Daimler Trucks chief sees dip in orders

PARIS/MOSCOW (Reuters) - New truck orders at Daimler AG (DAIGn.DE), the world's largest commercial vehicle maker, could decline through the first quarter of next year, the head of its trucks division said on Tuesday.

"I'm expecting a little bit of a downward trend in the first quarter because we don't have the EPA '10 orders any longer," Andreas Renschler told the Reuters Auto Summit, referring to prebuys ahead of U.S. Environmental Protection Agency emission norms going into effect at the start of 2010.

He added he did not believe fourth-quarter new orders would exceed the 75,000 booked in the three months to September.

Despite the tough market, Renschler said he wanted to stay on as head of the division. Media had speculated his contract expiring late next year would not be renewed and reported that Wolfgang Bernhard -- a former star executive in the industry -- would replace him.

For 2010, Renschler expects more or less stable demand in Europe and Japan. In the United States, he sees a chance for growth after three years of declines, thanks to deliveries in the first quarter of orders made ahead of the EPA rules.

Freight cargo in some sectors like food and cigarettes remained solid, for example, but construction in the once-booming eastern European market had ground to a halt.

"There are signals that are okay and there are signals that are more or less not okay," he said.

Consequently, Daimler will keep its core German operations on "kurzarbeit," a government short-time working scheme, until June and will further draw down any of the 300 hours remaining on its working time accounts to avoid letting go staff.

STRIVING FOR BREAKEVEN

"We're striving for a breakeven in the three regions," he said, adding however that Daimler's European Mercedes-Benz truck operation was already profitable compared with Daimler Trucks North America (DTNA) and its operations in Asia controlled by its 85 percent-owned Fuso unit.

All truckmakers generally agree that scale is a critical prerequisite for success in the industry, but the sharp downturns in the U.S. and Japan have hobbled Daimler Trucks' results, as well as those of global rival Volvo (VOLVb.ST).

Consequently, the company has posted 281 million euros of restructuring charges for Daimler Trucks North America (DTNA) since 2008 and another 217 million at Fuso so far this year.

The trucks chief said his division is on track to achieve a 300 million euro annual operating profit improvement over three years at DTNA, totaling 900 million by 2011, and a further 760 million euro improvement altogether by that same year at Fuso.

Asked whether he would stay on to oversee the completion of the restructuring plans, he said: "It looks like (that)."

Renschler was reluctant to say when Daimler Trucks would deliver an 8 percent operating margin target over the cycle, which Daimler officially started counting with its 2005 year.

"If you put 2009 into the cycle, I think it will be terrible. I think 2010 will also be the same level, nobody knows. We still committed to achieve our overall profit goal but don't ask me when," he said.

Daimler's recently announced Fuso and Mercedes-Benz trucks would each form a joint venture with Russia's Kamaz (KMAZ.MM), but Renschler said the investment would be "very low" despite hopes demand could rebound there perhaps as early as next year.

Asked whether Daimler was comfortable with its 10 percent stake in the Russian truckmaker, for now as well as the foreseeable future, he answered: "Yes."

(Additional reporting by Helen Massy-Beresford and Gilles Guillaume; Editing by David Holmes)

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