Daimler Sells Less Vehicles but More Buses

Daimler BusesDaimler AG reported its preliminary results for the fiscal year 2019 ended December 31, 2019. The company sold less vehicles – 3.34 million passenger cars and commercial vehicles to 3.35 million in 2018 – but made 5 billion euros more revenue compared to 2018. Daimler Buses’ sales grew by 6% to 32,600 units in the fiscal year 2019 (2018: 30,900). Revenue increased by 5% to €4.7 billion (2018: €4.5 billion). EBIT amounted to €283 million (2018: €265 million), an increase of 7%.

Daimler explains the positive development in bus revenue by an increase in unit sales in Brazil, among other things, as well as favorable exchange rate effects. At Daimler Mobility, new business increased by 3% to 74.4 billion euros (2018: €71.9 billion). This division is all about mobility services. Last year Daimler BMW Group merged their respective divisions into the YOUR NOW group, a joint venture in which for the first time in history Bavarian companies BMW Group and Daimler AG are coming together to define the future of urban mobility. Expenses relating to the realignment of this joint-venture reduced the EBIT.

Mercedes-Benz Vans’ unit sales increased in the fiscal year 2019 by 4% to 438,400 (2018: 421,400) vehicles. Revenue was 9% higher at €14.8 billion (2018: €13.6 billion). EBIT decreased to minus €3,085 million (2018: plus €312 million). While the higher unit sales and a more favorable model mix had a positive impact on earnings, the division’s EBIT was crucially affected by a reassessment of expenses for ongoing governmental and legal proceedings and measures relating to Mercedes-Benz diesel vehicles as well as expenses for a recall of Takata airbags. Furthermore, expenses for the review and prioritization of the product portfolio reduced EBIT.

The Group’s total revenue was €172.7 billion (2018: €167.4 billion), an increase of 3%. The Daimler Group posted full-year EBIT of €4.3 billion (2018: €11.1 billion), reflecting material adjustments including expenses from legal proceedings and related measures, restructuring measures and M&A transactions. In 2019, net profit weakened to €2.7 billion (2018: €7.6 billion).

Ola Källenius, Chairman of the Board of Management of Daimler AG and Mercedes-Benz AG, said in the press release: “We cannot be satisfied with our bottom line. The future of the Daimler Group lies in CO2-neutral mobility as well as in consistent digitization. To achieve that, we have substantially ramped up our investments into new technologies.”

Daimler stated that the resulting costs require comprehensive measures including significant reduction of material and administrative costs and the reduction of personnel costs by more than €1.4 billion by the end of 2022. Daimler there for has reported it will cut around 10,000 jobs worldwide.

This release originally appeared on the Busworld website. You can view it here.