Mercedes 2010 Annual Report Download - page 122

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Capital expenditure
In the coming years, we will continue to concentrate our invest-
ment budget on projects of particular importance for the market
success of our products. Nonetheless, we will significantly
increase our investment in property, plant and equipment in the
years 2011 and 2012. This reflects on the one hand the far-
reaching technological transformation of the automotive industry,
in which we intend to play a leading role; but on the other hand,
also the need to penetrate future growth markets with appropriate
products and local production facilities. At both Mercedes-Benz
Cars and Daimler Trucks, the planned investment in property,
plant and equipment will be significantly higher than in the prior
years. At the Mercedes-Benz Cars division, the focus will be on
advance expenditure for new vehicles such as the successor
models to the A- and B-Class and the new M-Class. The biggest
current project is the expansion of our model range in the A/B-
Class segment: Solely for that purpose, we will invest a total
of approximately €1.4 billion at our sites in Rastatt and Keçskemèt,
Hungary. But substantial investments are also planned for the
expansion of our production capacities in the United States, China
and India. Daimler Trucks will mainly invest in successor genera-
tions for existing models in the coming years. Another area
of investment will be to establish and expand production capacities,
in order to penetrate the Indian market for example. At Mercedes-
Benz Vans, the focus will be on investing in cooperation projects
with Renault, in local production of the Sprinter in Russia, and
in existing production plants. The key projects at Daimler Buses
are advance expenditure for new models, future emission tech-
nologies and alternative drive systems.
Investment in property, plant and equipment
2009 2010 2011-2012
In billions of euros
Daimler Group 2.4 3.7 10.1
Mercedes-Benz Cars 1.6 2.5 6.1
Daimler Trucks 0.6 1.0 3.2
Mercedes-Benz Vans 0.1 0.1 0.5
Daimler Buses 0.1 0.1 0.3
Daimler Financial Services 0.01 0.01 0.02
Fundamentally, there are also good chances of a generally more
positive development of the world economy. If inves tors and
consumers very quickly regain confidence in the firmness of the
upswing and this is also reflected in the form of increased demand
and investment, growth rates could be significantly higher, partic-
ularly in the industrialized countries. This applies above all if the
banks support the upswing with appropriately increased lending
and if the dampening effects of state financial consolidation
are less significant than assumed. A rapid return to stability in
the financial markets is another factor that could support the
global upswing.
Such a scenario would result in the possibility of a significantly
more favorable business development at Daimler in the years
2011 and 2012. We see opportunities for additional unit sales
and earnings in particular if the mature automotive markets of
the triad markets of North America, Western Europe and Japan
return faster than generally expected to their volumes of the
record years 2007 and 2008.
In the medium term, additional growth potential will be presented
above all by the expansion of our presence in Asia and Eastern
Europe. Our local activities there will enable us to utilize those
opportunities. Together with our local partners, we are increasing
the production of cars and vans in China and are now preparing
to establish a truck joint venture which will include the produc-
tion of heavy-duty truck engines. We are also expanding our pro-
duction facilities for cars and setting up a new truck plant in
India. In Russia, we are intensifying our partnership with truck
manufacturer Kamaz, and have signed a memorandum of under-
standing on production of the Sprinter with GAZ. In addition, we
have started construction of a new car plant in Hungary. We see
good prospects for additional growth also in Latin America and
emerging markets such as Indonesia, Vietnam and Thailand.
Furthermore, there will be considerable opportunities in the
medium term also from the upcoming fundamental changes
in automotive technology. If we succeed in our aim of playing
a pioneering role for motor vehicles and concepts for sustainable
mobility with innovative technologies, this should give us additional
growth potential in terms of both unit sales and earnings.
Mercedes-Benz Cars 60%
Daimler Trucks 32%
Mercedes-Benz Vans 5%
Daimler Financial Services 0.2%
Investment in property, plant and equipment 2011–2012
In %
Daimler Buses 3%