Sales of vans down slightly due to Sprinter model changeover | DaimlerChrysler Buses confirms
market leadership | EADS: record aircraft deliveries and delays with the A380 | Operating profit of
€913 million (2005: €1,091 million)
The Van, Bus, Other segment comprises the Vans and Buses units, our holding in the European Aeronautic Defence and Space Company (EADS), the Corporate Research department, our real- estate activities and the holding and finance companies. Within the framework of our new management model, we decided that our vans and buses activities, which until 2005 were part of the Commercial Vehicles division, would be directly managed as sep- arate units. In the context of the new management model, we merged the Corporate Research department and the development departments of the Mercedes Car Group; as a result, they are directly allocated to the Mercedes Car Group as of 2007.
Revenues for the Van, Bus, Other segment decreased by 9% to €13.4 billion, reflecting the disposal of our off-highway business.
The segment’s operating profit declined from €1,091 million in 2005 to €913 million in the year under review (see page 45). The earnings figure includes the expenditure of €393 million related to implementation of the new management model. The earnings
Vans
Market share remains stable despite Sprinter model changeover. Unit sales at the Vans unit totaled 256,900 vehicles worldwide in the year under review (2005: 267,200). This slight decrease in sales was due to the Sprinter model changeover and associated production bottlenecks at the Düsseldorf plant. The new Sprinter is now also being produced at the Ludwigsfelde plant. A total of 157,200 Sprinter vans were sold worldwide in 2006. With sales of 59,400 units by the end of the year, the new Sprinter is clearly continuing the success story of its predecessor. Despite the Sprinter model changeover, the Vans unit was able to maintain its 16% market share in the segment for medium and large vans in Western Europe, where it remained the market leader. Unit sales of Vito and Viano vans developed positively in 2006, totaling 94,100 vehicles (2005: 90,900). The introduction of economical and clean diesel engines throughout the year, as well as an expanded range of optional equipment, contributed to this posi- tive result.
New Sprinter boasts a wide range of variants and high safety standards. The new Sprinter features an even broader range of variants than its very successful predecessor. Customers can choose from six engines, three wheelbase lengths, three roof heights and up to four overall vehicle lengths. The range of standard safety equipment has also been expanded. Along with airbags, wide-angle mirrors and improved crash protection, the new Sprinter now includes the Electronic Stability Program (ESP).
These innovative product features were the main reasons why the newspaper “Deutsche Handwerkszeitung” and the magazine “KEP aktuell/trans aktuell” respectively granted the Sprinter the “German Commercial Vehicle Prize 2006/2007” and the title “KEP Van of the Year”.
Expanded market presence in the United States. The Sprinter has been available in the United States under the Dodge and Freightliner brands since 2003. In order to accommodate the increasing demand for the Sprinter in the United States, we 913 13,439 8,542 4,039 447 494 279,228 305,001 256,895 36,192 39,400 % change -16 -9 +5 +4 -50 -14 -5 -3 -4 -0 -23 06/05 1,091 14,835 8,135 3,884 886 577 295,353 315,567 267,245 36,221 51,093 Amounts in millions of € 2005 2006 Operating profit Revenues thereof: Vans Buses Investments in property, plant and equipment Research and development expenditure Production1 Unit sales1 thereof: Vans Buses Employees (Dec. 31)
Buses
Market position maintained. DaimlerChrysler Buses comprises the bus operations of our Mercedes-Benz, Setra and Orion brands. The unit sold 36,200 buses and chassis worldwide in 2006 (2005: 36,200). The Buses unit thus repeated the high level of unit sales it achieved in the prior year and maintained its position as the global market leader. In Europe, we sold 8,700 vehicles in a growing market (+4%), once again achieving a market share of 22%. Unit sales in Latin America rose by 14% to 17,100 vehicles; with a market share of 48% in this region we are the market leader (2005: 49%). In the NAFTA region, we sold 6,300 buses and chassis in the year under review, fewer than in the prior year in line with the overall market development (2005: 6,700).
Safety and assistance systems enhance customer utility.
Along with leadership in technology, the high comfort and safety standards of our products have played a decisive role in helping us maintain our competitiveness in the bus sector. At the IAA Com- mercial Vehicles Show 2006 in Hanover, we unveiled the “short” Mercedes-Benz Citaro K (length: 10.5 meters), the Mercedes-Benz Tourismo high-deck travel coach and the new MultiClass 400 low-floor intercity bus. All of these buses are equipped with pio- neering safety systems as standard, including the Electronic Brake System (EBS) and the Electronic Stability Program (ESP). Also avail- able are additional driver-assistance systems such as Proximity Cruise Control and the Lane Assistant. The Mercedes-Benz Citaro Low Entry intercity bus was named “Bus of the Year 2007” in the category of public transport buses. In the markets of Latin America, the DaimlerChrysler Buses unit presented the 18-meter O 500 chassis – a trend-setting articulated chassis with high passenger capacity.
Leader in alternative drives. DaimlerChrysler Buses’ leadership in technology is also underscored by the unit’s pioneering role in developing alternative drive systems. Examples include the drive systems used in the fuel-cell powered Mercedes-Benz Citaro city buses and in the hybrid buses built by Orion for the North American market. Here, with some 1,500 units sold, we are the market leader worldwide.
EADS
Record deliveries and challenges in the year under review.
While the helicopter, defense and space businesses continued to develop positively in 2006 and Airbus delivered more aircraft than ever before, the year was also impacted by delays in the A380 program. The company will publish its results for the 2006 financial year on March 9, 2007.
During the first nine months of 2006, revenues at EADS as defined by the International Financial Reporting Standards (IFRS) rose to €27.5 billion from the €23.4 billion recorded during the same period of 2005. Operating profit amounted to €1.4 billion (first nine months of 2005: €2.1 billion). This decline was due to delays in the A380 program and the weakness of the US dollar against the euro.
Market success overshadowed by delays in the A380 program.
Airbus delivered a record 434 aircraft in 2006 (2005: 378). Following record order intake in 2005, Airbus posted the second- highest level of incoming orders in its history in the year under review, receiving new firm orders for 790 aircraft (2005: 1,055). This is evidence of the ongoing strong demand for civil aircraft. As of December 31, 2006, Airbus had an order backlog of 2,533 civil aircraft (2005: 2,177).
The timetable for the delivery of A380 aircraft was altered in Oc- tober 2006. This development will place a substantial financial burden on EADS in the period through 2010. According to the new schedule, deliveries to first customers of the A380, which re- ceived its Type Certification on December 12, 2006, will begin in October 2007. To regain its competitive strength, Airbus launched the “Power 8” efficiency-improving program with the goal of reduc- ing costs by at least €2.0 billion each year beginning in 2010.
Green light for the A350 XWB. In December 2006, the EADS Board of Directors approved the start of the program for the new A350 XWB long-range airliner. The program targets a market whose volume is expected to total approximately 5,700 new aircraft over the next two decades.
The Mercedes-Benz Safety Coach- the safest travel coach in the world - combines all of the existing safety systems. The
Sprinteralso has the best safety package in its class.