Daimler Buses continues to expand leadership role in the bus business in 2016

Daimler Buses continues to expand leadership role in the bus business in 2016
08.
March 2016
Stuttgart
  • 2015 earnings up by nine percent despite difficult • market conditions
  • Return on sales of 5.2 percent is benchmark in the bus business 
  • Daimler Buses maintained its undisputed market leadership in all of its core markets
  • Stable development of sales and increase in EBIT from ongoing business expected -- in a tense market environment
  • New department for mobility solutions and business models for innovative transport systems
  • Hartmut Schick: "Despite the tense situation in Brazil - one of our key markets - we have reached a good result in 2015. In addition to our strong product range and our technological leadership in powertrains and safety, our continuous measures for improving the efficiency of Daimler Buses are also paying off."
Stuttgart – In 2015, Daimler Buses increased its earnings by nine percent to € 214 million (PY € 197 million) despite the massive market decline in Brazil. These earnings include expenses from the restructuring of the Daimler Group’s dealer network as well as income that resulted from the sale of the investment in New MCI Holdings Inc. in the US. Return on sales increased to 5.2% (PY 4.7%). Daimler Buses is thus benchmark in the bus business. Overall, Daimler Buses sold 28,100 buses and chassis (PY 33,200) and thus maintained its undisputed market leadership in its core markets in the segment for buses with a maximum permissible gross laden weight over eight tons. The complete bus business in Western Europe developed particularly well. This enabled the business division to buffer the decline of the Brazilian bus market, which plummeted by 40% last year.
Hartmut Schick, Head of Daimler Buses: "Despite the tense situation in Brazil - one of our key markets - we have reached a good result in 2015. Through the positive development in the revenue-rich business with complete buses and the momentum from the business with intercity buses in Europe, we managed to successfully buffer the revenue decline in the Latin American business."
“In addition to our strong product range and our technological leadership in powertrains and safety, our continuous measures for improving the efficiency of Daimler Buses are also paying off. We will continue to pursue this course on a consistent basis in 2016 as well. To this end, we are also driving forward with our concepts in the area of innovative mobility solutions and are even forming a dedicated new department for Mobility Solutions", Hartmut Schick added. 
Dynamics on the intercity bus market drives sales development in Europe
Daimler Buses managed to increase unit sales in Western Europe by three percent to 7,800 vehicles (PY 7,600). With a market share of 31 percent, the division thus continues to be the undisputed Number One in the bus business. This was due to the strong product substance and excellent sales performance, as well as primarily to the high momentum on the European intercity bus market. Alone in Germany, the passenger numbers increased by 25 percent to 20 million persons last year. For this year, experts expect another increase to 25 million intercity bus passengers. Meanwhile, about 700 intercity buses are in daily use in Germany.
Thanks to their high running performance, the excellent safety level and their low consumption, the buses of Mercedes-Benz and Setra are in high demand among intercity bus operators. With a market share of around 55 percent, Daimler Buses is thus the undisputed market leader in the business with intercity buses in Germany. When it comes to the double-decker buses, as much as 80 percent of intercity buses on German roads carry the Setra logo. Overall, in 2015 Daimler Buses delivered about 250 double-decker buses in Europe. With a view to the easy accessibility, which is legally prescribed since this year, the double-decker bus can score with its larger capacity and very comfortable entryway. The next expansion wave in the industry is already in full swing: Increasingly more providers are expanding their offering by international tours. This also yields additional potential for Daimler Buses.
Increase in operating profit desired in 2016 despite difficult market Situation
In 2016, too, it can be expected that the tense situation on the individual bus markets will continue. In particular for Brazil and Latin America, Daimler Buses again expects a significantly declining market. However, the division again expects a slight increase in the market volume for Western Europe. Overall, Daimler Buses is striving for unit sales at the previous year's Level worldwide.
"It is clear: The framework conditions remain challenging. Primarily in Latin America the market situation will certainly remain difficult for some time to come. However, thanks to our strong product substance and excellent marketing, we want to work against this consistently and hold our sales stable this year as well", said Hartmut Schick.
"For this year, we are confident to reach an operating profit from the ongoing business slightly above the prior-year level. To achieve this, we will be implementing our strategy on a consistent basis. We inspire our customers with innovative vehicles, continue to build up our technological leadership and with our highly motivated team are developing the mobility solutions that will make our customers successful in the future as well."
Daimler Buses continues to expand business in important growth Regions
The expansion of the global presence is an important lever for future growth in the bus division:
"With respect to the growth in new markets, our goal is clear: We want to develop custom-made solutions for each market and create synergies in our global production and sales network in the process", said Hartmut Schick. "We have taken important decisions in recent years, which will be fully realized in 2016. A good example for this is the start of our new production location in India. Here, we have been producing for the local market since mid 2015, and are simultaneously tapping into important growth markets in Asia, Africa and Latin America."
Overall, Daimler Buses has invested € 50 million in the production for the Indian plant in Chennai. There Daimler is producing Mercedes-Benz rearengine buses for the premium segment. Front-engine buses produced under the BharatBenz brand cover the needs of the Indian volume market. India is already the second biggest bus market in the world today. Due to the growing demand for passenger transport, experts are expecting high growth potential. In addition, exports of chassis from India had a successful start in 2015. Almost 300 units were delivered to Egypt, among others.
The division is also setting up a new sales structure in order to fully exhaust the growth potential in the upwardly mobile developing countries: To this end, six new regional centers are supporting sales and service directly at the customers' locations in countries with highly promising growth prospects in Latin America, Africa, Asia and the Middle East. Since October 2015, the Regional Center for commercial vehicles in Dubai is responsible for sales and aftersales in 19 markets in Northern Africa and the Middle East. The activities of the bus division in Iran will also be managed from there in the future. With the end of the sanctions, the country is in great need of modernized passenger transport. In February 2016, the new regional center for East, Central and West Africa was opened in Nairobi, Kenya. From there it services 41 countries with a total of 770 million inhabitants.
The Regional Center for commercial vehicles in Pretoria, South Africa also went to the start in February. In future, sales and service for nine markets in Southern Africa will be managed from Pretoria. The fourth Regional Center was opened in early March. From Singaporte the team will manage the sales and service in 18 markets in Southeast Asia, including Indonesia, Thailand, Malaysia, Singapore, the Philippines and Vietnam.
Daimler Buses creates new unit for innovative mobility solutions and
Services
Daimler Buses intends to further increase its offering of innovative services in the bus business, which offer tangible value added for the customer, in the future as well. The goal is to reduce idle times and maintenance requirements and to further optimize total cost of ownership. With a view to remaining at the top with innovative mobility solutions in the future, in February 2016, Daimler Buses created the new department "Mobility Solutions". The further development of existing business models belongs to the tasks of the new team just as much as the development of completely new concepts for the bus business. The new telematics services are one example of this. Due to the growing connectivity of vehicles, completely new business opportunities are also created for Daimler Buses. With FleetBoard, Daimler has already been offering a system that directly benefits customers for the last 15 years. Already today, intelligent data in real time daily contributes daily to the tapping of efficiency potential. In addition, the Mobility Solutions team is also working on the challenges that arise for passenger transport from trends like the growing urbanization and the electrification of powertrains.
In the area of alternative drives, Daimler Buses is developing even more strongly into a system consultant for cities and bus operators. A special application already enables each customer to assess precisely which powertrain technology can replace a diesel bus in the specific case. In doing this, all relevant parameters are included in the calculation, from the length of the lines to the number of passengers, the charging infrastructure and the size of the battery as well as the standing times. Thus, Daimler Buses is offering the customers a future-proof overall package of vehicles, holistic advice and service for the urban transport of the future.
Bus Rapid Transit – public transport concept under scrutiny
The expertise of Daimler Buses in the area of local public transport can be experienced by passengers of Bus Rapid Transit Systems (BRT) in 35 cities of the world. Daimler Buses professionals have also worked on the construction and operation of the BRT System in the Olympia city of Rio de Janeiro. About 400 Mercedes-Benz buses are in use on a stretch of 100 kilometers. At this time, new lines are under construction for the satellite city of Niterói with around 500,000 inhabitants. The bus connection to Rio will thus be shortened from two hours to only 30 minutes. In the meantime, mega cities like Mexico City and Istanbul are also relying on this intelligent bus system. BRT is becoming increasingly popular in Europe as a significantly less costly alternative to rail-bound systems. This also offers additional growth potential for Daimler Buses since the division not only has the right buses for these systems but also possesses long-standing expertise in the area of urban planning and the required service know-how for the operation of modern BRT systems.
Daimler Buses continuously expands its technology lead further
Daimler Buses will continue to expand its lead in innovation power in the future as well. This applies primarily for the drivetrain – which is a decisive factor, especially with respect to the total cost of ownership. In its Intercity buses and tourist coaches, Daimler Buses is again setting the efficiency benchmark with the latest generation of the OM471 diesel engine. In the tourist coaches of Setra and in the Mercedes-Benz Travego, this engine and other vehicle measures achieve a reduction in fuel costs by around four percent with simultaneously greater robustness and performance. For a driving distance of 100,000 kilometers and fuel consumption of about 24 liters of diesel per 100 kilometers, each touring coach equipped with the new generation of engines saves about 1,000 of liters fuel and reduces CO2 emissions by 2.5 tons year after year.
Another example of the technological leadership of Daimler Buses is the natural gas variant of the Citaro. With the newly developed gas engine M 936, the Citaro NGT is benchmark in this segment. Compared to the predecessor model, the Citaro NGT is more efficient by as much as 20 percent. In addition, with bio natural gas it also drives with a neutral effect on CO2. This is also a convincing argument for Stadtwerke Augsburg GmbH: Last week the public bus operator took over 12 Citaro NGT. The total order is for 53 articulated and 15 single vehicles.
As an alternative to the further optimized drivetrain with a combustion engine, the next steps on the road to the future are the battery-electric Citaro E-CELL and the hydrogen-driven Citaro F-CELL. They are based on a joint E-Mobility platform. On this basis, Daimler Buses will bring both powertrain concepts to production standard and on the roads by 2018. In the development of these technologies, Daimler Buses benefits strongly from its affiliation in the group because the vehicle divisions are also working together on the road to emission-free driving. For example, this also applies for the integration of the new electronics platform B2E in the Citaro. It is even more powerful, more reliable and more flexible. In addition, in the course of its introduction, the working area for the driver was upgraded again, among other things, by a larger and more visible Color display and simplified operating elements for the heating, ventilation and air conditioning.
In addition, the safety systems of Daimler Buses are becoming more powerful each year: With the Advanced Emergency Braking System, AEBS, the touring coaches of Mercedes-Benz and Setra have an emergency brake assistant that is already more powerful than required by the law from November 2018. In an emergency, the current version of the Active Brake Assist can even activate automatic braking even in the case of standing obstacles. Daimler Buses is also taking a pioneering role with the introduction of the new LED headlights in the Citaro urban bus and the Setra TopClass 500 and ComfortClass 500 touring coaches. The new light technology is efficient and durable. In addition, LED light is subjectively perceived as being more pleasant since the light distribution is more homogeneous and the color of the light corresponds to that of daylight.

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    Setra S 516 HDH TopClass 500 and Mercedes-Benz CapaCity L with LED headlamps
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