Annual Report 2017

Automotive markets

Global demand for cars continued to develop favorably in 2017, with the worldwide market volume increasing for the eighth consecutive year. While the previous high market volume led to slower growth compared with the previous year, the increase of more than 2 % was nevertheless impressive. Once again, the growth of the world market was primarily due to contributions from the Chinese and Western European markets, while sales in the United States decreased slightly. Key emerging markets were able to overcome their weaknesses and developed in a much more positive manner during the year under review. (See graphic B.06)

Daimler AR2017 B.06 Global automotive markets

Once again, the Chinese market made the biggest contribution to the growth of the world market, although growth was significantly lower than in previous years due to the very high market volume in 2016. A substantial number of advance purchases were made towards the end of the year because state tax incentives for purchasers of cars with small engines ended in January 2018, as had been previously announced, but market growth for the full year was just over 3 %.

Car demand in Europe was slightly higher than in the previous year. Following the recovery of recent years, the Western European car market has now reached a solid level and was able to record slight growth in 2017. Most of the Western European core markets grew once again; only the UK car market suffered a decrease (of approximately 6 %) after reaching a record volume in 2016. Sales in Germany were up by nearly 3 % from the prior year. The overall market situation in Eastern Europe improved considerably. This was largely due to developments in the Russian market, which posted a significant increase of approximately 12 % after recording substantial contraction over the previous four years.

The US market volume for cars and light trucks decreased by almost 2 % and thus did not quite reach the record volume of the prior year. Nevertheless, at just over 17 million units, market demand remains at an unusually high level. Whereas sales of SUVs and pickups increased once again, demand for traditional sedans was relatively weak by comparison. The Japanese market displayed a solid performance, with market volume increasing by about 6 %. Sales in India were significantly higher than in the prior year. A recovery trend was observed in Brazil, where the market expanded by just over 9 %.

During the year under review, worldwide demand for medium- and heavy-duty trucks gradually recovered from its previous weak phase, and experienced an upswing as 2017 progressed. It should be pointed out, however, that overall demand in the full year in markets relevant to our operations was only slightly above the prior-year level.

The pace of recovery on the North American market picked up in the second half of the year. However, as demand in the first half of the year was significantly lower than in the same period of 2016, the full-year market volume in weight classes 6-8 was only slightly higher (+1 %) than in the previous year. Sales in the heavy-duty Class 8 segment were at about the same level as in 2016.

Demand in the EU30 region (European Union, Switzerland and Norway) approximately maintained the solid market volume of the previous year. Sales in Western Europe rose somewhat, while markets in the EU states of Central and Eastern Europe contracted slightly overall. Demand for trucks in Brazil stabilized following the slight improvement of overall economic conditions in the country. No significant recovery occurred in Brazil, however, so the market volume therefore only slightly surpassed the very low level of the prior year. Following the severe market slump in Turkey in 2016, demand improved during 2017, but also here, the market was only slightly larger than the weak volume of the previous year. The Russian market underwent a strong recovery and expanded at a significantly double-digit rate.

Developments in Daimler’s most important Asian markets were varied. The Japanese market for light-, medium- and heavy-duty trucks was slightly larger than the solid volume of the prior year (+1 %). In India, on the other hand, demand for medium- and heavy-duty trucks fell by about 10 %. Here, the introduction of new regulatory and tax measures during the year led to uncertainty and weak demand that could not be offset in the final months of 2017. Truck sales in China once again rose sharply, largely due to the favorable economic situation and regulatory measures that led many truck operators to replace many older vehicles.

Demand for vans continued to develop positively in the EU30 region in 2017. Market volume for mid-size and large vans increased by 9 %, while demand for small vans rose by 3 %. In Germany as well, sales in the combined segment for mid-size and large vans increased by 8 %. Demand for large vans in the US was slightly below the prior year’s level. Demand in the segment of the van market that we serve in China also decreased slightly. The market for large vans in Latin America recovered strongly from the low level of the previous year.

Market volume for buses in the EU30 region was at the high level of the previous year. The market recovery in Latin America (excluding Mexico) led to a significant improvement in the bus segment, especially in Brazil, where market volume increased by 10 % after bottoming out in 2016. As a result of the ongoing difficult situation in Turkey, domestic demand in that country once again decreased significantly compared with the prior year.

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