Mercedes 1998 Annual Report Download - page 25

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BUSINESS REVIEW
21
6,693
1,930
1,695
714
2,047
307
DaimlerChrysler
Passenger Cars
(Mercedes-Benz, smart)
Passenger Cars & Trucks
(Chrysler, Plymouth, Jeep®, Dodge)
Commercial Vehicles
(Mercedes-Benz, Freightliner,
Sterling, Setra)
Aerospace
Others
6,501
1,583
1,512
602
2,233
571
Research and
Development costs
in Millions
7,853
2,265
1,989
837
2,402
360
context of the Extended Enterprise concept. This provides the
groundwork for the development and ongoing cultivation of our
long-term partnerships with excellent suppliers. Within the
Global Procurement and Supply organization, synergies were
realized and projects to achieve cost reductions were initiated.
The development of common commodity and supplier
strategies as well as common operative processes will play a
major role in that process. These common strategic elements
will be implemented throughout our worldwide procurement
organization.
€ 8.2 BILLION INVESTED IN PLANT, PROPERTY AND EQUIPMENT.
To secure the future of DaimlerChrysler, we invested
€ 14.9 billion in 1998 in plant, property and equipment, as well
as in research and development.
DaimlerChrysler’s overall investment in plant, property and
equipment in 1998 increased to € 8.2 billion (€ 8.1 in 1997).
More than 82% of this amount was invested in the vehicle
business. Key projects in the Mercedes-Benz and smart Divisi-
on (€ 2.0 billion) were a new technology center in Sindelfingen,
a new plant for the A-Class in Brazil and preparations for pro-
ducing the new S-Class. Preparations for producing the num-
erous new models, a transmission plant in Kokomo/Indiana and
a new assembly plant for the Dodge Dakota in Campo Largo/
Brazil were major priorities of the Chrysler, Plymouth, Jeep and
Dodge brands (€ 3.9 billion). In the Commercial Vehicles Divi-
sion (€ 0.8 billion), major investments were made in connection
with the introduction of the Atego, along with plant
modernization.
A total of € 0.3 billion (€ 0.3 billion in 1997) were invested in
plant, property and equipment in DaimlerChryslers' Aerospace
Division. Expansion of capacity in the Airbus Program was a
priority. The major part of the investment volume in the
services business area in the amount of € 0.3 billion was made
in the IT Services business unit.
€ 6.7 BILLION FOR RESEARCH AND DEVELOPMENT.
In 1998,
there were more than 36,000 employees in research and
development at DaimlerChrysler worldwide, underscoring the
importance of R&D within the framework of our value-based
management. The objective is to ensure a more efficient use of
resources throughout the company by developing new forms of
interdisciplinary cooperation and increasingly integrating
suppliers into the process. Expenditures for R&D increased to
€ 6.7 billion (€ 6.5 billion in 1997). Of this amount, € 1.7 billion
(1997: € 2.1 billion) went to projects under contract with third
parties, especially in the Aerospace Division.
We used more than 85% of the funds for our own projects to
ensure the future of our vehicle business divisions; 7% of ex-
penditures on research and development went to the Aero-
space Division, and 4% to other business areas. Research and
development investment in Adtranz amounted to € 82 million,
in automotive electronics to € 47 million and in diesel engines
to € 56 million.
Our main activities in the vehicles divisions were the new
C-Class and S-Class Coupe models from Mercedes-Benz and a
new Chrysler Sebring, a completely new minivan and the
successor to the Jeep Cherokee. The lion’s share of research and
development investment in the Commercial Vehicles Division
was spent on product innovations in the Trucks Europe, vans
Europe and the powertrain units. In the Aerospace Division, the
main R&D priority was the on-going development of the Airbus
program, the development of new aircraft engines and new
guidance and communications systems.
Aerospace 6 %
Services 3 %
Other 4 %
Commercial Vehicles
(Mercedes-Benz, Freightliner, Sterling, Setra) 18 %
Passenger Cars & Trucks
(Chrysler, Plymouth, Jeep®, Dodge) 47 %
Passenger Cars
(Mercedes-Benz, smart) 22 %
Purchasing Volume
€ 79.6 Billion (1997: € 75.8 Billion)
97
€
98
€
98
US $