Mercedes 2008 Annual Report Download - page 87

Management Report |Outlook|83
In our view, the main risks for the global economy are to be
seen in an ongoing crisis of confidence, further falls in banks’
credit volumes, a longer and deeper recession in the triad regions
(Western Europe, North America and Japan), economic slump
in key emerging markets, and the incipient danger of deflation.
Our projections for the development of exchange rates are also
highly uncertain against the backdrop of global economic risks.
We assume that currency markets will remain volatile in the year
2009, and expect the euro to fall against the US dollar and the
Japanese yen on average over the year. For the British pound, we
anticipate an average exchange rate similar to that in 2008.
Automotive markets
The great uncertainty about the duration and extent of the
global economic downturn is also connected with substantial
risks for the development of the world’s automotive markets.
From today’s perspective, global demand for automobiles could
decrease by another 10% in 2009 compared with the prior year.
In the world’s triad markets, we anticipate further significant falls
in unit sales overall; falling unit sales are also to be expected in
most of the emerging markets. In the United States, we assume
that demand for cars and light trucks will fall again significantly
compared with the prior year. The decline in the Western European
car market is likely to be more severe than in 2008 and will prob-
ably affect all of the volume markets, although it may be reduced
slightly by the support measures planned and in some cases
implemented by governments. Demand for cars is also likely to
decrease in Japan. We expect demand for cars to fall even in
most of the emerging markets, in some cases quite significantly.
Prospects for the major markets for commercial vehicles are
also unfavorable. The triad markets are likely to suffer a substantial
drop in demand. Above all in Western Europe, the commercial
vehicle business is at the beginning of a distinct cyclical downturn
phase, which will particularly affect sales of medium and heavy
trucks. In the United States, demand for medium and heavy trucks
will probably decrease for the third successive year, but not as
drastically as in the two previous years. The Japanese truck market
will probably contract again significantly in 2009. The global
economic slowdown will dampen demand for commercial vehicles
also in the growth regions of Asia, Eastern Europe and Latin
America. In the major emerging markets therefore, distinct market
contraction is expected in all commercial-vehicle segments for
the first time in many years.
We assume that – accompanying a hesitant revival of the world
economy – automotive markets will also reach and pass through
the bottom of the curve in the second half of the year.
The present worldwide weakness of demand underscores the
need for structural change in the automotive industry. The key
challenges are not only the adjustment of capacities, but above
all the widening of product ranges to include fuel-efficient and
environmentally friendly vehicles and transport solutions. The
focus will increasingly be on new concepts for sustainable mo-
bility. Whoever wants to successfully meet these challenges and
grasp the opportunities offered by future developments must
make substantial investments also in difficult times. Some of the
main opportunities are emerging in the application of new tech-
nologies in drive systems. The need to cooperate and thus also for
the industry to consolidate will therefore continue to grow. At
the same time, the ability to stand out from the competition with
innovations, fascinating products and strong brands will be an
increasingly important success factor.