Daimler Trucks defines its strategy | Automotive Industry News
Daimler Truck hosted its first strategic day, setting out its ambitions as an independent company.
The Daimler Truck Board of Directors headed by CEO Martin Daum presented strategic goals, key financial goals and technology goals.
The unit is targeting benchmark margins in each region, and a double-digit overall operating margin for the new group by 2025, in a scenario with favorable market conditions.
There is also an ambitious technology roadmap for battery electric vehicles (BEV) and fuel cell (FCEV), with up to 60% of ZEV sales by 2030.
Several new technological partnerships announced: development of advanced batteries with CATL, high-speed charging with Power Electronics, Siemens and Engie and a 1,200 km “hydrogen corridor” in Northern Europe with Shell.
Daimler said Daimler Truck’s separation and stock market listing are on track; completion is expected by the end of 2021.
Daimler Truck generates more than 40 billion euros in sales and sells more than half a million trucks and buses in a typical year. With strong brands on all major continents like Freightliner, Mercedes-Benz, FUSO and BharatBenz, Daimler Truck claims it offers the widest range of trucks and buses in the industry.
Going forward, an independent Daimler truck will accelerate its strategic ambitions and improve its financial performance, he said. While Daimler Truck is a powerhouse in North America, dominating the region with a 40% market share in the heavy-duty segment and benchmark profitability, its recent track record in other market regions is less satisfactory. The inconsistent regional profitability records of Europe, Brazil and Asia need to be improved significantly, Daimler said.
“Our mission as an independent company is clear: our ambition is to pave the way for zero emissions in the trucking industry by accelerating the development of battery and fuel cell vehicles. And we will reset profitability. We will target the benchmark in each region. Each region must offer competitive performance and we are ready to implement the necessary measures to achieve this goal. We are ready to make tough decisions to lower our break-even point and increase our performance ”, said Martin Daum, CEO of Daimler Truck AG
Daimler Truck has announced that it will reduce fixed costs, investment and R&D spending by 15% by 2025 (compared to actual 2019 figures). The reduction in fixed costs will include a target of reducing personnel costs for Mercedes-Benz trucks of 300 million euros by 2022, and new measures to reduce complexity, streamline processes and generate sustainable savings. Daimler Truck will also intensify its focus on the most profitable segments and regions. This will include a “clearer focus” on the more profitable heavy-duty segment in key regions, and refocusing ICE powertrain investments towards zero-emission and standardized global EV architectures.
Daimler Truck also said it will put more emphasis on growing its aftermarket revenue and services to drive profitability and customer loyalty. This includes the traditional activities of spare parts and maintenance services, as well as financial services such as leasing, financing and tailor-made insurance. New and rapidly growing services in the fields of digitalized, autonomous and electrified transport offer additional growth potential. Overall, Daimler Truck sees significant growth potential in services and aims to increase service portfolio revenue from 30% currently to 50% in 2030.
Path to zero emissions
Andreas Gorbach, the new Technical Director and Head of the Truck Technology Group, outlined the premises of Daimler Truck’s technology strategy: First, the company will cut spending on internal combustion engines (ICE) and work with partners . For example, Daimler Truck is already in partnership with Cummins for medium duty engines. In addition, the company is actively seeking additional partnerships in the heavy engine sector to share the necessary investments. Daimler Truck will further reduce spending in the conventional powertrain and redirect the vast majority of R&D spending to ZEV technologies by 2025. For ZEV technology, the company has committed to both battery-electric vehicles ( BEV) and hydrogen solutions.
After starting with the fully electric FUSO eCanter in 2017, Daimler Truck has established the broadest ZEV utility vehicle portfolio of all global truck OEMs. ZEVs such as Freightliner’s eCascadia and eM2, Mercedes-Benz eActros and eCitaro and the iconic Thomas Built Buses Jouley are already operating daily and have driven more than 10 million kilometers in the hands of customers. Other products such as a 500 km range eActros LongHaul will be launched in the coming years. With a dedicated new generation BEV truck planned for the coming years, Daimler Truck is aiming for a range of up to 800 km.