Mercedes 2008 Annual Report Download - page 89

Management Report |Outlook|85
Revenue and earnings
Daimler anticipates a significant decrease in business volume
in 2009. From the starting point of the currently projected unit
sales, revenue is likely to be lower than in 2008 in all of the
vehicle divisions. In the year 2010, we then expect at least slight
growth in our business volumes, provided that the projected
revival of automotive markets actually occurs. The proportion
of revenue generated by the growth markets of Asia and
Eastern Europe will probably continue to rise in the coming years.
We anticipate further substantial burdens on the earnings of the
Daimler Group and its divisions. A more detailed statement on
earnings will only be possible later in the year, when the develop-
ment of the world economy and the automotive markets can
be better assessed. In order to improve the earnings situation on
a sustained basis and in all divisions, we have continued and
intensified our actions to reduce costs and improve efficiency.
Furthermore, we are pushing ahead with our research and
development work in line with our Roadmap to Sustainable Mo-
bility. We will further improve the environmental compatibility
and fuel efficiency of our vehicles by applying new technologies,
while appealing to customers with our typical product features
of safety, comfort and above all fascination.
With the help of our intensified efficiency-improving actions
and the market success of our new products, we should be able
to increase our earnings again in 2010.
Mercedes-Benz Cars has intensified its actions for continuous
efficiency improvements and has launched additional initiatives.
But the progress achieved will not be sufficient to offset the
burdens of the difficult market situation in the short term. There
will also be rising expenses for the development and production
of new drive technologies and innovative safety systems. In the
medium term, we expect to significantly increase our return on
sales once again due to the market success of our new products
and efficiency improvements.
With its Global Excellence program, Daimler Trucks has already
initiated actions to reduce the impact on earnings of the currently
very unfavorable market situation. These measures include the
repositioning of Daimler Trucks North America with a focus on the
core brands Freightliner and Western Star and the expansion
of our presence in global growth markets.
At Mercedes-Benz Vans, in the context of our change process -
Creating the Next, we have once again intensified our existing
initiatives for continuous efficiency improvements to counteract
the fall in earnings triggered by the unfavorable market develop-
ments.
Daimler Buses also has initiated a comprehensive package
of measures designed to improve efficiency also in this unit, which
should allow us to compensate for negative market developments
at least partially.
Daimler Financial Services will continue its strategy with a focus
on efficiency improvements in 2009. This includes taking mea-
sures to standardize its worldwide process and system landscape.
The division expects both credit defaults and refinancing expen-
ses to be significantly higher than in 2008.
The business development we anticipate for the year 2009
will probably affect the Group’s financial position in the form of
lower cash inflows. Daimler’s refinancing costs have risen con-
siderably as a result of the present financial crisis. However, we
have taken several actions that should allow us to maintain
sufficient liquidity even under the present extremely unfavorable
financial conditions. These actions include the rapid adjustment
of production and employment by means of flexible working-time
models and short-time work, the reduction of inventories, the
limitation of our expenses and the optimization of our refinancing
instruments.