Mercedes 2015 Annual Report Download - page 146

B | COMBINED MANAGEMENT REPORT | OUTLOOK 153
The development of China continues to be of key importance
for the world economy. Despite current uncertainty with regard
to the Chinese stock market and the development of the
currency exchange rate, most analysts assume that a sudden
slump in growth dynamism (“hard landing”) can be avoided.
However, the ongoing economic restructuring – away from high
investment and towards more consumption – will entail rather
lower growth rates of about 6.5%. Due to the renewed fall in raw-
material prices at the beginning of 2016, the economic
situation of all emerging markets that rely on exports of raw
materials remains critical. Recessive tendencies are still
very pronounced in those countries. This applies in particular
to Brazil, and to a lesser extent also to Russia. But as many
other emerging markets remain significantly below their long-
term expansion potential, the growth of these economies
will remain limited and will be only slightly stronger than in 2015.
In total, global economic output in 2016 is unlikely to exceed
the rather below-average growth corridor of 2.5 to 3%. With
regard to the currencies important for our business, we con-
tinue to anticipate significant exchange-rate fluctuations in
2016.
In order to counteract the risks arising for our business as a
result of still very volatile exchange rates, we conduct hedging
transactions as far as this makes sense for the various
currencies. For the year 2016, we have hedged approximately
80% of the exchange-rate risks as of mid-February.
Automotive markets
According to current estimates, global demand for cars in
the year 2016 is likely to increase again by between 3 and 4%
from its high level of 2015. Growth rates in the traditional
markets of the United States and Western Europe will probably
be significantly lower than the substantial growth of recent
years. But the Chinese market should expand significantly
once again, thus making the largest contribution to worldwide
growth.
However, much of the expected growth in China will be the
result of government stimulus. Against the backdrop of the
pronounced weak phase that the Chinese market went through
last summer, the government halved the sales tax on cars
with engines of up to 1.6 liters displacement in October. After
this measure already resulted in a visible improvement in
the later months of 2015, a positive effect is to be expected
also in 2016.
In the US market for cars and light trucks, only slight growth
is to be expected after the all-time high in the reporting year.
We anticipate slight market growth also for the market of
Western Europe. While little growth is likely in the core
markets of Germany and the United Kingdom, considerable
catch-up potential exists in other markets such as Italy.
In Japan, a stabilization of demand is expected following the
significant market correction of the previous year. The outlook
for the large emerging markets remains mixed. Market growth
in India should accelerate again, whereas the ongoing recession
in Russia will most likely result in a further decrease in car
sales.
Demand for medium- and heavy-duty trucks in the markets
relevant for Daimler should be slightly below the prior-year
volume in 2016.
In the North American truck market, the gradual weakening
of the industrial sector is likely to have an impact. From today’s
perspective, demand for Classes 6-8 trucks is likely to decrease
by approximately 10%. But the European market so far seems
to be fairly unaffected by the uncertain development of the
world economy and should continue its recovery with slight
growth this year.
The Brazilian market shows no signs of improvement. Due to
the ongoing economic recession and the continuation of
relatively unfavorable financing conditions, we have to antici-
pate further market contraction in the magnitude of 10%. The
situation in the Russian market will remain difficult, so demand
there can only be expected at about the prior-year level.
Demand in China is likely to be impacted by the growth slow-
down in the manufacturing sector. From today’s perspective,
only a moderate market recovery can be anticipated.
Demand in Japan for light-, medium- and heavy-duty trucks is
likely to be relatively solid. In a rather sluggish economic
environment, the market volume should be at about the prior-
year level. The Indonesian truck market is expected to
stabilize at the low level of 2015. In India, further significant
growth in the segment of medium- and heavy-duty trucks
is anticipated.
We expect a slight increase in demand for mid-size and large
vans in Western Europe in 2016 and stable demand for
small vans. For the United States, we also anticipate moderate
growth in the market for large vans. In Latin America,
however, we expect further substantial contraction in the
market for large vans, while in China, we expect more lively
demand in the market we address there.
We expect a slightly larger market volume for buses in West-
ern Europe in 2016 than in 2015. Following the significant drop
in demand for buses in Brazil, we anticipate further market
contraction in 2016.