Mercedes-Benz Cars continued to grow profitably in 2017. Unit sales and revenue increased significantly once again and earnings before interest and taxes reached a record level, despite the considerable advance investment we made in our product offensive and new technologies. Our most important new model in the year under review was the upgraded S-Class. We also continued our dream car initiative with new attractive coupes and convertibles. In addition, we offered a preview of our upcoming electric-mobility offensive and the future of mobility by presenting the EQA and smart vision EQ fortwo concept vehicles at the Frankfurt Motor Show.
The Mercedes-Benz Cars division consists of the Mercedes-Benz brand with the Mercedes-AMG, Mercedes-Maybach and Mercedes me sub-brands, as well as the smart brand and the new EQ brand for electric mobility. The division continued along its path of profitable growth in the year under review, with unit sales increasing by 8 % to the new record level of 2,373,500 vehicles and revenue rising by 6 % to €94.7 billion. (See table C.01) Mercedes-Benz Cars was able to improve its market position in nearly all regions. And despite considerable advance investment in our product offensive and new technologies, we were able to increase EBIT by 13 % to €9.2 billion.
C.01 Mercedes-Benz Cars
|€ amounts in millions||% change|
|Return on sales (in %)||9.7||9.1||.|
|Investment in property, plant and equipment||4,843||4,147||+17|
|Research and development expenditure||6,642||5,671||+17|
|Employees (December 31)||142,666||139,947||+2|
Mercedes-Benz once again posts record unit sales
The Mercedes-Benz brand set a new record once again in 2017, with unit sales increasing by 9 % to 2,238,000 vehicles. (See table C.02) The Mercedes-Benz brand therefore not only grew significantly faster than the global car markets, it was once again the premium brand with the highest unit sales in the automotive industry. The Mercedes-Benz brand is the number one manufacturer in the premium segment in Germany, numerous other core European markets, the United States, Canada, South Korea and Japan. We also significantly improved our position in China once again in the year under review.
C.02 Unit sales Mercedes-Benz Cars
|in thousands||% change|
|thereof United States||338||347||-3|
1 Including the GLA
Mercedes-Benz increased its unit sales in Europe by 5 % to 911,700 vehicles in 2017. Substantial growth was achieved in the volume markets of France (+9 %), Italy (+9 %), Spain (+8 %) and the United Kingdom (+4 %), and we also increased our unit sales in Germany by 2 % to 282,600 vehicles. Mercedes-Benz continued its success in China during the year under review. Unit sales in the country rose by 28 % to 595,200 vehicles, which means we significantly outperformed both the market as a whole and our most important competitors. We also set new records for unit sales in other Asian markets – for example in Thailand (+31 %), India (+14 %), South Korea (+9 %) and Taiwan (+7 %). Total unit sales in the NAFTA region were at the prior-year level: Sales increased significantly in Canada and Mexico but decreased slightly in the United States and the NAFTA market overall.
The growth was primarily driven by our new E-Class. After all model variants became available, sales reached the new record level of 398,200 units (+31 %). Our off-road vehicles were also very successful once again. All in all, sales in the SUV segment increased by 16 % to 823,000 units. Demand for our C-Class models also remained very strong, with sales of these vehicles increasing slightly to 492,700 sedans, wagons, coupes and convertibles in 2017. Unit sales of A-Class and B-Class models did not quite reach the previous year’s high level. Including the CLA and CLA Shooting Brake, a total of 420,200 units were delivered to customers. Unit sales of the S-Class totaled 79,400 sedans, coupes and convertibles. The upgraded S-Class generated additional sales momentum in the second half of the year.
Fit for Leadership 4.0
Since 2012, “Fit for Leadership” has served as the central component of our strategy for shaping the future of Mercedes-Benz Cars. Fit for Leadership utilizes a holistic approach that aims to achieve continuous growth, to establish competitive structures and to improve efficiency on an ongoing basis. The program is being systematically pursued. With the further development of program activities in the context of Fit for Leadership 4.0, we aim to achieve an additional efficiency improvement of €4 billion by the year 2025. This should also help to offset the high advance expenditure in the future for the impending technological transformation and to safeguard the division’s return on sales in the corridor of 8-10 % over the long term.
Leadership 2020 Summit@Daimler (EN)
World premiere of the upgraded S-Class
In April 2017, the upgraded S-Class with numerous innovations had its world premiere at Auto Shanghai. One of the highlights was an all-new and highly efficient engine program featuring a range of new technologies for electrification of the powertrain. In addition, the Intelligent Drive system has taken another step along the road to driverless driving. For example, new and modified features have been added to the DISTRONIC active proximity control system and Active Steering Assist. Forward-looking new technologies such as the integrated starter generator (ISG) with a 48-volt onboard power system and the electric additional compressor also had their world premieres in the new S-Class. The ISG is responsible for hybrid functions such as power boost and energy recovery, and thus enables fuel savings that were previously achieved only by high-voltage hybrid technology. The improved third-generation plug-in-hybrid system is now available in the S-Class for the first time. With a significant increase in battery capacity to 13.3 kWh, the use of state-of-the-art lithium-ion technology and an optimized operating strategy, ranges for all-electric driving of over 50 kilometers (NEDC) can be achieved.
World Premiere of the new S-Class in Shanghai
Dream car initiative continues
The E-Class family was renewed entirely within one year and fully rounded out in 2017 with the addition of a coupe and a convertible model. The new E-Class coupe combines expressive coupe proportions, a clear and sensuous design, and long-distance comfort for four occupants with the beauty and classic virtues of a gran turismo. The new E-Class convertible has been thrilling customers in Europe and the United States since September 2017. At once both hot and cool, the vehicle’s design idiom represents beauty and intelligence. We also unveiled the coupe and convertible models of the updated S-Class in both their series-production and AMG versions at the Frankfurt Motor Show in September 2017. These models benefit from extensive new features that were introduced in the sedan – for example extensively enhanced driver assistance systems, the state-of-the-art widescreen dashboard, a new-generation steering wheel and the holistic ENERGIZING comfort control system. (See Case)
EQ – the brand for electric mobility
In 2016, Mercedes-Benz consolidated all of its activities in the area of electric mobility into a new product and technology brand known as EQ. The new brand was heralded by the near-production Concept EQ in 2016 and the compact Concept EQA presented at the Frankfurt Motor Show in September 2017. The Concept EQA is equipped with an electric motor on both the front and rear axles. It has a total output of more than 200 kW and maximum torque of over 500 Nm. It takes only around five seconds for the electric vehicle to accelerate from 0 to 100 km/h. The basis of the vehicle’s outstanding handling and safety is an electric all-wheel drive system with axle-variable torque distribution and a battery installed deep inside the vehicle floor between the axles. In combination with the intelligent operating strategy from Mercedes-Benz, the Concept EQA is able to achieve a range of up to 400 km, depending on the installed battery capacity.
Concept EQA | 60 Seconds | IAA 2017
Daimler plans to offer more than ten all-electric models in the passenger-car segment alone by 2022 - from the smart to the large SUV. The first battery-electric series-produced model from the EQ brand will be launched in the SUV segment before the end of this decade. It will be followed by a model offensive that will gradually supplement the product range of Mercedes-Benz Cars with purely electric models. The new generation of electric vehicles will be based on an architecture developed especially for battery-electric models, which in every respect shall be scalable and suitable for use in all model series: Wheelbase and track width as well as all other system components, especially the batteries, will be variable thanks to the modular system.
Mercedes-Maybach: perfection blended with exclusivity
Mercedes-Maybach stands for the highest levels of exclusivity and individuality. The luxury brand, which was launched in November 2014, combines the perfection of the Mercedes-Benz S-Class with the exclusivity of a Maybach. The Mercedes-Maybach S 600 Pullman launched in early 2016 (fuel consumption in l/100 km urban: 19.6 / extra-urban: 10.3 / combined: 13.6; CO2 emissions in g/km combined: 314) has a face-to-face seating configuration and is a clear top-of-the-line model. The brand’s first convertible was launched in the spring of 2017 as a limited edition of 300 units. A preview of the form the luxury brand might take in the future is offered by the concept cars Vision Mercedes-Maybach 6 and Vision Mercedes-Maybach 6 Cabriolet - a sensational coupe and a luxurious convertible.
Vision Mercedes-Maybach 6 Cabriolet: Revelation of luxury – Trailer | IAA 2017
Mercedes-AMG: the sports-car and performance brand
The brand claim of “Driving Performance” reflects the two core competencies of Mercedes-AMG: the ability to provide an unparalleled driving experience and the ability to serve as a driving force in the high-performance segment. The Mercedes-AMG sports-car brand enhances the fascination of Mercedes-Benz with nearly 60 models. The brand’s dynamic vehicles especially attract young and sporty customers to the brand with the three-pointed star. Mercedes-AMG models differ greatly from their series-produced cousins in terms of both engineering and appearance, thus strengthening the authenticity and distinctive identity of the Mercedes-AMG brand. The Mercedes-AMG Project ONE concept vehicle marks yet another milestone in the strategic further development of Mercedes AMG as a sports-car and high-performance brand. The two-seat hypercar brings state-of-the-art and efficient Formula 1 hybrid technology from the racetrack to the road in virtually identical form for the first time ever. Together with the four-door AMG GT Concept, the Mercedes-AMG Project ONE offers yet another preview of how AMG will use its high-performance hybrid-drive strategy to define driving performance in the future.
Mercedes-AMG Project ONE. The Future of Driving Performance.
The sports-car and high-performance brand from Mercedes-Benz finished the year of its 50th anniversary with a new record: For the first time, the brand sold significantly more than 100,000 units.
smart: focus on electric mobility
At the Frankfurt Motor Show in September 2017, Daimler announced that the smart brand plans to sell solely smart models with electric drive systems in Europe and North America starting in 2020. The other regions will then follow soon afterwards. The new electric drive models – the smart fortwo, smart fortwo convertible and smart forfour (electricity consumption combined: 13.1–12.9 kWh/100 km; CO2 emissions combined: 0 g/km) combine the agility of a smart with locally emission-free driving at an affordable price – the ideal combination for urban mobility.
With its “smart vision EQ fortwo” concept car, the brand presented its vision of the future of urban mobility at the 2017 Frankfurt Motor Show. This car-sharing concept vehicle, which is of course both electric and fully automated, illustrates the future possibilities for personalized and highly flexible public transport with maximum efficiency. (See Case)
The future of mobility | smart vision EQ fortwo
The range of services offered for the smart brand is being continuously expanded. One example is “smart ready to drop.” This service, which is offered in cooperation with various logistics companies, enables parcels to be delivered to the trunk of a customer’s car and also allows for the pick-up of returns using the same system. “smart ready to share” enables car sharing in closed groups – e.g. within a family, between friends or at small companies – in an extremely user-friendly manner with the help of an app that eliminates the need to hand over keys to the next user.
The smart brand sold a total of 135,500 vehicles in 46 markets worldwide in 2017. The smart was particularly popular in China, which is now its third-biggest sales market after Germany and Italy.
Strengthened partnership in China
Sustainable development with local partners is crucial for continuing our business success in China. The signing of two framework agreements has further strengthened cooperation between Daimler and BAIC Motor in their production joint venture, Beijing Benz Automotive Co., Ltd. (BBAC). Daimler and BAIC Motor are jointly investing in the production of battery-electric vehicles in Beijing and in the construction of a new battery factory that will further pave the way for the launch of vehicles equipped with alternative drive systems. In this way, we are creating the foundation for further sustainable growth and continued success in the future for Daimler in China, which is now by far the world’s biggest automotive market.
With the upgraded Mercedes-Benz S-Class presented at Auto Shanghai in April 2017, we have opened up a new dimension of driving also in China.
All in all, we were able to increase sales of Mercedes-Benz brand vehicles in China to the new record level of 595,200 units, an increase of 28 % from the prior year. More than two thirds of the vehicles we sold in China during the reporting year were manufactured locally at facilities operated by our BBAC joint venture.
Global production network for electric mobility
In the year under review, our manufacturing facilities continued to build vehicles without interruption throughout the summer months in order to meet the ongoing high demand for our models on global markets. Within the framework of its growth strategy, the Mercedes-Benz Cars division is continually further developing its flexible and efficient production network with more than 30 locations on four continents. In 2017, for example, we laid the foundation stone for a new engine plant in Jawor, Poland, and began building a new vehicle manufacturing facility near Moscow in Russia.
At the same time, we are preparing our worldwide production network for the requirements associated with electric mobility. We will manufacture our future electric vehicles from the EQ product and technology brand within the framework of normal series production on the same lines used to produce vehicles with combustion engines.
E-Mobility: Mercedes-Benz is Electrifying the Future
In the future, our production locations for electric vehicles will be our plants in Bremen, Sindelfingen and Rastatt, as well as in Tuscaloosa, Alabama, and Hambach. We will also manufacture electric vehicles for the Chinese market at Beijing Benz Automotive Co., Ltd. (BBAC). Mercedes-Benz Cars will thus build electric vehicles at six locations in the future. At the same time, we will expand our global battery network to five sites on three continents. In the spring of 2017, the foundation stone was laid for a second battery production facility in Kamenz. BBAC will supply the Chinese market with appropriate batteries, and battery production plants will be added to our manufacturing facilities in Untertürkheim (Stuttgart) and Tuscaloosa. With these and other measures, Mercedes-Benz Cars is using new technologies to strengthen its strategic approach to shape the future of mobility.
Comprehensive plan for the future of diesel engines
We are convinced that diesel engines will continue to be an integral part of the drive-system mix, not least due to their low CO2 emissions. The debate surrounding diesel engines is leading to increasing uncertainty among customers, however. For this reason, the Daimler AG Board of Management approved a comprehensive plan for the future of diesel engines in July 2017. The plan calls for a massive expansion of the current voluntary service measures for vehicles in customers’ hands, as well as the rapid market launch of a completely new family of diesel engines.
As early as 2016, Mercedes-Benz began offering diesel vehicles that were able to meet the Real Driving Emissions (RDE) limits that went into effect in the EU in 2017. This achievement was made possible by an all-new modular family of efficient and clean diesel engines. In the future, this modular engine family will be utilized across the entire product range of Mercedes-Benz Cars and also at Mercedes-Benz Vans. The new engines’ exemplary emissions have also been confirmed by measurements conducted at independent institutes.
Best Customer Experience
“Best Customer Experience” (BCE) is a global sales and marketing program at the Mercedes-Benz Cars division. The key drivers of our growth strategy are innovative products and entry into new markets and market segments. The program seeks to more strongly align the division’s sales and marketing organization with changing customer wishes and requirements and in this manner to generate additional growth. Our goal here is to make the Mercedes-Benz brand more attractive to new and also younger target groups while also strengthening the brand loyalty of established customers. Our BCE program thus systematically focuses on customers and their need for personal assistance at every point of contact with the brand, its products and its services. To this end, Mercedes-Benz is using new sales channels and digital portals as innovative interfaces with the brand. Various sales formats, such as those using new digital channels, supplement the services offered at traditional Mercedes-Benz dealerships and showrooms.
An important component of Best Customer Experience is the “Mercedes me” digital ecosystem, which enables personalized interaction with the Mercedes-Benz brand. This makes customer contact with Mercedes-Benz more individualized, convenient and transparent. For example, customers can use Mercedes me to obtain information on and utilize services for mobility, connectivity, customer support, financing and lifestyle. Mercedes me is now used by more than one million satisfied customers in 36 markets. (See Case)
Mercedes me – Anthem
The Mercedes-Benz brand’s “She’s Mercedes” initiative specifically addresses women with the aim of making the brand more appealing to women and increasing the proportion of female customers. Along with community and inspiration platforms, the initiative also offers training for sales staff and seeks to increase the number of women in sales positions. (See Case)
#4TheTeam: success in motorsports
Mercedes-AMG Petronas Motorsport captured both the Drivers’ and the Constructors’ World Championship in the Formula 1 racing series for the fourth consecutive year in 2017. A special aspect of this achievement is that the team was able to defend its titles despite the extensive changes made to Formula 1 regulations. Last year marked the fourth time that Lewis Hamilton has won the Drivers’ Championship. And with the Mercedes-AMG Project ONE show car at the Frankfurt Motor Show, we presented for the first time a car that could bring Formula 1 hybrid technology from the racetrack to the road. Mercedes-AMG Motorsport also recorded six victories and 14 podium finishes in 18 races in the German DTM touring car series. As part of the strategic repositioning of our motorsports activities, we have decided to end our participation in the DTM series after the 2018 season and to participate in Formula E in the future. This will enable us to demonstrate the performance capability of our intelligent battery-electric drive systems in a motorsports setting as well, and it will add an emotional component to the EQ brand. Participation in motorsports is an important factor of success for Daimler – not just in terms of the significant image enhancement and extensive publicity provided by the races, but also with regard to the valuable experience we gain through the use of hybrid technologies and lightweight designs in our motorsports activities.