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DaimlerChrysler Truck Group Seeks Further Profitability Increases


September 2006
 Filed under: DAIMLERCHRYSLER CORPORATE Car News | DAIMLERCHRYSLER CORPORATE Headlines

* Dr. Dieter Zetsche, Chairman of the Board of DaimlerChrysler and Head of Mercedes Car Group: Our commercial vehicles business has become a stable profit pillar for DaimlerChrysler
* Andreas Renschler, Management Board Member Truck Group & Buses: We will continue to increase return on net assets and profitability of the Truck Group in 2006
* World premieres at the International Commercial Vehicle Show IAA: Unimog U 20, City Bus Citaro K, Motor Coach Tourismo, Setra MultiClass

Stuttgart/Hanover , Sep 19, 2006 -- At 257,900 units, DaimlerChrysler Truck Group sales in the first half of 2006 were slightly behind 2005 sales of 263,600 units over the same period. In contrast, Truck Group revenue climbed from 14.9 billion Euros to 15.9 billion Euros. Operating profit in the first half of 2006 was below the previous year by 12 %, due to the 276 million Euros in Fuso compensation payments by Mitsubishi Motors Corporation in the first quarter of 2005. However, the improved model mix and the efficiency measures instituted through the Global Excellence Program contributed to a significant increase in earnings in the second quarter of 2006 (+34 % over the same period in the previous year). DaimlerChrysler Buses and Mercedes-Benz Vans are also showing positive results with their new products and highly competitive earnings.
Mercedes-Benz truck sales in Europe/Latin America were down by 8 % in the first half of 2006, at 66,600 vehicles. Unit sales increases in Western Europe and particularly in Germany were offset by the sales drop in the Asian region. Truck sales in the NAFTA region grew by +2 % reaching a total of 103,700 Freightliner, Sterling, Western Star and Thomas Built Buses vehicles. At 88,400 units, Mitsubishi Fuso sales were nearly on par with the previous year’s level (-1 %). Optimization programs in all areas are helping the Truck Group to further improve its competitive position in 2006.

Dr. Dieter Zetsche, Chairman of the Board of DaimlerChrysler AG and Head of Mercedes Car Group, said in a speech at the IAA International Auto Show for Commercial Vehicles in Hanover: We are not only the largest manufacturer of commercial vehicles in the world – the commercial vehicles business has also become a stable profit pillar for DaimlerChrysler in recent years.

DaimlerChrysler holds a world market share of more than 20 % for trucks over six tonnes. In Europe, Mercedes-Benz trucks are Number 1 in this segment. In the NAFTA region DaimlerChrysler is the heavy truck market leader with its Freightliner, Western Star and Sterling brands. In Japan, Mitsubishi Fuso has moved up to second place, which is a clear sign that Fuso is successfully winning back customer loyalty in its home market.

According to Andreas Renschler, Management Board Member of DaimlerChrysler AG responsible for the Truck Group & Buses, the Truck Group will continue to grow its return on assets and its profitability this year. We are seeing the first successes of the Global Excellence Program in all Truck Group operating units. Renschler continued: In 2007, our objective is to achieve our minimum hurdle rate during a period of slow growth for the first time. Our long term objective is to raise our average profitability to a very competitive level.

According to Renschler, the Truck Group plans to utilize common truck parts, components, and entire modules for the different brands in its development of future product generations. We want to achieve cost savings for the short and long term through the use of significant synergies from our worldwide modular strategy. This includes the future use of only three engine families worldwide, instead of the current eight, the use of common axles and transmissions, and the continued use of many common parts such as standardized steering wheels.

Andreas Renschler: We have already realized 300 million Euros in cost savings through commonalities. However, variations in emission regulations worldwide and expensive local adaptations will partly off-set the overall cost savings.

The main focus of DaimlerChrysler’s IAA presentation is on ground-breaking advances in safety technology and expertise, environmental compatibility and economic efficiency. The event also marks the world premiere of several new commercial vehicles.

DaimlerChrysler successfully presented the Mercedes-Benz Safety Truck with the new emergency brake system Active Brake Assist in a recent road show through 12 European metropolitan cities. The safety vehicle fleet is supplemented by a Mercedes-Benz Sprinter as a safety van and a Mercedes-Benz Travego as safety coach.

The efficiency of the available active safety systems was demonstrated in a large-scale test in cooperation with major insurance companies. The one thousand safety fleet trucks traveled over 100 million test kilometers as part of this test. In the case of the 500 vehicles equipped with the current Mercedes-Benz safety package, accident frequency was reduced by 50 %. When an accident did occur, resulting damage was reduced by 90 %.

Next to safety, the development of environmentally friendly and emission-free technologies is in the forefront of current activities. Andreas Renschler said, We know that environmental protection only works if it is also economical and cost efficient for the long term. These are the main criteria for the transportation industry. Through the combination of Blue-Tec Technology and the new power-shift transmission Mercedes-Benz trucks can save up to 6 % in fuel consumption com-pared to the Euro 3 version. Renschler continued, With the out-standing performance of the 33,000 Blue-Tec trucks sold thus far, we have demonstrated that we are betting on the right solution for the future. In future, the DaimlerChrysler Truck Group will intensify its focus on sales and aftersales activities designed to meet the changing needs of its customers. Therefore the Truck Group has launched the Truck Dedication campaign in Europe.

Andreas Renschler: In future we want to dedicate our efforts even more strongly to meeting the needs of our truck customers. This includes moving our locations in close proximity to our customers, not far from the highways. Truck customers need 24-hour service, particularly on Sundays, when most trucks are idle. Renschler continued: In addition, we will pursue a more pronounced separation in sales and service activities for passenger cars and trucks in order to better sat-isfy both customer groups.

The subject of customer and driver comfort and convenience is also a focal issue at the Mercedes-Benz booth at the IAA. This year Mercedes-Benz is showing the Actros SpaceMax concept truck. The spotlight is on the driver’s cab, which can be alternately used as office, living room or bedroom in response to the drivers’ needs. The Space-Max is based on the Actros 1860 LS with Blue-Tec 5 and power-shift transmission.

Mercedes-Benz Trucks is proud to present the world premiere of the four-wheel drive Unimog U20, which can be seen for the first time at the IAA. This special vehicle supplements the current Unimog product line by adding a third model series with 7.5 t – 8.5 t total admissible weight.

The Japanese subsidiary of DaimlerChrysler, Mitsubishi Fuso Truck and Bus Corporation, is an exhibitor at the IAA with the Mitsubishi Fuso Canter and a cross section model of the Canter Eco Hybrid drive, which was recently introduced in Tokyo as the cleanest light truck in the world. Mitsubishi Fuso is the DaimlerChrysler Competence Center for light trucks and hybrid technology for the entire Truck Group. Quality issues from the period before DaimlerChrysler’s involvement have been addressed, and the company has again moved into second place in the current registration statistics. What we are concentrating on now is the continued integration of Fuso into the Truck Group in Ja-pan, explained Andreas Renschler.

With a world market share of 17 % DaimlerChrysler Buses is the world’s largest manufacturer of buses and coaches with an admissible total weight over eight tonnes. The unit has consistently expanded its market position in recent years. As key factors Renschler cited the outstanding products, global presence, and close working relationship with the Truck Group. Globalization also means ‘betting on Germany’ as a manufacturing location, which is a rare occurrence in the bus sector, Renschler said.

DaimlerChrysler’s bus business posted positive results in 2006. According to Andreas Renschler, We are significantly above the internal minimum hurdle rate and have achieved our benchmark with respect to global market share as well as profitability.

DaimlerChrysler Buses is presenting the 10.8 m long city bus Mercedes-Benz Citaro K at the IAA. This is where the high-decker motor coach Mercedes-Benz Tourismo and the new Minibus variants based on the new Mercedes-Benz Sprinter can be viewed for the first time.

The low-entry overland bus Mercedes-Benz Citaro LE Ü, which was launched in early 2006, was chosen as 2007 Bus of the Year. The international jury of bus and coach editors from around Europe has thus awarded the new low-entry vehicle with the highest distinction for buses and coaches in Europe. With approximately 15,000 buses sold thus far, the Citaro model series is one of the most successful city buses ever produced.

The Setra brand is exhibiting its current product offerings at the IAA International Auto Show for Commercial Vehicles in 2006. The highlights are the world premiere of the new low-floor overland buses Multi-Class 400 and the compact Setra S 412 UL. The Setra S 416 HDH Luxury Edition from the Top-Class model series is the ultimate in luxury. All Setra buses and coaches shown at the IAA International Auto Show for Commercial Vehicles in 2006 are equipped with Blue-Tec diesel technology and conform to EU Euro 4 exhaust guidelines.

The Vans business unit, now reporting directly to Dieter Zetsche, is showing the new generation of its flagship, the Mercedes-Benz Sprinter at the IAA. After eleven years and 1.3 million units sold, we have launched a new Sprinter this year. We are very optimistic that it will also take the top position in the European market, said Dieter Zetsche. The new Sprinter has already been selected as Van of the Year 2006 by the ETM publishing house, and is winner of the German Commercial Vehicles Award (Deutscher Nutzfahrzeugpreis) from publisher Holzmann Verlag.

With its Sprinter, Vito/ Viano and Vario models the vans business unit has been the unquestioned market leader in the Western European mid-size and large van segment. In early 2007, the new Sprinter will also be introduced in the USA, where it will once again be available for sale under the Dodge and Freightliner brands. At the end of this year production will start in the new re-assembly plant in Charleston South Carolina. Since its market introduction in North America in 2001, the Sprinter has enjoyed continuously increasing sales. In 2005, more than 28,000 Sprinters were sold in the NAFTA region. With the expanded capacity in the new Charleston plant, the vans business unit is in good position to respond to increasing demand.

In Latin America as well the vans are benefiting from a growing market. In the first quarter of next year we will start production of the new Sprinter model in our plant near Buenos Aires, Argentina. Because of its great popularity, the Sprinter’s predecessor will continued to be produced for the local market.


©1998-2006 DaimlerChrysler

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