Increases in unit sales, revenues and operating profit. In 2006, the Truck Group built on the very successful developments of the prior year, increasing unit sales by 1% to a new record of 537,000 vehicles. The higher sales volume and an improved model mix caused revenues to rise by 5% to €32.0 billion. We continued to consistently implement the worldwide Global Excellence opti- mization program in the year under review. The measures under- taken in this regard had a positive impact on earnings. Operating profit of €2.0 billion surpassed the high prior-year result by 26% (see page 44).
Ongoing high unit sales by Trucks Europe/Latin America.
The Trucks Europe/Latin America business unit offers medium- duty and heavy-duty trucks under the Mercedes-Benz brand name for long-distance haulage, delivery and construction appli- cations. While the Actros is designed exclusively for heavy-duty applications, the Axor and Atego models cover the segment for both heavy-duty and medium-duty trucks. The product range is rounded off by the Econic and Unimog special-purpose vehicles.
Trucks Europe/Latin America increased its unit sales in the core market of Western Europe by 3% to 76,000 vehicles in 2006. Sales developed particularly well in Germany, totaling 37,400 units, an increase of 4%. Despite the market downturn in Brazil and lower sales in the Middle East, total unit sales of 142,100 vehicles were only slightly below the prior year’s high level. With market shares of 40% in Germany (2005: 42%) and 22% in Western Europe (2005: 22%), the Mercedes-Benz brand was the leader in the segment for medium-duty and heavy-duty trucks in those markets. In Latin America, the unit sales of Trucks Europe/Latin America decreased by 5% to 29,900. In Brazil, the Mercedes-Benz brand was the market leader, achieving a market share of 32% (2005: 31%).
The outstanding business development at Trucks Europe/Latin America in 2006 was largely due to the market success enjoyed by our innovative products. In the year under review, we sold 24,900 trucks equipped with the environmentally friendly BLUETEC tech- nology, which is now available in all model series.
In the summer of 2006, as part of a roadshow through 12 major European cities, we presented the Mercedes-Benz Safety Truck, which combines all of the currently available assistance and safety systems, including Active Brake Assist (emergency braking support), Lane Assistant, Adaptive Cruise Control, and Stability Program. The utility and effectiveness of these systems were demonstrated in a major series of tests with 1,000 trucks that clocked up more than 100 million test kilometers. The Mercedes- Benz “Safety Package” reduced the frequency of accidents by 50%, and in those cases where an accident was unavoidable, the resulting monetary damage was 90% lower on average than the damage figure associated with a similar accident involving a truck without the safety systems. Insurance companies are reward- ing the utilization of safety technologies by granting lower premiums for liability and collision policies.
% change +26 +5 -6 +8 -2 +1 -1 06/05 Amounts in millions of € 2005 2006
At the 2006 IAA Commercial Vehicles Show in Hanover in Sep- tember, we presented another new product – the new Mercedes- Benz Unimog U20. The U20, which has a shortened wheelbase and a gross vehicle weight of 7.5 to 8.5 metric tons, completes our range of special-purpose vehicles.
In 2006, to ensure that it is ideally prepared to face future challenges, the Truck Group began to build a Development and Testing Center in the vicinity of the Wörth truck assembly plant. The new 500,000-square-meter facility, which is scheduled for com- pletion in 2007, will include a test track for truck development and quality assurance activities. Due to the short distances be- tween the various working environments, cooperation between development and production units will improve and powerful syn- ergy effects will be generated. In addition, the new Development and Testing Center will help safeguard competitiveness.
Renewed increase in unit sales in the NAFTA region.With its Freightliner brand, the Truck Group is the leading manufacturer of trucks for long-haulage in North America. Freightliner also produces delivery trucks and commercial vehicles for the services sector. Sterling, on the other hand, focuses on delivery trucks and vehicles for construction industry applications, while the Western Star brand covers the segment for premium heavy-duty trucks in North America. School bus business activities are conducted by our Thomas Built Buses brand, which accounts for more than one out of every three school buses registered in the United States and Canada.
Operating in a very positive market environment, the Trucks NAFTA unit increased unit sales by 3% in 2006 to the record level of 208,300 vehicles. A particularly large increase was recorded in the segment for Class 8 heavy-duty trucks, with this positive de- velopment resulting primarily from vehicle purchases brought forward due to the more stringent EPA07 emission limits that came into effect on January 1, 2007. Sales also rose in the seg- ment for Classes 5-7 medium-duty trucks.
Market share in the NAFTA region declined in both the Class 8 segment (33%; 2005: 36%) and in the Classes 5-7 segment (21%; 2005: 23%). This development was largely due to capacity bottle- necks. In fact, at some plants the orders already matched the maxi- mum production capacity as early as the summer of 2006. Despite this decrease in market share, our brands maintained their market leadership in the NAFTA Region’s Class 8 segment in the year under review.
The Sterling 360, a light-duty truck based on the Mitsubishi Fuso Canter, has been available in the NAFTA region since the begin- ning of 2006. This vehicle, which is equipped with a 4.9-liter diesel engine and a six-speed automatic transmission, is perfect for the wholesale sector, construction and light delivery applications. The rapid development and market launch of the Sterling 360 was made possible in particular by close cooperation within the Truck Group, and this effective partnership offers an example of the synergy potential available in the global development and production network. A total of 440 Sterling 360 models were sold in North America in 2006.
At the Great American Truck Show in Dallas (Texas) in August 2006, we presented a hybrid-drive prototype truck under the Freight- liner brand name for the first time. The Business Class M2 106 is a full-parallel hybrid that can run either on a 44 kW electric motor or a 170 kW diesel engine. The two drive systems can also be operated in combination to achieve maximum output. In addition, the vehicle recovers braking energy, which it converts into electricity that can be used to power the electric motor. Tests show that the vehicle consumes much less fuel than a truck equipped with a conventional diesel drive. The Truck Group will
Representing the Truck Group’s high- quality and comprehensive product portfolio: the Mercedes-Benz Actros,
the Freightliner Coronadoand the
Mitsubishi Fuso Canter Eco Hybrid
Mitsubishi Fuso regains customers’ trust.Trucks Asia – with its Mitsubishi Fuso brand – is the second-largest manufacturer of light, medium and heavy-duty trucks in Japan. Mitsubishi Fuso also produces all types of buses, ranging from urban transport buses to luxury travel coaches.
Trucks Asia sold 186,600 vehicles in 2006, a significant increase (+4%) on the prior year. The unit performed particularly well in our core market of Japan, where sales rose by 20% to 71,100 vehicles, primarily due to regained trust among customers and advance purchasing in connection with the introduction of new emission standards in the country. Market share in Japan in- creased from 23% to 25% in the year under review. Sales outside Japan decreased by 4% to 115,500 units in 2006, largely due to the market slump in Indonesia, which is Trucks Asia’s biggest export market.
In the summer of 2006, Trucks Asia presented the Mitsubishi Fuso Canter Eco Hybrid, the world’s cleanest light-duty truck. The vehicle has been available in Japan since July 2006, and its launch in other markets is being considered. The Eco Hybrid’s pay-load of up to 3.0 metric tons makes it ideal for various local delivery applications. Its biggest advantage lies in the fact that it con- sumes around 20 percent less fuel than a conventionally powered truck of its size, with the biggest fuel savings achieved in stop- and-go traffic and delivery operations. Mitsubishi Fuso is respon- sible for the Truck Group’s Hybrid Technology Competence Center, and thus makes a major contribution to safeguarding the division’s technological leadership.
Many Global Excellence program measures implemented.
The Global Excellence program was launched in 2005 in order to ensure the Truck Group’s long-term profitability and strengthen the division’s competitiveness. The program is based on four strate- gic initiatives. The “Optimizing the Business Model” initiative is geared toward reducing the division’s susceptibility to cyclical fluc- tuations and ensuring that it remains profitable even in years when commercial vehicle markets are sluggish. A further goal here is to achieve the highest possible level of flexibility in produc- tion. To this end, we reached an agreement with the Works Coun- cil to expand operations at the Wörth plant; this is the division’s largest plant and was operating at extremely high output levels in 2006. The agreement calls for extending existing shifts and intro- ducing shifts on Saturdays. Flexibility will also be significantly enhanced through working-time accounts that enable the division to scale back or increase production in line with cyclical fluctuations.
“Operational Excellence” is the second initiative and focuses on implementing measures to increase efficiency at all Truck Group units. Such measures include reducing material costs and fixed costs and harmonizing processes throughout the Group in order to create and utilize economies of scale across all truck brands. For example, we will use only three rather than the current eight engine families in our trucks in the future. We will also increase the level of shared components in the areas of axles and trans- missions.
The primary focus of the third initiative, “Growth in Global Com- mercial Vehicle Markets”, is on intensifying activities in markets with very high growth potential. Accordingly, the Truck Group is currently examining possibilities for entering certain emerging mar- kets, with a particular focus on China and India.
The new Mercedes-Benz Unimog U20:
enormous mobility with permanent all-wheel drive and power take-off for all kinds of equipment guarantee maximum flexibility and performance.
537 106 60 8 11 5 188 164 40 22 144 71
The fourth initiative, “Future Product Generations”, concerns the development of future products and innovative technologies. The goal of this initiative is to consolidate and expand the division’s innovation leadership through the introduction of new technologies and products. Among the most important measures to be under- taken as part of this initiative are the further development of the global modular strategy, exhaust-gas and safety technologies, and alternative drive systems. DaimlerChrysler is the first manu- facturer to equip its entire range of trucks in Europe with engines that meet the Euro 4 emission standards. In some cases, these vehicles already fulfill the even more stringent Euro 5 emission standards, which will not go into effect until 2009.
Strengthening the global development and production net- work.Coinciding with Group-wide implementation of the new man- agement model, the Truck Group launched a modified orga- nizational structure on August 1, 2006. The division now consists of three operating units: Trucks Europe/Latin America, Trucks NAFTA, and Trucks Asia, each of which is responsible for produc- tion and sales operations in its respective region. In order to more extensively exploit synergies as early as the product creation phase – and to allow the enhanced harmonization of parts and components – the former Truck Product Creation unit was split into two powerful units: Truck Product Engineering, which is respon- sible for the three vehicle development centers in Stuttgart, Port- land and Kawasaki as well as the integrated development of large components, and Truck Powertrain Operations & Manufac- turing Engineering, which oversees component production and production planning for vehicle and component plants.
“Truck Dedication” initiative places the focus on the customer.
One of our aims at the Truck Group is to maintain close relations with our customers throughout the entire vehicle lifecycle. To this end, we launched the “Truck Dedication” initiative in the late summer of 2006 with the objective of aligning our sales and service activities more closely with the needs of customers. Key ele- ments of the initiative include establishing a stronger presence close to our customers – for example, by opening additional service centers near highways and logistics centers and guaran- teeing that our service teams are available round the clock.
+1 +4 +4 -19 +8 +10 +3 +3 +1 -5 -8 +20
Truck Group unit sales in 20061
1,000 06/05
units %
The Mercedes-Benz Actros Space-Max
shown at Germany’s International Truck Show in 2006 features generous space and a luxurious interior.
Total Western Europe thereof: Germany United Kingdom France Italy NAFTA
thereof: United States Latin America (excluding Mexico) thereof: Brazil
Asia thereof: Japan
1,468 15,439 48,152 117,724 45 11,129 1,714 17,154 52,981 113,297 29 10,718 Operating profit Revenues New business Contract volume
Investments in property, plant and equipment
Employees (Dec. 31)