Mercedes 1999 Annual Report Download - page 34

OUTLOOK
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■Continued high profitability
■Revenues to increase significantly to about €167 billion in 2002
■€50 billion to be invested by the year 2002
■Almost 60 new vehicle models by 2005
FAVORABLE OUTLOOK FOR THE WORLD ECONOMY. We
expect generally favorable economic conditions in all of our
key markets throughout the planning period 2000 – 2002.
While growth in North America may slow somewhat at a high
level, it is likely to pick up in Western Europe. The Japanese
economy is recovering, although in the short term it may not
experience the dynamic growth of earlier years. Prospects for
the emerging markets of Asia have greatly improved and we
expect the economies of South America to begin to expand in
2000. For the countries of Eastern Europe, we expect moder-
ate growth over the planning period.
We also anticipate that the convergence of economic growth
rates in the US and Western Europe will lead to a stronger
euro on the international currency markets.
AUTOMOBILE DEMAND REMAINS HIGH. Given the anticipated
stable economic conditions on the world’s markets, we expect
the high sales volumes in automobile markets to continue in
the period 2000 – 2002. However, we expect a slight
reduction in demand for automobiles in North America and
Western Europe after the record-setting year of 1999. On the
other hand, demand is expected to increase considerably in
Asia and South America. Furthermore, the increasing
globalization of the automobile industry, as well as shorter
product cycles and growing pressures to reduce costs will all
act to accelerate the process of industry consolidation.
PROFITABLE GROWTH AT DAIMLERCHRYSLER. Due to our
attractive product range and high order backlogs, we expect
revenues in 2000 to increase to approximately €153 billion.
Despite more intense competition in the automotive sector, we
expect revenues to increase to €167 billion by 2002. This
forecast assumes a moderate appreciation of the euro against
the dollar, pound and yen. We plan to achieve our highest
rates of growth in Asia, South America and Eastern Europe.
A variety of new and attractive products will enable nearly all
business units to grow faster than the market over the coming
years. Strict cost management at all divisions and additional
synergies resulting from the merger will provide a strong
foundation for continued profitable growth. Of course, these
results are contingent upon the accuracy of our assessments
of how important markets and exchange rates will develop.
FURTHER GROWTH IN THE AUTOMOTIVE BUSINESS. The
Mercedes-Benz Passenger Cars & smart division will be
rounding off and updating its range of products throughout
the planning period. The new C-Class, which will be launched
in May 2000 and offered in five different model versions in
the coming years, will play an important role in helping to
strengthen the worldwide market position of the Mercedes-
Benz brand. The smart brand will also achieve greater
momentum in 2000 through the introduction of the extremely
fuel-efficient cdi diesel model and the smart City convertible.
In order to strengthen its position on the fiercely competitive
North American automobile market, the Chrysler Group
division will be renewing more than half of its product
portfolio over the next two years. The innovative and
unconventional PT Cruiser, which will be available in spring
2000, has defined a new market segment and is opening up
new opportunities for growth. In addition, the new generation
of Chrysler and Dodge minivans, which we will be launching in
the fall of 2000, will further strengthen our lead in this
segment.
In order to ensure continued profitable growth and expand its
share of the world market, the Commercial Vehicles division
will take greater advantage of the benefits offered by interna-
tional networks. We also want to maintain our technical
leadership and to extend the range of services we offer in
connection with commercial vehicles. Our new small van, the
Vaneo, will open up additional opportunities. The Vaneo is
DaimlerChrysler’s first commercial vehicle in the high-growth
segment of less than two metric tons gross vehicle weight.
INCREASING REVENUES AT OTHER DIVISIONS. The Services
division is once again heading for above-average growth. The
Financial Services business unit will focus on expanding
leasing and financing services for both DaimlerChrysler and
non-DaimlerChrysler products. While the IT Services business
unit will concentrate on strengthening its international
presence even further, we are also considering strategic alter-
natives for this business.
On the basis of a high volume of outstanding orders,
particularly for civil aircraft, we expect revenues at the
Aerospace division to increase over the coming year. In order
to meet delivery deadlines for Airbus jets, we plan to increase
annual production from 288 aircraft in 1999 to more than
350 in 2002. The merger of Dasa, Aérospatiale Matra and
CASA to form the European Aeronautic Defence and Space
Company (EADS) creates the third-largest aerospace company
in the world and the largest in Europe. EADS will enjoy a
considerably stronger competitive position on the global
market than did its individual founding companies.
Profitable growth
O U T L O O K