Mercedes 2001 Annual Report Download - page 13

Business Review 9
Chrysler Group’s turnaround plan has been
implemented faster than we anticipated, with better
savings and profitability effects being achieved in
2001 than originally planned. As a result, and despite
the negative impact of lower unit sales and revenues,
Chrysler Group was able to achieve an operating loss
(excluding one-time effects) of €2,183 million, slightly
better than we announced on February 26, 2001
(an operating loss in the range of €2.2-2.6 billion).
At Freightliner, our North American truck
subsidiary, the cost-cutting measures started in 2000
have been significantly reinforced by a comprehensive
turnaround plan which was announced on October 12,
2001. With this plan we should be able to achieve
continuously increasing positive effects on profitability,
amounting to US $850 million annually from the year
2004.
Key elements are savings on material costs,
production costs and fixed costs. Within the framework
of measures designed to improve the existing business
model, in the future Freightliner will concentrate on
generating profitable business rather than increasing
market share.
Global economic weakness. Prospects for the world
economy deteriorated throughout 2001. Weighted for
each country’s share of the Group’s revenues, economic
growth in DaimlerChrysler’s sales markets fell to 1.2%
from 3.9% in 2000. As a consequence of the general
economic weakness in North America, Western Europe,
and South America, and the subsequent effects on the
world economy of the terrorist attacks on September
11, growth rates were significantly lower than in the
prior year. The Japanese economy was in recession and
Asian emerging markets were unable to equal their
dynamic growth of previous years.
There were only small exchange-rate movements
during the period under review. The euro lost 5% of
its value against the US $ and 2% against the British
pound. However, it appreciated by 8% against the
Japanese yen.
Difficult markets worldwide. Competition in the inter-
national automotive industry continued to intensify in
2001 for both passenger cars and commercial vehicles
in nearly all market segments. This was primarily
due to weaker demand in important markets, the
resulting drop in capacity utilization and numerous
new models in established market segments.
The US market for passenger cars and light trucks
shrank by 1% or 0.2 million units to 17.1 million
vehicles, despite significant increases in sales incentives.
New registrations of passenger cars in Western Europe
only equaled the levels of the previous year, particu-
larly due to the weakness of demand in Germany, and
the markets of Asia, South America and Eastern Europe
did not provide any significant impetus.
The commercial vehicles sector was impacted by
the dramatic shrinkage of demand in North America
and Argentina. Particularly in the United States, follow-
ing the weakening of the market for heavy and medium
trucks in the prior year (-12%), there was a severe
decline in 2001 (-26%). Demand in Western Europe
also declined during the course of the year.
Consolidated revenues close to prior year’s figure. In
2001, DaimlerChrysler achieved total revenues of
€152.9 billion. Adjusted for changes in the consolidated
Group, revenues were nearly at the same level as in
2000.
DaimlerChrysler Group
Mercedes-Benz
Passenger Cars & smart
Chrysler Group
Commercial Vehicles
Services
Other Activities
162,384
43,700
68,372
29,804
17,526
10,615
152,873
47,705
63,483
28,572
16,851
4,507
136,072
42,462
56,506
25,432
14,999
4,012
2000
€
2001
€
2001
US $
In millions
Revenues Consolidated Revenues
In billions of €
97 98 99 00 01
25
50
75
100
125
150
Other markets
USA
European Union