Share of vehicle sales involving financing or leasing increases by six percentage points
Number of financed and leased cars grows despite drop in vehicle sales
Deposit volume in direct banking business more than doubles to €12.6 billion; 130,000 new customers gained
Substantial profits despite recession
Mercedes-Benz Bank gained market share last year despite facing a difficult economic situation. The Stuttgart-based automotive bank increased the financing and leasing contracts’ share of Daimler vehicle sales to private and commercial customers by six percentage points to 53 percent. The deposit volume in the direct banking business has more than doubled to €12.6 billion. Mercedes-Benz Bank gained 130,000 new customers, increasing its total number of customers by 12 percent to 1.2 million.
“We overcame the challenges of the most difficult year in our company’s history and made a substantial profit. We gained many new customers and retained our existing ones, thus further improving our competitive position. As a result, we are confident about this year as well,” said Peter Zieringer, CEO of Mercedes-Benz Bank, at a press conference in Stuttgart.
In spite of a decline in vehicle sales, the financial services provider brought almost as many cars and commercial vehicles onto the road with its leasing and financing deals last year as in the record year of 2008. At about 316,000 units, this figure was only three percent lower than in the previous year. The automotive bank even boosted its car business, increasing the number of its leased and financed Mercedes-Benz passenger vehicles by two percent, to about 258,000 units. “We successfully supported the automobile retailers and showed that we know how to support sales effectively,” said Zieringer. “Our business model has therefore proven to be robust even in difficult times.”
Mercedes-Benz Bank was also successful because it offered new all-in-one packages combining a leasing contract and motor insurance, all at a fixed monthly rate. The successful market launch of the new E-Class also had a positive effect, and Mercedes-Benz Bank supported the vehicle launch with a broad range of financing solutions and insurance offers.
Sales of commercial vehicles declined by 28 percent in Germany due to the recession and the associated steep drop in demand for transportation services. In view of this difficult situation, the number of commercial vehicles financed and leased through Mercedes-Benz Bank dropped by 22 percent to 59,000 units. The total volume of new business with passenger cars and commercial vehicles declined by ten percent, to €8.1 billion. As a result, the total contract volume decreased in 2009 by six percent compared to the previous year, to €16.1 billion.
Strategic groundwork for a successful future
The successful expansion of its deposit business to €12.6 billion enabled Mercedes-Benz Bank last year to lay the strategic groundwork for further strengthening its business model. Despite the widespread economic crisis, the automotive bank’s high level of liquidity means that it can buttress Daimler sales by providing affordable loans to Mercedes-Benz dealers and private and commercial customers. This opens up new business opportunities for the company in a time when many other banks are withdrawing from the automobile-related credit business. “Our consistent lending policy is allowing us to now advance into these gaps,” said Zieringer. Customer demand for reliable lenders has risen, “giving us the opportunity to permanently increase our market share without facing higher risks,” said Zieringer.
Besides successfully expanding its deposit business, Mercedes-Benz Bank further strengthened its international activities. Among other things, it established a branch in the UK in 2009 and took over the refinancing of the local dealership business of approximately €500 million. Together with the branch established in Spain in 2008, the branch in the UK opens up new growth opportunities outside of Germany.
Mercedes-Benz Bank is prepared to once again contend with a challenging economic environment in 2010. However, due to its improved competitive situation and good liquidity, the company is optimistic about the coming months. It expects deposit volume in the direct banking business to remain stable this year. Mercedes-Benz Bank will do everything it can to retain its market shares in the leasing and financing business. The bank also aims to offer additional products and services to retain customers for the Mercedes-Benz brand that were won over in 2009. This year, the bank also expects to once again make a big contribution to the earnings of the parent company, Daimler Financial Services, and to further improve its profitability.