EBIT of more than €900 million expected for 2010 from ongoing business
Contract volume in China doubled to about €1 billion since beginning of the year
Preparations for market launch in India
Restructuring of German locations will safeguard long-term competitiveness
Stuttgart — Daimler Financial Services AG is achieving strong gains again after an economically difficult year 2009. After posting a profit of €607 million in the first three quarters of 2010 (2009: €13 million), this Daimler Group division expects an EBIT from ongoing business for whole-year 2010 of more than €900 million. This would be one of the best results achieved by the division through the financial services it provides for Mercedes-Benz passenger cars, smart, and Daimler commercial vehicles.
"We've emerged from the financial and economic crisis stronger than before, and we are benefiting from the decrease in risk-related costs and favorable interest margins. We are also on a growth path with our new business and contract volume," said Klaus Entenmann, Chairman of the Board of Management of Daimler Financial Services. Supported by the increase in the Group's vehicle sales, the volume of new business at DFS at the end of the third quarter of 2010 was €21.3 billion — a 16 percent increase over the same period of 2009. Contract volume rose by 4 percent to €61.1 billion.
Rapid growth in China, market launch planned in India
Daimler Financial Services sees great growth potential primarily in future markets such as China and India. In China, the contract volume rose by 93 percent to €916 million in the first nine months of the year. By the end of 2010 it is expected to top the billion-euro threshold. Financial services are playing an increasingly important role in vehicle purchases in growth markets such as China. "We expect to see continued rapid growth in China, and we also appreciate the fact that Chinese customers are very reliable when it comes to making payments," says Entenmann.
In India, Daimler Financial Services is preparing for its market launch. Starting in the second half of 2011, DFS will offer financing, insurance, and fleet management for Mercedes-Benz passenger vehicles in India. Financial services for commercial vehicles will follow in 2012. The necessary licenses have already been applied for. India is one of the world's largest growth markets for the automotive industry.
Restructuring in Germany
In order to more effectively coordinate DFS' operations in over 40 countries throughout the world with the management of the Daimler vehicle divisions, Daimler Financial Services will move its headquar¬ters from Berlin to Stuttgart in 2012. There it will be co-located in the same building with the headquarters of Mercedes-Benz Bank.
The business operations of Mercedes-Benz Bank in Germany will also be consolidated in the future. These activities will be concentrated in three locations by the end of 2012, as opposed to the current nine. In addition to Stuttgart and the existing service center in Saarbrücken for the private customers and direct banking business, there will be a new service center for corporate customers in Berlin. The re-organization will safeguard a leading competitive position for the company over the long term.
Outlook on 2011
Klaus Entenmann is looking ahead at the coming business year with optimism. "We expect 2011 to be another very successful year for Daimler Financial Services," he says. "We are also expecting growth in our new business worldwide and in our contract volume."