Daimler Buses: Lower unit sales and profitability in 2012

[DaimlerBuses]

Key Highlights

-Revenue of 3.9 billion euros

-EBIT (Earnings b. Interest/Taxes) of -232 million euros

-Sales of 32,088 chassis and complete buses in 2012

-155 million euros for repositioning of European and North American Bus Business segments which impacted EBIT.

-New Citaro named 'Bus of the year 2013'

 

Unit sales down from the prior year. Daimler Buses sold 32,100 buses and chassis

worldwide in 2012 (2011: 39,700) and was able to defend its market leadership
in its core markets in the segment for buses over eight tons gross vehicle
weight. (See table 4.07) The decline in sales volume compared with
2011 was largely due to lower orders for bus chassis in Latin America. The
decrease in unit sales caused revenue to fall by €0.5 billion to €3.9 billion.
At minus €232 million, EBIT was substantially lower than the figure recorded in
2011. Earnings were negatively affected also by expenditure of €155 million on
the repositioning of our European and North American business systems.

Reorganization of European and North American

business systems. Daimler Buses launched a growth and efficiency campaign known as
“GLOBE 2013” in order to generate additional growth potential and strengthen
the division’s competitiveness, particularly in  Europe. This program
for safeguarding sustainable profitability is being rolled out along the entire
value chain and at all locations, and aims to utilize potential for an earnings
improvement in the magnitude of €200 million, to be realized by the end of
2014. One of its objectives is to intensify the links between all business
locations in the European production network. As part of “GLOBE 2013,” Daimler
Buses will also exploit existing growth potential in its traditional markets
and further expand business in new ones. In response to the continually
decreasing demand for city buses in North America in recent years, we decided
to discontinue production of Orion city buses in the United States and Canada.
The American bus manufacturer Motor Coach Industries International (MCI) became
the exclusive distributor of Setra coaches in the USA during the year under
review, and we received a 10% share in MCI in return. 

Varying business development in the regions. In Western

Europe, the Daimler Buses brands Mercedes-Benz and Setra offer a complete range
of city buses, intercity buses and coaches, as well as Mercedes-Benz bus
chassis. The sovereign-debt crisis had a dampening effect
oncustomer demand in this region, but sales of 5,900 units were
nonetheless at the level of the previous year. (See table 4.08) Daimler Buses
was thus able to further strengthen its leading market position in Western
Europe with a market share of approximately 28% (2011: 27%). In Turkey, we sold
1,100 units (2011: 1,100), benefiting from a larger number of public-sector
orders for city buses than was the case in 2011. Sales of Mercedes-Benz bus
chassis in Latin America (excluding Mexico) declined by 29% to 17,800 units. In
Brazil, the stricter Euro V emissions standards were introduced in early 2012.
In anticipation of this development, many purchases that would otherwise have
been made in 2012 were concluded in 2011. With a market share of approximately
43% (2011: 43%), we were able to clearly maintain our leading market position
in Latin America. The stable development of the Mexican market enabled Daimler
Buses to sell 3,500 units there, just as it had done in the prior year. In
addition, our market share of roughly 48% (2011: 50%) once again allowed us to
defend our leading market position in Mexico last year. In the context of
repositioning our North American bus business, sales of Orion city buses were
discontinued in 2012. 

Major orders for city buses and chassis from

Brazil. Brazil’s major cities are already renewing their bus fleets and
improving traffic infrastructures in preparation for the huge influx of
visitors and traffic expected for the World Cup soccer championship in 2014 and
the Olympic Games in 2016. With its order for 135 new Mercedes-Benz city
buses equipped with BlueTec 5 technology, the city of Fortaleza is just one of
many environmentally conscious municipalities that are striving to modernize
their local public transport fleets in anticipation of these events. We also
received a major order from the Ribeirão Preto transportation company in São
Paulo province for just under 390 Mercedes-Benz bus chassis. In addition, we
will supply 2,600 school buses for the Brazilian educational program. The
chassis will be built up as school buses together with a Brazilian bodybuilder
and will be delivered in 2013. 

 

New Mercedes-Benz Citaro named “Bus of the Year

2013. ”The new Citaro with its Euro VI-compliant engine greatly impressed the
international jury of experts who selected the winner of the “Bus of the Year
2013” award. The new Citaro — the first series-produced regular-service
bus to comply with Euro VI — was praised for the economical and
forward-looking transport solution it embodies. Our main goal in developing the
Citaro was to combine environmental compatibility and economy with advances in
performance, safety and comfort.

 

The New Citaro: http://media.daimler.com/dcmedia/0-921-1399355-1-1394844-1-0-1-0-0-1-11702-854946-0-3842-0-0-0-0-0.html?TS=1361954984871
 

New ComfortClass 500 sets the benchmark. The Setra brand’s

new-generation ComfortClass 500 coach sets new benchmarks for design, comfort,
safety, and efficiency. The two-axle S 515 HD, the two- and three-axle S 516 HD
and the three-axle S 517 HD were all launched in the fall of 2012. The new
aerodynamic design of the Setra ComfortClass 500 reduces fuel consumption.
Aerodynamic adjustments have lowered the bus’s wind resistance by 20%, which
translates into a 5% decrease in fuel consumption. With the help of additional
individual measures, the Setra ComfortClass 500 now boasts a drag coefficient
of 0.33, a figure unmatched in the industry. 

Daimler Buses continues to work on clean drive

systems. The world’s population is steadily growing and becoming
increasingly urbanized. The need for mobility is therefore increasing
worldwide, and this development is affecting the climate and the environment.
Because buses will play a key role in the mobility networks that will be
required in the future, Daimler Buses is developing pioneering drive
technologies to address the associated challenges. For example, it is
optimizing vehicles by equipping them with ultramodern combustion engines. In
particular, Daimler Buses introduced two additional Euro VI-compliant models in
2012 — the Mercedes-Benz Citaro Euro VI and the Setra ComfortClass 500. Euro VI
emission limits will become obligatory in early 2014, leading to a further
drastic reduction of pollutant emissions. The two buses impressively
demonstrated how emission reductions can be combined with enhanced fuel economy
during the Record Run Buses 2012 comparative test. During this five-day event,
which was monitored by neutral parties, five buses covered a total distance of
almost 18,000 kilometers. The emission and fuel consumption performance of the
Euro VI-compliant buses was then compared with that of their predecessors. The
anticipated fuel savings of 4-6% (Citaro) and 5-6% (Setra) were not only
achieved, but also significantly exceeded. In fact, both models cut fuel
consumption by more than 8% compared to their predecessors and produced lower
emissions thanks to their compliance with Euro VI. 

 

 

 

--

http://ar2012.daimler.com/divisions/daimler-buses

 

[User]

Daimler would have kept up its unit sales if it didn't decide to stop the production of Orion buses. They were still getting orders left and right, and still decided to drop out of the business here. Its good to know that they're still working on projects for buses like their clean drive systems. Maybe there is a chance Orion will return some day.

[Orion VII 4 Life]

Daimler would have kept up its unit sales if it didn't decide to stop the production of Orion buses. They were still getting orders left and right, and still decided to drop out of the business here. Its good to know that they're still working on projects for buses like their clean drive systems. Maybe there is a chance Orion will return some day.

Not only that, but the Orion VIII was weeks away when Daimler shut it all down. That could've been a big success, considering it was based off the bus with the best Altoona record in history.

[theaveragejoe]

 

Daimler would have kept up its unit sales if it didn't decide to stop the production of Orion buses. They were still getting orders left and right, and still decided to drop out of the business here. Its good to know that they're still working on projects for buses like their clean drive systems. Maybe there is a chance Orion will return some day.

 

 

I fully agree they would have got for sure an MTA and King County Metro order for sure. Also with the coming of the Artic that would have been made later this year.

[RailBus63]

Nice example of corporate P.R. spin - they're going to grow the company by dropping out of major markets. 

 

A big corporation like Daimler could have used the recent downturn to its advantage by using its deep pockets to take a smaller profit per bus in the short term and put pressure on competitors.  Volvo gets it, as evidenced by the huge push NovaBus is making in the U.S. market, but the Daimler bigwigs in Europe never did.  I just wished they had found a way to sell the company instead of pulling the rug out from under the folks in Oriskany and Mississauga.

[Culver]

Nice example of corporate P.R. spin - they're going to grow the company by dropping out of major markets. 

 

A big corporation like Daimler could have used the recent downturn to its advantage by using its deep pockets to take a smaller profit per bus in the short term and put pressure on competitors.  Volvo gets it, as evidenced by the huge push NovaBus is making in the U.S. market, but the Daimler bigwigs in Europe never did.  I just wished they had found a way to sell the company instead of pulling the rug out from under the folks in Oriskany and Mississauga.

It was a seriously short-sighted decision by them. Had they waited a year to see how Nova (cramped interior, huge overhang) and New Flyer (breaking down constantly) did in the 90-bus BTE compared to their Orion 7 3G, they would've had their business case to stay, especially with the Orion 8 being an improvement on all the things that made the O7 3G great. They would've had a 600+options bus order for diesel buses, and they already had the Bus CNG bus order to work on. Outright bad business decisions by Daimler.

[Metro CSW]

It was a seriously short-sighted decision by them. Had they waited a year to see how Nova (cramped interior, huge overhang) and New Flyer (breaking down constantly) did in the 90-bus BTE compared to their Orion 7 3G, they would've had their business case to stay, especially with the Orion 8 being an improvement on all the things that made the O7 3G great. They would've had a 600+options bus order for diesel buses, and they already had the Bus CNG bus order to work on. Outright bad business decisions by Daimler.

Yeah, also remember the late deliveries with the NG HEV order. They had to give 2 buses away for free in 2010. They had a chance to redeem themselves with the BT&Es.....

[User]

Oh yeah, the Orion VIII and that Orion IX artic were close. I forgot about that. I mean, the VIIs were so successful that Orion could have just lived off that for a bit. I mean, so many of those orders were turned to New Flyer. Orion really didn't think this decision through.

[RailBus63]

The VII was a very good bus, but Orion sure sucked at selling it - they completely lost the Ontario market to New Flyer other than TTC and they lost most of their upstate New York customers to Gillig.  I've heard from a few transit-industry sources that Orion's follow-up support was terrible once they made the sale (Gillig has a great reputation, on the other hand, which is why they do so well with repeat orders).  New Flyer cleaned Orion's clock ever since the switch to low-floors.

[Turbo19]

In  my opinion, what killed Orion was their reliance on a few key customers, not gaining new customers and their slightly higher "price tag" per bus. Basically, they got too comfortable and as a result suffered because of that.

[DaimlerBuses]

A look at what's up from our friends at Daimler Buses:

 

http://www.daimler.com/Projects/c2c/channel/documents/1835341_Daimler_Buses_at_a_Glance_Edition_2013.pdf

[LRG]

Orion decided to close up shop at the wrong time.

 

I was really looking forward to seeing Third Gen CNGs at Gleason....

[aemoreira81]

Given that Mercedes has a plant in Monterrey...I wonder why they didn't consider a plant in Texas near Brownsville to market buses for American customers if labor costs were a major concern. (I don't believe that the Nova Bus plant upstate is a union plant.)

[Turbo19]

Given that Mercedes has a plant in Monterrey...I wonder why they didn't consider a plant in Texas near Brownsville to market buses for American customers if labor costs were a major concern. (I don't believe that the Nova Bus plant upstate is a union plant.)

Well the main reason for Mercedes having a plant in Monterrey is due to the fact that many cities in Mexico and elsewhere in Latin America prefer European transit buses.

[theaveragejoe]

Given that Mercedes has a plant in Monterrey...I wonder why they didn't consider a plant in Texas near Brownsville to market buses for American customers if labor costs were a major concern. (I don't believe that the Nova Bus plant upstate is a union plant.)

 

 

Most of the buses built in Mexico are made on Mercedes truck chassis and are different then North Amercian transit buses. This would cost more then its worth as I believe they also assemble trucks at the same plant in Monterrey.

 

Well the main reason for Mercedes having a plant in Monterrey is due to the fact that many cities in Mexico and elsewhere in Latin America prefer European transit buses.

 

 

Most of Mercedes bus sales in Mexico are on truck type chassis almost like school buses.

[Turbo19]

Most of Mercedes bus sales in Mexico are on truck type chassis almost like school buses.

I'm somewhat familiar with the vehicles. To my recollection, only a handful of operations use North American Transit buses, most noteably Azul y Blanco of Tijuana, Baja California Norte. They operate many second hand buses as well as a select few they directly purchased, though I'm sure you knew already.

[theaveragejoe]

I'm somewhat familiar with the vehicles. To my recollection, only a handful of operations use North American Transit buses, most noteably Azul y Blanco of Tijuana, Baja California Norte. They operate many second hand buses as well as a select few they directly purchased, though I'm sure you knew already.

 

 

Most other larger Mexican cities use Mexican assembled Daimler, DINA and Marcopolo buses with some imported Volvo and Chinese low floors.