Mercedes-Benz
9% growth in revenue and 11% growth in total unit sales for passenger cars as
the Asian market comes within touching distance of the Europe in terms of total
sales
The battle between luxury carmakers is
slowly hitting fever pitch as Mercedes completed an exception first half of the
fiscal year. The German carmaker’s finance arm, Daimler Financial Services,
which handles customer financing and leasing, registered a 19% increase in the
first six months totalling up to $40.77 billion. Experts at TechSci Research
break this down for you:
Internal
Factors
Not only did Mercedes’ new business jump by
19%, their portfolio of globally financed and leased vehicles increased by 17%
to 4.6 million vehicles with a total sales value of €134 billion. Q1 and Q2
sales for FY2017 have been phenomenal. Daimler suggests that Mercedes sold
595,178 units of passenger cars in Q2 FY17 versus 546,517 units in Q2 FY16 and
568,070 and 496,756 in Q1 for FY17 and FY16 respectively. In total,
January-June sales for passenger cars for FY17 were at the 1,163,248 level
whereas for FY16, the figures were tallied at 1,043,273. Total unit sales for
passenger cars has grown at a remarkable 11% this fiscal cycle for Mercedes.
The same story is repeated throughout. Daimler Group in terms of total unit
sales grew at 9% from 1,445,225 in January-June FY16 to 1,576,763 for FY17.
Revenue in total for Daimler has seen an
uptick of 9% to 79,934 million Euros, for January-June FY17. This revenue is
generated majorly from Mercedes-Benz Cars (responsible for €46,294 million in
the given time period), Daimler Trucks (€16,968 million) and Daimler Financial
Services (€11,841 million).
External
Factors
TechSci experts previously suggested, in an
article titled “India-China FastEmerging as Battleground for BMW, Mercedes”, that Asia specifically would be the next target
of automakers, given the kind of sustained growth that the world’s two most
populous countries, India and China, are experiencing. Significant rise in
prosperity levels have made China an attractive proposition for Mercedes; China
sales of Mercedes-Benz cars for January-June period for FY17 totalled 304,709
units, an astonishing 35% increase from the previous fiscal. Bucking the global
trend, the Asian market during the time period, grew by 26% to 415,439 units,
within touching distance of European market, which grew by 7% to reach 511,836
units. The NAFTA zone contracted by 2% and the Rest of World growth rate was a
commendable 7%.
It is fairly obvious that Asia has become
the major growth driver for carmakers such as Mercedes and BMW and there is
strong evidence to suggest that Mercedes is going out of the way to accommodate
the two regional hegemons, India and China. The latter, a global manufacturing
hub, saw a 47% incline in the number of locally produced vehicles (210,809 out
of the 304,709 and up from 143,398 in FY16). Experts at TechSci Research suggest
that the China blueprint may be adopted by the German automaker to sync in with
India’s “Make in India” push to boost manufacturing. Given Asia’s stellar
performance in the global economy, carmakers must be watching the India and
China market very closely.
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