Daimler Buses’ export strategy paying off, India develops into strong export hub

In 2016, the Daimler Group’s bus division has achieved the best return on sales in the industry of 6.2 percent, which the company says is also slightly above its own target.

Despite the continuation of very disparate markets, Daimler Buses increased its earnings by 28 percent to 258 million euros (2015: €202 million). The division’s earnings were therefore substantially higher than in the previous year. The strong business with complete buses in Western Europe made a significant contribution to this success. With approximately 3,000 buses delivered, the Setra brand posted record unit sales in 2016.

Daimler Buses sold a total of 26,200 buses and bus chassis worldwide in 2016 (2015: 28,100). The bus division successfully defended and in some cases extended its market leadership in its core markets in the segment for buses with a gross vehicle weight of over eight tons. Furthermore, new markets were entered, for example with exports from Brazil and India to Latin America, Africa, Asia and the Middle East.

According to Hartmut Schick, Head of Daimler Buses (pictured below), “We at Daimler Buses are satisfied with our performance in 2016. We have achieved a lot, we are making good use of our strong position and we will invest a further 600 million euros in our bus division by 2018.”

“We will continue our offensive from this position of strength and will continually improve our organisation. To these ends, we are systematically further developing our unique product portfolio and extending our technology leadership: with partially automated driving, with electric mobility and with digital connectivity. We want to offer optimal mobility solutions to our customers all over the world,” continued Schick. “In parallel, we are constantly optimizing our worldwide sales and service organisation as well as our production network.”

Growth drivers: Core markets, entry into new markets, global export strategy
The main driver of the success of Daimler Buses in 2016 was the core market of Europe, where the strong business with complete buses paid off. Daimler Buses increased its unit sales in Europe (European Union, Switzerland and Norway) by about three percent to 8,800 vehicles (2015: 8,600). With a market share of approximately 30 percent, the division continues to be the number one in the European bus business by a clear margin. Sales of 1,700 units by BusStore, the brand for used vehicles in Europe, were at the level of the previous year.

In Germany, sales increased by 10 percent to 3,100 units (2015: 2.800). A key factor here was the ongoing growth of the long-distance bus business. About 25.3 million travelers used this service in 2016. Of that total, 16.6 million were on journeys within Germany (plus 3.8 percent) and 8.7 million were on cross-border journeys (plus 19.2 percent), so the growth in cross-border traveling was far stronger. Experts anticipate moderate growth of the long-distance-bus market also in 2017, which should have a positive impact on Daimler Buses’ business.

As expected, the Brazilian bus market declined again in 2016. With contraction of 34 percent, it reached its lowest point for many years. Despite this difficult environment, Daimler’s bus division increased its market share by nearly 6 percent and is the undisputed market leader with a share of more than 58 percent. Furthermore, Brazil has developed into an important export hub for Daimler Buses. From Brazil alone, a total of more than 6,000 buses were exported to neighboring countries of Latin America such as Argentina, Chile and Peru, but also to the Middle East and North Africa, Asia and Africa. For its global business, Daimler Buses is making intelligent use of favorable exchange-rate effects arising from the weak real in Brazil.

India playing key role
Daimler says India is playing an increasingly important role for Daimler Buses with entry into new markets. For just over a year now, the new plant in Chennai has been supplying customised school buses and complete buses to markets in the Middle East, Africa and Latin America. Approximately 430 units were exported last year. The Daimler India Commercial Vehicles plant in Oragadam, Tamil Nadu, also produces for the local market and about 500 buses were delivered to customers in India in the first full year of production.

The India facility is the only Daimler Trucks plant worldwide to produce trucks, buses and engines with three brands – Mercedes-Benz, BharatBenz and Fuso – under one roof. 

“Our core markets Europe, Brazil, Argentina, Mexico and Turkey play a major part in the success of Daimler Buses. Obviously, we want to maintain our market leadership in those regions and I am very optimistic that we will succeed in doing so also this year,” said Hartmut Schick. “We are working with the same focus to expand our global presence and are looking closely at new markets. We plan to grow above all in emerging markets. We develop tailored solutions for each market while utilising synergies in our worldwide production and sales network.”

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Daimler India Commercial Vehicles crosses export milestone of 5,000 vehicles 

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