Mercedes 2003 Annual Report Download - page 18

Outlook
In the field of commercial vehicles the major markets of North
America and Western Europe appear to have bottomed out. The
expected economic revival with growing investment activity should
trigger a gradual increase in unit sales in these markets. However,
in Japan the purchases brought forward in the year 2003, due to
new emission regulations, will reduce growth prospects in that
country.
In the next few years, expansion in global demand for both cars
and commercial vehicles will primarily take place in the emerging
markets of Asia and South America and probably also in Eastern
Europe, due to these regions’ dynamic growth in purchasing power
and rising need for mobility. International competition will be
exacerbated by the limited scope for expansion of the large auto-
mobile markets of North America, Western Europe and Japan, in
combination with shorter product lifecycles and high production
capacity worldwide. Additional factors are stricter environment and
safety regulations, the fulfillment of which will increase costs for all
manufacturers. Against this background, such advantages as the
ability to differentiate oneself from the competition by means of
innovation and strong brands, presence in the growth markets of
Asia and the opportunity to exploit economies of scale will
continue to gain importance.
Competitiveness and efficiency to improve further in all divisions |Mercedes Car Group to renew and
expand its product range with second model offensive |Chrysler Group to launch nine new models in
2004 |Commercial Vehicles division on track for solid growth |Increasing sales support through
financial services |Total investments of €38 billion by the end of 2006 to enhance competitiveness |
High expenditures for new products in 2004 with significantly improved earnings from 2005
Essentials | Chairman’s Letter | Board of Management | Business Review | Outlook | DaimlerChrysler Shares | DaimlerChrysler Worldwide
Prospects for economic growth improve again. The prospects
for growth of the world economy have gradually improved since the
middle of 2003, with the main impetus coming from North America
and emerging markets. The US economy in particular is expected
to grow substantially in 2004. The outlook for the economies of
Western Europe can also be viewed more positively, but due to the
slow recovery of demand in Germany, growth is expected to remain
rather modest at first and is unlikely to accelerate before the year
2005. In Japan, mid-term expectations are subdued despite
surprisingly positive developments in 2003.
Now that South America has overcome its economic crisis and
Asia and Eastern Europe are developing positively, emerging mar-
kets should start to provide some useful stimulus again in 2004.
Overall, we expect the world economy to expand by just over 3% in
2004 and thereafter.
We assume that the euro will tend to appreciate slightly against
major currencies compared with average exchange rates in 2003.
Moderate rise in global demand for automobiles. Favorable
economic developments should result in more buoyant demand for
cars. Although we expect the tough competitive situation in North
America to continue in the year 2004, the market for passenger
cars and light trucks is expected to expand a little. In Western
Europe, market growth will probably commence some time during
2004 in parallel with overall economic developments but, as in
Japan, will not be as strong as in most other regions of the world.