Annual Report 2017

Research and development

Research and development as key success factors

Research and development have always played a key role at Daimler. Gottlieb Daimler and Carl Benz invented the automobile more than 130 years ago. Today, we are shaping the future of mobility. Our goal is to offer our customers fascinating products and customized solutions for needs-oriented, safe and sustainable mobility. Our technology portfolio and our key areas of expertise are focused on this objective.

The expertise, creativity and motivation of our employees in research and development are key factors behind our vehicles’ market success. At the end of 2017, Daimler employed 24,600 men and women at its research and development units around the world (2016: 24,200). A total of 16,800 of those employees (2016: 16,300) worked at Group Research & Mercedes-Benz Cars Development, 5,300 (2016: 5,600) at Daimler Trucks, 1,300 (2016: 1,200) at Mercedes-Benz Vans and 1,200 (2016: 1,200) at Daimler Buses. Around 5,200 researchers and development engineers (2016: 5,400) worked outside Germany.

Our international research and development network

Our global research and development network comprises 35 locations in 15 countries. Our biggest facilities are in Sindelfingen and Stuttgart-Untertürkheim in Germany. Our most important research facilities in North America are the US R&D headquarters in Sunnyvale, California; in Long Beach, California; in Portland, Oregon; and in Redford, Michigan. Our most important facilities in Asia are in Bangalore, India; the Global Hybrid Center in Kawasaki, Japan; and our research and development center in Beijing. Mercedes-Benz Research & Development India (MBRDI), with headquarters in Bangalore) is Daimler’s largest R&D center outside Germany. Activities at MBRDI focus on digitization, simulations and data science. Mercedes-Benz Research & Development China is also an integral part of the Daimler Group’s research network. Among other things, it plays an important role in understanding Chinese customers’ expectations and local requirements. Along with our internal activities, we also maintain close contacts with external research institutions. For example, we work together with various renowned research institutes around the world and participate in international exchange programs for next-generation scientists. In November 2017, we opened new digital hubs in Tel Aviv and Seattle.

Targeted involvement of the supplier industry

In order to achieve our ambitious goals, we also cooperate very closely with research and development units in the supplier industry. Daimler must be closely intermeshed with supplier companies in order to deal with the rapid pace of technological change in the automotive industry and the need to quickly bring new technologies to market maturity. Such cooperation is all the more important in light of the increasing digitization of processes throughout all stages of the value chain. Strong partners from the supplier industry are also essential for our efforts to develop and offer new concepts for future mobility. As part of our joint research and development work, we aim to ensure that the Group retains the key technological expertise it needs to maintain the uniqueness of our brands and safeguard the future of the automobile in general.

Daimler AR2017 B.36 Research and development expenditure

B.37 Research and development expenditure by division

  2017 2016 17/16
In millions of euros     % change
       
Daimler Group
  thereof capitalized
8,711
2,773
7,572
2,315
+15
+20
Mercedes-Benz Cars
  thereof capitalized
6,642
2,388
5,671
2,008
+17
+19
Daimler Trucks
  thereof capitalized
1,322
45
1,265
57
+5
-21
Mercedes-Benz Vans
  thereof capitalized
565
310
442
238
+28
+30
Daimler Buses
  thereof capitalized
194
30
202
11
-4
+173

Patents ensure freedom of action and safeguard our brands

On January 29, 1886, Carl Benz registered a patent for a “vehicle powered by a gas engine.” Since then, we have refined automobiles with more than 114,000 patents and have launched pioneering innovations. We continued this tradition in 2017 by registering nearly 1,900 new ideas for patents, with an increasing focus on the CASE technologies. These patents are important to the company primarily for two reasons: Firstly, the patents secure Daimler a certain amount of “freedom of action” that enables us to manufacture and sell our products around the world and avoid legal conflicts with third parties. Secondly, they enable “exclusivity,” the goal of which is to establish exclusive positioning of selected Daimler features on the market and thus differentiate ourselves from the competition. In addition to industrial property rights, which safeguard our innovations for future mobility over the long term, the unique visual aspects of our products are protected with more than 7,800 designs registered in 2017 (2016: 9,100). The decrease primarily reflects a review of our intellectual-property strategy. Our portfolio of more than 35,800 trademarks worldwide (2016: 32,800), serves to protect the Mercedes-Benz brand, our new EQ brand for electric mobility and all our other product brands in each relevant market.

€8.7 billion for research and development

We want to continue shaping mobility through our pioneering innovations in the years ahead, while moving ahead with digitization throughout the Group. As announced in our Annual Report 2016, we therefore increased our very high level of investment in research and development by 15 % to €8.7 billion in 2017. Of that amount, €2.8 billion (2016: €2.3 billion) was capitalized as development costs, which amounts to a capitalization rate of 32 % (2016: 31 %). The amortization of capitalized research and development expenditure totaled €1.3 billion during the year under review (2016: €1.3 billion). With a rate of 5.3 % (2016: 4.9 %), research and development expenditure also remained at a high level in comparison with revenue. Research in the year under review focused on new vehicle models, extremely fuel-efficient and environmentally friendly drive systems, new safety technologies, autonomous driving systems and the digital connectivity of our products.

The most important development projects at Mercedes-Benz Cars focused on the successor models of the GLS and GLE off-road vehicles, the new compact class, the EQ electric brand and the new generation of diesel and gasoline engines. We also invested in vehicle connectivity and autonomous driving systems and in the development of additional innovative safety technologies. Mercedes-Benz Cars spent a total of €6.6 billion on research and development in 2017, which once again marked a significant increase from the prior-year figure (€5.7 billion). Daimler Trucks invested €1.3 billion in research and development projects. The division’s most important projects were in the areas of emission standards and fuel efficiency, customized products and technologies for important growth markets, and the successor generations for existing products. R & D expenditure at Mercedes-Benz Vans focused mainly on the new Sprinter generation, the expansion of the portfolio in the form of the new X-Class pickup, and the further development of the Vito and the V-Class. Daimler Buses primarily focused its development activities on new products, the fulfillment of future emissions standards and measures to further reduce fuel consumption. Alternative drive systems, in particular electrification technology, also played a key role in our development activities during the year under review. (See B.36 and table B.37)

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