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In Western Europe, the debt crisis and the resulting spending
cuts are having a negative impact on total growth potential.
Some economies, such as Greece, will therefore remain in the
recessive phase. On the other hand, according to the more
positive economic indicators at the end of the year, the outlook
for the German economy has brightened considerably so that
the country’s growth is expected to be significantly higher than
the European average. Against this backdrop, the aggregate
growth rate for the industrialized countries is likely to fall slightly
to approximately 2 to 2.5% in 2011, whereby indi vidual countries’
rates will differ. Once again, substantially more impetus to the
world economy will come from the emerging markets, which
should expand at about two and a half times that rate. However,
there have been signs in recent months of a slight growth
slowdown also for those economies, especially in Asia and South
America. In the case of China, a somewhat lower growth rate is
actually desirable in view of the significant expansion of credit
volumes and regional real-estate bubbles. In total therefore,
global economic output could expand in the year 2011 by approxi-
mately 3.5%. But due to ongoing consumer and investor
uncertainty in many countries, the world economy remains
rather fragile and thus also sensitive to external disturbances.
Automotive markets
According to current estimates, worldwide demand for motor
vehicles will continue to grow this year, but no longer as dynami-
cally as in 2010. The global car market could expand by 5 to 7%,
thus reaching a new record volume. The Asian emerging markets
and in particular the Chinese market will continue to play a major
role. China’s importance also for the German premium manufac-
turers will continue increasing this year. But the outlook remains
mixed for the triad markets of Western Europe, the United States
and Japan. The US market should continue its recovery, while
the best that can be expected for car sales in Western Europe
is that they remain at the prior-year level.
The statements made in the Outlook section are generally based
on the operational planning of Daimler AG as approved by the
Board of Management and Supervisory Board in December 2010
for the years 2011 and 2012. This planning is based on premises
regarding the economic situation, which are derived from assess-
ments made by renowned economic institutions, and on the
targets set by our divisions. The prospects for our future business
development presented here reflect the opportunities and risks
offered by anticipated market conditions and the competitive
situation. We are constantly adjusting our expectations, taking
into account the latest forecasts on the development of the world
economy and of automotive markets as well as our recent busi-
ness development. The statements made below are based on the
knowledge available to us in February 2011.
World economy
At the beginning of the year 2011, most leading indicators suggest
that the global economic upswing will continue. However, there
are also signs that the rate of economic expansion is likely to be
somewhat weaker than in 2010. The ongoing uncertainty in
financial markets is evidence of continued concern about the
sustainability of the upswing. Particularly in the industrialized
countries, the economic outlook is rather modest. The spending
cuts initiated due to high state deficits will be a great challenge
for many countries. And as financial consolidation is an important
issue also in the private sector, the overall negative impact on
total economic demand is significant. Higher levels of unemploy-
ment in many countries, tight real-estate markets and under-
utilized production capacities are restricting the growth of private
consumption as well as investment. As world trade has also lost
some of its impetus and is no longer growing as fast as last year,
foreign trade cannot fully compensate for the weakness of other
components of economic growth. This is especially relevant for
export-oriented economies such as Germany and Japan, both
of which gained a substantial contribution to overall growth from
foreign trade in 2010. In the United States, employment should
continue increasing in the private sector, but the gains will proba-
bly be too small to reduce unemployment to a significant extent.
But private consumption, a key economic driver, should be stimu-
lated by the recently approved tax changes, which has now signi-
ficantly improved the prospects for growth in 2011. The effects
of the substantial expansion of the money supply and the ongo-
ing increase in government debt on the US economy remain to
be seen, however.
Outlook