Mercedes-Benz SA consolidates market leadership positions
Dr Martin Zimmermann, MBSA CEO and President:
“In 2011, MBSA with market leadership in four major segments.”
“Group revenue 2011 continues growth path.”
“2012 will see MBSA to grow further and solidify its market leadership.”
Pretoria – The Mercedes-Benz group of companies in South Africa has posted positive financial results for 2011, with a total annualised revenue of R34.9-billion, a 4% growth over the previous year.
“Mercedes-Benz South Africa (MBSA) has maintained its growth trajectory despite a year characterised by the fact that the majority of our fascinating new products only entered the local market in the last six months of 2011 – among them MBSA’s core product and volume seller, the C-Class,” said MBSA CEO and President, Dr Martin Zimmermann, presenting the group’s results to the media at the Mercedes-Benz Menlyn Brand Centre.
Reporting their 2011 sales and financial performance, Mercedes-Benz South Africa (MBSA) with its subsidiaries Mercedes-Benz Financial Services (MBFS), Daimler Fleet Management (DFM), Sandown Motor Holdings and Atlantis Foundries, recorded a strong overall share of market with a leading position in four major segments. MBSA took the lead in the premium and luxury passenger car market with its Mercedes-Benz brand, with Mercedes-Benz commercial vehicles as the overall truck market leader, Freightliner as the dominant force in the long-haulage truck segment, and Mercedes-Benz Vans in the transporter segment (excluding mini-taxis). It also achieved a solid Number 2 position in buses, and a leading position in the South African fleet management market.
With a 2011 contribution of over R30 billion to the South African economy, MBSA is a significant partner in the growth and development of the country. Over the last 10 years alone, Daimler has invested in excess of R5-billion in its South African operations. Our corporate social investment spend, at R17-million, is amongst the highest from the private sector in the country.
Furthermore, MBSA features amongst the leaders in the automotive sector with regard to BBBEE. “Our progress over the years has been exceptional, especially with Sandown Motor Holdings moving to a Level 3,” Zimmermann said.
Dr. Martin Zimmermann:
- “While sales development has not lived up to our expectations due to a weaker than expected market, we are satisfied to have regained leadership of the premium and luxury passenger car market with our Mercedes-Benz brand.”
- “In 2012 we foresee further growth for MBSA as we will have the first full year of the new generation of our exciting C-class, the C-coupé and the CLS, while we introduce the all-new M-Class and B-Class as well as the new SL.”
“We are most encouraged that we regained our leading position in the premium passenger car market,” explained Dr Zimmermann, “especially significant for us in the year when we celebrated 125 years as the inventor of the automobile.
“While we had anticipated a very challenging year, we are delighted with the magnificent sales performance in the latter half of the year, when our new-generation C-Class came storming back to take the lead in its segment. This serious contender helped establish a record December result of almost 40 % above December 2010.”
An unprecedented product offensive, with the introduction of eight fascinating new models to the market, injected a great level of excitement for South African customers.
The unique combination of fascinating design, industry-leading quality and safety, innovative technologies with a huge focus on environmental protection, and benchmark residual values that are typical for Mercedes-Benz, all proved too strong for the competition in 2011.
Mercedes-Benz Positive outlook for 2012
With the new-generation C-Class, the C-Coupé, the CLS and the SLK all having their first full sales year, and three additional exciting models due for introduction in 2012, MBSA expects significant further growth for 2012. The all-new B-Class and M-Class models will be introduced in the 2nd quarter of 2012, with the new SL coming later during the year.
Dr Zimmermann said: “We base our growth in the passenger car market this year on the assumption that the market growth will slow down considerably compared to 2011, but we are confident that Mercedes-Benz will continue its South African success story by further growing our business in this country and entrenching our leadership as the premium luxury brand.”
Supported by the widest dealer network of all the premium brands, customers in South Africa, Namibia, and Botswana can be sure of receiving the professional support they deserve, both from a sales as well as from a service perspective. The latest customer satisfaction studies clearly confirm that Mercedes-Benz and its dealers are fully committed to further improving customer experience in all areas.
MERCEDES-BENZ COMMERCIAL VEHICLES
Dr. Martin Zimmermann:
- “One in every four commercial vehicles sold in South Africa is from the MBSA stable.”
- “MBSA continues to clearly lead the commercial vehicle market in the European truck, American truck and Van segments.”
- “Our value-add strategy is obviously paying dividends for our commercial vehicle sales.”
Strong sales at MBSA saw the automotive giant end 2011 as the undisputed leader in the South African commercial vehicle market, with an overall increase of 13.7% to 7,035 units. One in every four commercial vehicles sold in South Africa comes from the commercial vehicle portfolio of MBSA, which includes Mercedes-Benz Trucks, Vans, and Buses; Freightliner; Western Star; and Mitsubishi FUSO.
“We are delighted with the performance of our commercial vehicle portfolio,” said Dr Zimmermann. “The exceptional volume increase in a strongly growing market indicates that our value-chain focussed strategy was the right way to go to cement our market dominance.”
The underlying market drivers in the transport industry were consistently strong throughout 2011. “This was especially evident in the extra-heavy commercial vehicle market segment, where we have seen an increase of nearly 40% over last year’s figures. We are the biggest seller in this segment and pleased with the performance of all our brands.”
New driver training programmes, offered on all commercial vehicle brands, contribute to the development of bus and truck drivers. “This gives us the peace of mind that we are contributing to safety on our roads,” Dr Zimmermann adds.
Value-chain expansion augurs well for market growth in 2012
For 2012, MBSA looks forward to another year of growth and strengthening of its commercial vehicle market leadership. “We are starting to see very positive indicators; all as a result of our increasing focus on all the lifecycle-cost-reducing measures and programmes. MBSA, with its broad portfolio of service offerings from vehicle financing and insurance, CharterWay, FleetBoard, Uptime and fleet management services, is uniquely positioned to benefit from this development,” says Dr Zimmermann.
In addition, the TruckStore brand, which was launched at the Johannesburg Motor Show late last year, will come to fruition in July 2012. TruckStore will cater for all commercial vehicle customers with a large model mix, in-house finance, insurance, warranties and a number of service offerings for used truck trade-in and sales. The first facility will be one of the largest, most innovative and comprehensive pre-owned facilities in the southern hemisphere, and construction will start at the end of this month (February 2012).
Dr Zimmermann confirmed the MBSA commitment to sustainable mobility: “We will pursue lower sulphur fuel, as well as all opportunities to introduce lower emission transportation, be that electric, gas or hybrids. We are at the forefront of these developments globally, and can support these proven technologies here in South Africa.”
“We find that we have a growing number of customers who are requesting a greener transport solution. We are committed to achieving a positive reduction of our carbon footprint and a large part of this can be achieved by using cleaner emission vehicles. We believe business will drive the environmental issue in South Africa ahead of legislation in the short term.”
Dr Zimmermann concluded: “Generally, and in cooperation with the industry, we will continue to strengthen our call for improved fuel quality and will pursue opportunities which contribute to better road and driving safety.”
Dr. Martin Zimmermann:
- “Mercedes-Benz plant in East London remains a consistent world-leading quality producer.”
- “Commitment to supplier development will boost local content capacity.”
“The 2011 production of Mercedes-Benz C-Classes of 54,312 units was a new C-Class production record (compared to 52,201 in 2010). Expectations are that 2012 production will significantly exceed that of 2011.”
“For the third year in a row, the manufacturing plant won the prestigious Gold Award of J.D. Power and Associates, proving that world-class operations can be established in South Africa, something of which we are certainly very proud. It also assures our South African customers that they will not only get the best product available, but will be contributing to shaping a bright future for South Africa as a whole.”
Dr Zimmermann expressed MBSA’s long-term commitment not only to sell vehicles to local customers, but also to use South Africa as a production hub for both domestic consumption and substantial export business – a part of the operation which is bound to grow with the production of the next-generation C-Class. Accordingly, MBSA started construction work at the end of 2011, executing the plan to almost double C-Class production capacity in East London by 2014.
“With this investment, we are building on our ambition to secure and create more jobs, and to invest in both our East London plant as well as in our people,” added Dr Zimmermann.
In support of the ADPD, MBSA is driving supplier development and an increase in local content to further cement its investment into the growth of the country. “We need to ensure that global competitiveness is not hampered by technology or efficiency gaps, and so we are rolling out plans to support our suppliers with lean manufacturing training and skills development,” said Dr Zimmermann.
“Concerns regarding port and rail infrastructure living up to the increased capability of developing suppliers to export commodities efficiently is also being addressed at industry level. We are therefore heartened by the commitment by President Jacob Zuma in his State of the Nation address to improve infrastructure and reduce port costs for manufacturers of export goods.”
“An improvement in the export capacity of our ports, combined with the sustainable electricity at reduced costs announced by President Zuma, will count in the favour of economic growth,” Dr Zimmermann added.
Mercedes-Benz CORPORATE SOCIAL INVESTMENT
“At MBSA we aim to live up to our responsibility to society. For years we have been fully committed to the development of communities,” Dr Zimmermann said.
In 2011 our corporate social investment (CSI) strategy focussed on education, safer communities, HIV/AIDS, and the environment. “We have created both national and regional opportunities for investment in long-term projects designed to impact on a variety of socio-economic ills.”
The CSI programme saw its ambit expand last year to include employee volunteerism, involving MBSA staff in projects on a voluntary basis to a larger degree. “Feedback from the initiative confirms that the ethos of our social investment rings true to our corporate values, and the pledge to impact on the transformation of South African society is something that carries the support of all at MBSA.”
“The biggest portion of our CSI budget is allotted to Education, which we believe plays a pivotal role in both the social and the economic upliftment of a developing society such as ours. Our projects start at Early Childhood Development and continue all the way up to tertiary and Adult Basic Education and Training level,” said Dr Zimmermann.
“2012 will see a strengthening of this focus on Education and Skills Development, with roughly half of our budget spent in this area. This follows on our conviction that we will be able to make the strongest impact in this area as we have, along with our social partners, created projects that can be successfully replicated to benefit larger numbers of individuals.”
This focus is in line with national government imperatives for 2012, as announced by the President in his State of the Nation speech recently.
Mercedes-Benz Group 2011 results in brief
Revenues (2011 annualised) R34.9-billion
Employees as at end Dec. 2011 – 6,034
Vehicle manufacturing in East London
Mercedes-Benz C-Class: 54,312 units
Commercial vehicles: 4,830 units
Buses: 180 units
About Mercedes-Benz South Africa
Mercedes-Benz South Africa (MBSA) is a wholly-owned subsidiary of the global company, Daimler AG. The company’s manufacturing plant is based in East London, a plant which has been building vehicles in South Africa since 1948.
Today MBSA manufactures Mercedes-Benz C-Class cars in right-hand drive for the local market and in left-hand drive execution for export to the United States of America. It also produces Mercedes-Benz commercial vehicles and buses, Mitsubishi FUSO trucks, as well as assembles Freightliner trucks, a leading American brand. The company also imports, distributes and markets other Mercedes-Benz passenger cars, trucks and vans, as well as smart cars.
The headquarters of MBSA are located in Zwartkop, Pretoria. The Mercedes-Benz East London plant, has been recognised over the past six years for its consistently high levels of quality manufacturing as evident from the various international J.D. Power and Associates awards internationally and the Synovate customer surveys locally. The MBSA’s plant was awarded the Platinum Award as the “best car manufacturing plant in the world” in the 2010 J.D. Power Initial Quality Survey conducted in the US.
In December 2010 parent company, Daimler AG, announced a further R2.5-billion investment in the South African operations, which will be one of four production sites for the next-generation Mercedes-Benz C-Class.