can be controlled remotely and thus allow the truck convoy to be driven from outside the driver’s cab. Following vehicles in the convoy can therefore be used to clear snow in driverless mode. The project was initiated in close collaboration between the Daimler innovation incubator Lab1886, Daimler Trucks and Fraport AG.

Documentary: Mercedes-Benz Remote Truck Automated Airfield Ground Maintenance.

New connectivity solutions for the logistics sector and truck servicing

The Truck Data Center forms the basis for our truck-related digital services and is installed in vehicles from all Daimler Trucks brands as a key component of the platform strategy. The connectivity module receives truck data, evaluates it and communicates with the infrastructure, other vehicles and other logistics participants. Using linked connectivity solutions from Fleetboard, Detroit Connect and Truckonnect that are tailored to local customers’ needs, logistics companies receive extensive insights and useful analyses for their fleets, as well as access to new digital connectivity services. Big data and technology offer new potential for significantly increasing the profitability of the logistics sector. Using a variety of new apps, it is ­possible to display relevant information such as fleet utilization, vehicle position, cost-savings potential, fuel consumption and driving-style evaluation. And for the optimization of vehicle servicing, Daimler Trucks last year launched a new digital ­service: Mercedes-Benz Uptime. This connects the truck with the Mercedes-Benz service organization and the transport company, thus facilitating significantly better plannability and higher efficiency through maximum vehicle availability. Unplanned repairs can be avoided to a great extent and scheduled workshop visits can be further optimized.

Mercedes-Benz Uptime
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