Mercedes 1999 Annual Report Download - page 30

BUSINESS REVIEW
24
Aerospace 5 %
Services 2 %
Other 4 %
Commercial Vehicles 19 %
Chrysler Group 46 %
Mercedes-Benz
Passenger Cars & smart 24 %
Purchasing Volume
€94.9 billion (1998: €79.6 billion)
potential into performance included the joint production of
the M-Class and the Jeep Grand Cherokee in Graz, the
integration of our sales organization in all important
markets, the exchange of components in the automotive
business, and numerous projects in global procurement and
supply. For example, the implementation of a software pro-
gram previously only used in Auburn Hills, will enable us to
reduce the development time for Mercedes-Benz vehicles by
more than 15%. All in all, with €1.4 billion in the year under
review, we significantly overachieved the synergy targets
announced in the merger report.
TARGETED ACQUISITIONS IN THE AUTOMOTIVE SECTOR. On
January 1, 1999, DaimlerChrysler strengthened its position in
the high-performance sports car segment by purchasing 51%
of AMG GmbH. The remaining shares in the company will be
acquired gradually between now and 2009. This acquisition
will enable us to expand the market presence of the renowned
AMG brand.
In addition, in January 2000 we acquired a 40% stake in the
TAG McLaren Group, one of the world’s leading producers
of high-performance sports cars and racing cars. Our
investments in AMG and TAG McLaren are part of a strategy
designed to further strengthen both the technological
competence and the image of the Mercedes-Benz brand.
In a move that will further strengthen our position on the glo-
bal bus market, our Freightliner subsidiary established a joint
venture with the UK’s Mayflower Corporation plc. The new
company, known as Thomas Dennis Co. LLC., focuses on the
production and marketing of commercial low-floor buses for
the North American market.
On October 1, 1999, DaimlerChrysler also acquired 49% of the
vehicle customizing company, Westfalia Werke GmbH & Co., in
response to the growing demand for customized recreational
vehicles.
SALE OF DEBITEL SHARES GENERATES €1.1 BILLION. In
1999 we reduced our stake in debitel AG from 52% to 10%.
In view of the competitive situation in the telecommunica-
tions sector, substantial investment would have been neces-
sary in fixed-line networks to secure debitel’s position in
the telecommunications market and to expand internation-
ally. Such an investment, however, would have run counter
to DaimlerChrysler’s strategy of concentrating on its auto-
motive business and related services.
NEW DIMENSIONS IN AEROSPACE. The agreements signed in
October 1999 to establish the European Aeronautic Defence
and Space Company (EADS) and the space technology joint
venture Astrium open up new opportunities for the European
aerospace industry.
The merger of Dasa, the French company Aérospatiale Matra
and CASA of Spain to form EADS will create the largest
aerospace company in Europe and the third-largest worldwide.
EADS, which is expected to have 96,000 employees and
annual revenues of €21 billion, is scheduled to begin
operations in the summer of 2000. We and our French
partners will each hold 30% of the new company, while the
Spanish state holding company SEPI will have a 5.6% stake.
The remaining 34.4% will be offered to the public and traded
on the stock market.
Astrium, which is scheduled to begin operations in the first
half of 2000, will consolidate the space technology activities of
Matra Marconi Space (MMS) and Dasa. We expect Alenia
Spazio, a subsidiary of Finmeccanica (Italy), to also join
Astrium. Astrium will be one of the world’s leading space
technology companies and the biggest in Europe.
Purchasing
General Integration/
Finance /Services
Research and Development
Sales Organization/
Additional Sales
Total
Synergy savings 1999
in millions
99
€
520
370
80
420
1,390