UPDATE 2-Daimler Trucks suffers weak start to 2013

Wed Mar 13, 2013 1:22pm EDT

* Improvement expected starting in H2

* Operating margin target of 8 pct achievable in 2014

* Sees higher truck sales, profits, market share in 2013

* Wants majority control of Kamaz, but not now

By Christiaan Hetzner

WOERTH, Germany, March 13 (Reuters) - Daimler's trucks business suffered a weak start to 2013 in Europe and the United States and new model launches are unlikely to boost its sales until the second half of the year, the company said on Wednesday.

European truckmakers are suffering heavily from the economic malaise in the euro zone since demand for their vehicles closely tracks the cross-border trade of goods.

Daimler expects its other main market of North America to contract by between 5 and 10 percent this year as customers wait for clearer policy signals out of Washington before investing.

"New orders in the United States were a bit better than we thought ... but the fiscal cliff has not been resolved and our customers are very sensitive to this," said Daimler Trucks chief Andreas Renschler.

The company will announce next week at an industry trade show in Louisville, Kentucky how many of a planned 1,300 assembly line jobs it will cut in the United States.

"It will be somewhat fewer, whether it's only a thousand we will have to see," Renschler said.

Daimler Trucks is the largest manufacturer of commercial vehicles in the world, selling 462,000 trucks last year including popular models like the heavy-duty Mercedes-Benz Actros and Freightliner Cascadia as well as the smaller Fuso Canter used mainly in Asia.

It has been unable to turn that size advantage into industry-leading profitability, Renschler said, adding that Daimler also lagged some of its rivals in taking care of customers after they bought a truck.

Renschler said his target of widening his unit's operating margin to 8 percent in 2013 from 5.5 percent last year had been delayed slightly.

"It should be achievable in 2014 at the latest," he said.

He aims to save about 1.1 billion euros in costs and generate roughly 500 million in additional turnover by the end of 2014 to help it achieve the margin goal.

SABRE RATTLING

Registrations of new heavy-duty commercial trucks fell 9.4 percent in the European Union last year, including bigger drops in Italy and Spain.

Worse is expected in 2013, when Daimler Trucks expects the European market to contract by as much as 5 percent.

Swedish rival Volvo AB recently warned of a rough start to this year as factories ran at half-speed, while Volkswagen's premium truck brand Scania said it would reduce production by 15 percent in the first quarter and cut around 700 jobs.

However, Daimler believes new vehicles like the Antos distribution and Arocs construction trucks will help it boost vehicle sales, earnings and its share of all major markets this year.

It has also developed a strategy to address the specific needs of emerging market customers who care less about expensive emissions-reducing technology and creature comforts but don't want to sacrifice on western-style durability.

Alongside the nominal 6,000-odd premium Mercedes vehicles to be sold in China in 2013, Daimler's local joint venture BFDA has launched production of a tailor-made range of Auman branded trucks together with partner Beiqi Foton.

"We expect Auman will outperform China's truck market," Renschler said, adding he expected stimulus programmes in China should lead to market growth of 10-15 percent this year.

He dismissed comments from large Kamaz shareholder Rostec that talks to raise Daimler's 15 percent total stake in the Russian truckmaker were suspended due to price differences.

"We want to increase the stake and at some point in the future we want to have a majority, but not now," he said, calling Rostec's comments "sabre-rattling".

"The supplier base isn't there and the political environment is not that stable," said Renschler.

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