Mercedes 2013 Annual Report Download - page 139

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C | Combined Management Report | Outlook
With regard to the currencies important for our business, we
continue to anticipate sharp exchange-rate fluctuations in 2014.
Compared with the average exchange rates in the year 2013
(USD/€: 1.33; GBP/€: 0.85), we anticipate a trend of slight depre-
ciation of the US dollar, while the British pound should remain
fairly stable against the euro. With regard to the Japanese yen
(average for 2013: 130 yen/euro) and exchange rates impor-
tant to us of various emerging markets, we assume that those
currencies will depreciate once again.
In order to counteract the risks arising for our business
as a result of the still very volatile exchange rates, we conduct
hedging transactions as far as this makes sense for the
various currencies. For the year 2014, we have hedged well
over half of the exchange-rate risks as of mid-February.
Automotive markets
The more favorable economic outlook should result in further
growth in global demand for cars in 2014. From today’s
perspective, demand is expected to rise by a rate of 4 to 5%.
The Chinese market should once again make the biggest
contribution to global market growth. Following the strong
increase in the previous year, further expansion of the car
market by approximately 10% should be possible. The US market
is also likely to grow. Although its growth will probably be
more moderate than in 2013, the US market volume should
expand to about 16 million passenger cars and light trucks
– a volume that was last reached in 2007 before the worldwide
financial crisis.
After significant contraction of the overall Western European
car market lasting several years, we expect a hesitant market
recovery in 2014. Thanks to the continued reduction of risks
from the sovereign debt crisis and a slight economic revival,
an improvement of the demand situation is anticipated in some
major markets. Demand should revive again somewhat also
in Germany.
Demand for cars in Japan is expected to fall, however.
This has less to do with the economic outlook than with the
increase in value-added tax planned for April. Considerable
volumes of purchases were therefore brought forward to the
second half of 2013, so a market correction is to be
expected this year.
In the major emerging markets (except China), another weak
demand situation is anticipated following the weak market
development of last year. The Russian market should be slightly
larger than in the previous year and we expect a moderate
recovery of the car market in India.
After the world market for medium- and heavy-duty trucks
expanded slightly in 2013 despite difficult market conditions,
further moderate growth is expected this year. But market devel-
opments will continue to differ significantly from one region
to another.
In the NAFTA region, we anticipate significant market growth
of up to 10% due to the increasingly dynamic economy.
Decreasing uncertainty with regard to fiscal policy should
be a factor contributing towards the gradual end of
the lack of demand in the market over the coming months.
The development of the European market in recent months
was primarily affected by the introduction of the Euro VI
emission standards. Purchases brought forward had a very
positive influence on demand towards the end of 2013.
Recently, however, this special effect has started to subside.
Developments during the rest of 2014 will depend in parti-
cular on the extent to which the economic revival in Europe
can offset the negative impact of the purchases brought
forward. From today’s perspective, we expect the market volume
for the full year to be slightly below the level of 2013.
Ongoing economic stimuli and an expansive monetary policy
should continue to have a positive effect on the Japanese truck
market in 2014; slight growth is anticipated for light-, medium-
and heavy-duty trucks overall. The Brazilian market for medium-
and heavy-duty trucks is likely to be just below the prior-year
level, primarily due to the below-average development of invest-
ment activity and somewhat less favorable financing condi-
tions. In Russia, demand for trucks is likely to recover slightly.
The Indian market should stabilize after the significant losses
of the previous years. China, the world’s biggest market for
trucks, should post moderate growth.
Overall, we anticipate stable demand for medium-sized and
large vans in Europe in 2014, whereby market developments
will differ greatly in the various countries. Also for small
vans, we expect to see a market volume in Europe in the mag-
nitude of the previous year. For the United States, we anti-
cipate a significant increase in demand in the market for large
vans in 2014. In Latin America, the market for large vans
should also continue to expand, and we anticipate a further
revival of demand also in China in 2014.
We expect a slightly larger market volume for buses
in Western Europe in 2014 than in 2013. In Latin America,
we anticipate stable demand for buses. The market for
buses in Brazil should remain at a good level in view of the
upcoming soccer World Cup in 2014.