Annual Report 2017

Business model

Daimler can look back on a tradition covering more than 130 years — a tradition that goes back to Gottlieb Daimler and Carl Benz, the inventors of the automobile, and features pioneering achievements in automotive engineering. Today, the Daimler Group is a globally leading vehicle manufacturer with an unparalleled range of premium automobiles, trucks, vans and buses. Its product portfolio is rounded out by a range of customized financial services and mobility services. Daimler’s goal is to continue playing a leading role in the development of products and services for the future of mobility. The automotive industry is in the process of a fundamental transformation, and we intend to play a major role in promoting and shaping that change. With our strong core business, we are creating the financial foundation for our investments in the future-oriented fields of Connected, Autonomous, Shared & Services (flexible use) and Electric — “CASE” for short. Innovations from the future-oriented CASE fields enable us to safeguard the attractiveness and profitability of our core business.

Daimler AG is the parent company of the Daimler Group, and has its headquarters in Stuttgart (Mercedesstraße 137, 70327 Stuttgart, Germany). The main business of Daimler AG is the development, production and distribution of cars, trucks and vans in Germany and the management of the Daimler Group. The management reports for Daimler AG and for the Daimler Group are combined in this management report.

Daimler AR2017 B.01 Consolidated revenue by division

Thanks to its strong brands, Daimler is active in nearly all the countries of the world. The Group has production facilities in a total of 19 countries and more than 8,500 sales centers all over the world. The global networking of its research and development activities as well as its production facilities and sales organizations gives Daimler considerable competitive advantages internationally, and also offers additional growth opportunities.

In 2017, Daimler increased its revenue by 7 % to €164.3 billion. The Group’s five divisions contributed to this total as follows: Mercedes-Benz Cars 55 %, Daimler Trucks 21 %, Mercedes-Benz Vans 8 %, Daimler Buses 3 % and Daimler Financial Services 13 %. At the end of 2017, Daimler employed a total workforce of more than 289,000 people worldwide.

The products supplied by the Mercedes-Benz Cars division comprise a broad spectrum of premium automobiles of the Mercedes-Benz brand, the Mercedes-AMG high-performance brand and the Mercedes-Maybach luxury brand. These automobiles range from compact models to a highly varied program of off-road vehicles, roadsters, coupes and convertibles, as well as S-Class luxury sedans. The portfolio is rounded out by the Mercedes me brand and the high-quality small cars of the smart brand. In 2016, we introduced the new EQ brand, which consolidates all of our activities related to electric mobility. The most important markets for Mercedes-Benz Cars in 2017 were China with 26 % of unit sales, the United States (14 %), Germany (13 %) and the other European markets (29 %). Within the framework of its growth strategy, the division continuously refines its flexible and efficient production network consisting of more than 30 plants on four continents. At the same time, we are preparing our worldwide production network to meet the requirements of electric mobility. We will manufacture our future electric vehicles of the EQ product and technology brand within the framework of normal series production, on the same assembly lines that are used to produce vehicles with combustion engines. In the future, our sites for the production of electric vehicles will be our plants in Bremen, Sindelfingen and Rastatt, Germany; Tuscaloosa, Alabama; and Hambach, France. We will also manufacture electric vehicles for the Chinese market at Beijing Benz Automotive Co., Ltd. (BBAC) in China. In the future, Mercedes-Benz Cars will thus build electric vehicles at six different locations. In parallel, we will expand our global battery network to five sites on three continents.

As the world’s largest manufacturer of trucks above 6 metric tons gross vehicle weight, Daimler Trucks develops and produces vehicles in a global network under the brands Mercedes-Benz, Freightliner, Western Star, FUSO and BharatBenz. The division’s 26 production facilities are located in the NAFTA region (14), Europe (7), Asia (3) and South America (2). In China, Beijing Foton Daimler Automotive Co., Ltd. (BFDA), a joint venture with our Chinese partner Beiqi Foton Motor Co., Ltd., has been producing trucks under the Auman brand name since 2012. Daimler Trucks’ product range includes light-, medium- and heavy-duty trucks for long-distance, distribution and construction-site haulage, as well as special vehicles that are used mainly in municipal applications. Due to close links in terms of production technology, the division’s product range also includes buses of the Thomas Built Buses and FUSO brands. In the future, Daimler Trucks intends to offer vehicles with locally emission-free electric drive across the entire product portfolio: The product portfolio will be supplemented with the FUSO eCanter for light-duty distribution, fully electric trucks from the Mercedes-Benz brand for heavy-duty distribution, the new product brand E-FUSO and the fully electric school bus from Thomas Built Buses. Daimler Trucks’ most important sales markets in 2017 were the NAFTA region with 35 % of unit sales, Asia with 32 % and the EU30 region (European Union, Switzerland and Norway) with 17 %.

Mercedes-Benz Vans is a global supplier of a complete range of vans and associated services. The division’s product range in the commercial vans segment comprises the Sprinter large van, the Vito mid-size van (marketed as the “Metris” in the United States) and the Mercedes-Benz Citan urban delivery van. The range of Mercedes-Benz vans in the private-customer segment consists of the V-Class full-size MPV and the Marco Polo camper vans and recreational vehicles. With the launch of the Mercedes-Benz X-Class in November 2017, we became the first premium manufacturer to introduce a model series in the very promising segment of mid-size pickups. The Mercedes-Benz Vans division has manufacturing facilities on four continents: in Germany, Spain, the United States, Argentina, China and Russia. The division is active in the Chinese market through a joint venture, Fujian Benz Automotive Co., Ltd. The production of the Citan and the Mercedes-Benz X-Class is part of the strategic alliance with Renault-Nissan. In Russia, the Sprinter Classic is built for Mercedes-Benz Vans by the GAZ and YaMZ companies. The most important markets for vans at present are in the EU 30 region, which accounts for 68 % of unit sales, and the NAFTA region (11 % of unit sales in the year under review).

The Daimler Buses division with its Mercedes-Benz and Setra brands is the undisputed industry leader for buses above 8 metric tons in its most important traditional core markets: the EU30 region, Brazil, Argentina and Mexico. The division’s product range comprises city and inter-city buses, touring coaches and bus chassis. The largest of the division’s 14 production plants are located in Germany, France, Spain, Turkey, Argentina, Brazil, Mexico and, since 2015, in India as well. In 2017, Daimler Buses generated 67 % of its revenue in the EU30 region and 17 % in Latin America (excluding Mexico). Whereas we mainly sell complete buses in Europe, our business in Latin America, Mexico, Africa and Asia focuses on the production and distribution of bus chassis.

The Daimler Financial Services division supports the sales of the Daimler Group’s automotive brands in approximately 40 countries. Its product portfolio primarily consists of customized financing and leasing packages for end customers and dealers. It also includes insurance brokering, fleet management services, investment products and credit cards, as well as various mobility services such as the moovel mobility platform, the mytaxi app and car2go, the world’s leading company for flexible car-sharing services. The total number of users of our mobility services increased to 17.8 million in 2017. During the year under review, Daimler Financial Services financed or leased around 50 % of the vehicles sold by Daimler. The division’s contract volume of €139.9 billion covers more than 4.8 million vehicles. Daimler Financial Services also holds a 45 % interest in the Toll Collect consortium, which operates an electronic road-charging system for trucks on highways in Germany.

Daimler AR2017 B.02 Daimler Group structure 2017

Daimler is also active in the global automotive industry and related sectors through a broad network of subsidiaries, associated companies and joint operations. The statement of investments of Daimler AG in accordance with Section 313 of the German Commercial Code (HGB) can be found in Note 40 of the Notes

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Business model