17% growth represents ninth consecutive annual increase in turnover.
Reporting its business results for 2006, the DaimlerChrysler group of companies in South Africa (DaimlerChrysler South Africa, DaimlerChrysler Financial Services, debis Fleet Management, Sandown Motor Holdings and Atlantis Foundries), recorded good growth for the ninth consecutive year with a turnover of R32,5-billion, which is 17,3% up on the previous year.
“Our success has been largely due to the stability of the local economy, the higher domestic spend and the fast-growing demand for commercial vehicles – from people transport vehicles to the largest construction, waste and general haulage vehicles,” said Dr Hansgeorg Niefer, chairman of the management board of DaimlerChrysler South Africa. “Also in our favour has been continued demand for our passenger vehicle products, produced locally and abroad. These favourable factors have given DaimlerChrysler South Africa (DCSA) the opportunity for good sales across our range of premium vehicle brands, as well as tremendous opportunities for our finance and fleet business, and provided us with another year of record-breaking sales and turnover,” he added.
Presenting the DaimlerChrysler results to the media at the new Mercedes-Benz Commercial Vehicle Centurion outlet, which was recently awarded 2006 dealer of the year status, Dr Niefer said the group had had a good year despite rising interest rates, general business caution, and concerns about the impact of high levels of crime.
“I am particularly proud that DCSA achieved its major financial targets for 2006," Dr Niefer said. "Highlights of the year included the conclusion of our Dealer Network Strategy (DNS), the final implementation of our parts distribution strategy, good commercial vehicle sales and our strong control on overhead expenditure. These, together with the continuing excellent quality being achieved in our plant, continue to inspire confidence amongst our shareholders.”
“All divisions made good contributions, and I want to thank all our customers for their continued confidence in our products and services. I also wish to thank our employees, dealers and suppliers for their dedication and hard work," Dr Niefer said. "Our challenge for 2007 will be the production of the successor Mercedes-Benz C-Class for existing and new global market destinations."
Commercial vehicles
The company’s commercial vehicle business has seen outstanding growth and consolidation in the past year, success in all the commercial vehicle brand divisions together gave DaimlerChrysler a total market share of 21,4%, well ahead of its nearest competitor at 14,4%.
The Mercedes-Benz commercial vehicle division saw 2006 close with exceptional sales volumes totalling 6 104' units. Compared with 5 548' units sold in 2005 this provided a 12% increase for the brand. (' includes Vito panel van/crew bus.)
The Freightliner/FUSO division experienced the biggest increase in its sales among all the DaimlerChrysler commercial vehicle brands. FUSO jumped 50%, with sales of 1 160 units compared to 772 in 2005, followed by Freightliner, which increased to 21% on the back of 831 unit sales versus 688 the year before.
In the bus market specifically, the company had a very positive year as a result of a focused approach on production and its problem-solving solutions for buses in the metro- and commuter bus sectors.
“We aim to continue this success in 2007 as our product range is now very comprehensive and competitive. This year the commercial vehicle business will be focusing on the execution of our strategic plans in respect of long-term customer partnerships”, said Dr Niefer.
Passenger cars
Despite the run-out of the Mercedes Car Group’s top seller, the Mercedes-Benz C-Class model range, the car division achieved virtually the same sales as in the previous year. The Chrysler group which represents Chrysler, Jeep and Dodge brands, sold 6 322 units while the Mitsubishi Motors division, which includes model ranges such as the Mitsubishi LCV, Pajero, Outlander and Lancer model ranges, recorded 11 592 units sold.
“These results although somewhat lower than the previous records set in 2005, were expected. The primary reason is that last year was a major turning point for many of the models - either reaching the end of their lifecycle or new to the local market,” explained Dr Niefer. “We expect 2007 will produce good results as all of last year’s new introductions find acceptance and a strong foothold on the local market.”
Manufacturing
It is as a result of consistently good quality, amongst others, that the local company was given the contract to produce the successor model of the Mercedes-Benz C-Class. To this end a new state-of-the-art bodyshop has been built and equipped in the plant. The successor model requires manufacturing with some of the most sophisticated precision equipment available anywhere in the world today, and numerous new manufacturing technologies had to be introduced.
The new technology requires intensive retraining. For this reason 116 employees from the East London plant are currently in the Bremen plant in Germany being trained and skilled in the new production technologies. They will in turn, impart the newly acquired skills to local teams in preparation for the new Mercedes-Benz C-Class production which commences this year.
DaimlerChrysler Financial Services
DaimlerChrysler Financial Services, which provides financing and insurance products at the dealerships, has significantly increased its portfolio and now boasts a retail portfolio valued in excess of R11,5-billion. During 2006, after almost 10 years of conducting business in South Africa, the company has concluded its 100 000th vehicle finance deal and signed its 10 000th insurance contract.
debis Fleet Management
Another subsidiary, debis Fleet Management, of which a 35% share is held by Kagiso Trust, has substantially diversified its service and product offering and expanded its customer base by 23%. 2007 is expected to see some significant growth for this specialised fleet solution business, which won the marketing excellence award from Business Times.
Sandown Motor Holdings
The retail division of the DaimlerChrysler group, Sandown Motor Holdings, enjoyed a particularly exciting year and achieved a record turnover of R6,44-billion.
In November 2006 DaimlerChrysler South Africa and entrepreneur Roy McAllister, concluded an agreement for the sale of 40% of their shares in Sandown Motor Holdings (Pty) Ltd to True Class Consortium (Pty) Ltd for an amount of R500 million.
“A share this large in the motor retail sector, held directly by a black group, must surely set a new benchmark in the automotive industry for broad-based black economic empowerment. We are most excited that we have an agreement in place which is a natural progression from our wider dealer network strategy announced in 2002. We have overachieved on our initial target of 25%.”
“Particularly gratifying is the fact that this deal not only serves our commitment to broad-based black economic empowerment goals, but it makes perfect business sense also. It is a viable business deal based on sound economic principles, backed by due diligence and extensive risk planning. Furthermore, this is only the beginning of continuing transformation in the DaimlerChrysler group of companies,” said Dr Niefer.
“Overall our success last year can be regarded as further evidence that the South African operations of DaimlerChrysler are consistent and are providing a most positive contribution to the global conglomerate’s activities,” concluded Dr Niefer.