Mercedes 2010 Annual Report Download - page 73

Management Report | Business and General Conditions | 69
The new Board of Management function is a logical step in the
further development of the corporate structure and culture.
In this context, Daimler’s Board of Management has decided to
push forward with its compliance activities – including its rela-
tions with business partners. The Daimler Group is currently rep-
resented in 200 countries either with its own companies or
through its business partners. Maintaining correct business prac-
tices in conformance with applicable laws and regulations requires
an appropriately trained compli ance organization with a world -
wide reach as well as effective processes and controls. At the
same time, it is and it will remain the task of the entire Board of
Management and of all executives to permanently anchor through-
out the Group a keen awareness of adherence to the law and
regulations, as well as for business ethics (see pages 158 f).
Economy and the industry
The world economy. With growth of 4.0%, the world economy
displayed astounding dynamism in overcoming the recent reces-
sion during 2010, with growth in economic output exceeding
the prior-year level already in the summer. The main drivers of this
positive development were the rapidly growing emerging econo-
mies, whose gross domestic product expanded by almost 7%.
Although the industrialized countries posted solid growth rates
with an aggregate increase in economic output of about 2.5%,
with few exceptions they were still significantly lower than the
rates of expansion attained in 2007 and 2008. Among the indus-
trialized countries, economies with a strong dependence on
exports and investment goods such as Germany (3.6%) and Japan
(4.2%) profited the most from the global recovery and the result -
ing significant revival of world trade. Growth in the more mature
economies was generally boosted by the continuation of very
expansive monetary policies and the effects of the massive stim-
ulus programs of the previous year. Other factors were special
and one-time effects such as restocking inventories that had been
depleted during the recession. But the world economy’s overall
growth dynamism slowed down again significantly as the year
progressed.
One negative factor in spring was the high budget deficit in
Greece and the debt problems of other European countries. The
financial markets reacted with sharp fluctuations and investor
and consumer uncertainty increased again. The governments of
the European Union together with the International Monetary
Fund were finally forced to set up a comprehensive safety net,
which Ireland was then the first country to make use of in
November. Already in the summer months, concerns about the
stability of the upswing and fears of a renewed slip into recession
increased significantly. There was a particular focus on the US
economy due to its relatively low overall growth and ongoing
high unemployment rates. In autumn, the US Federal Reserve
therefore announced the loosening of its already very ex -
pansive monetary policy and in December, the government and
the opposition agreed on new financial-policy supporting actions.
Over the year 2010 as a whole, the US economy achieved growth
of 2.9% due to a revival in the fourth quarter. As in the previous
year, the emerging economies and above all China and India were
significant growth drivers in this rather uncertain environment.
It was also important for global developments that the Chinese
economy looked less likely to overheat, with its growth rate
decreasing moderately to a more sustainable level. However, the
intensifying debate about exchange rates not reflecting market
realities was a very critical factor. This discussion centered mainly
on the Chinese yuan, but also on the US dollar. Although the G20
summit meeting in Seoul in mid-November at first prevented any
further escalation, no sustainable solution was reached to
resolve the global imbalance.
In this environment, exchange rates were very volatile again.
The US dollar at first strengthened from $1.44 to a euro at the
beginning of the year to $1.20 in mid-2010, but then weakened
again by autumn to a parity of $1.40. At the end of the year, the
value of the euro measured in US dollars was 7% lower than
a year earlier at $1.34. With fluctuations, the euro also fell against
the Japanese yen by 18% in 2010. Compared with the British
pound, the euro fell by 3% over the year, also with sharp
fluctuations in value.
2009
2010
6
4
2
0
-2
-4
-6
NAFTA JapanJapanOther
markets
-8
8
10
Economic growth
Gross domestic product, growth rates in %
Total Western
Europe
Asia excl.
Source: Global Insight
region