Articles for Daimler AG

Foreign Auto Makers Get Fewer Incentives in China as Country Promotes Competition

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Monday, January 9th, 2012 by Trefis Team

As auto makers start to announce positive strong growth from China, the country announced the end of its seven-year policy to attract foreign investments in order to promote a “healthy” level of competition and to protect local manufacturers. Since it is in China’s interest to acquire the latest fuel-efficiency technologies, it has exempted foreign investment in fuel-efficient technologies from this new policy. These new rules, which will go into effect from the end of this month, impact auto-manufacturers such as GM (NYSE:GM), Ford (NYSE:F), Honda (NYSE:HMC), Toyota (NYSE:TM) and Daimler (NYSE:DAI) all of whom have major expansion plans in the country. We don’t expect any meaningful impact in the near term production, though it could slow the expansion of production facilities for these auto makers.

We currently have a Trefis price estimate of $26 for General Motors, the largest auto-maker in China with plans to boost production capacity by 25 percent to 40 percent over the next two years in the country. Our price estimate for GM is more than 30% above the current market price.

Daimler’s Benz Sales in China to Suffer from US-China Trade Spat

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Tuesday, December 20th, 2011 by Trefis Team

Daimler AG‘s (NYSE:DAI) luxury car brand, Mercedes-Benz, recorded its best monthly sales ever in China in November, up 24 percent year-over-year. But the carmaker’s revenues from the China, Daimler’s third largest market, is now at risk from Chinese decision to levy punitive duties on U.S. imported cars in retaliation to the country’s failed attempt to block U.S. tariff on Chinese tires. Daimler’s Mercedes-Benz competes globally with BMW (GR:BMW), GM (NYSE:GM), Ford (NYSE:F), Honda (NYSE:HMC) and Toyota (NYSE:TM) among others.

While Daimler announced plans to invest about 2 billion euros into its joint venture with Beijing Benz Automotive Co. Ltd to expand its local production capacity in China, the company also produces many vehicles in the U.S. and plans to invest as much as $2.4 billion to expand production at its plant in Tuscaloosa, Alabama ((Mercedes-Benz Heading Toward New Production Record)) It has been reported that China will levy duties of 2.7 percent on sales of U.S. made vehicles of Daimler, which will hurt margins at Daimler’s Mercedes-Benz division, leading to further downside to our estimate for Daimler’s stock.

GM’s China Sales a Victim of US-China Trade Spats

We currently have a price estimate of $72 for Daimler’s stock, which is well above its market price.

Daimler Worth $72, But Europe’s Been a Drag

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Friday, December 16th, 2011 by Trefis Team

Daimler AG (NYSE:DAI) recorded its highest global monthly sales ever for Mercedes-Benz in November 2011, up 8.3 percent year-over-year (yoy), in spite of growing fears of an auto-market slowdown due to deteriorating economic environment. In China and the U.S., Mercedes’ largest markets after Germany, the luxury carmaker posted new sales record in November. Europe sales for Mercedes were supported by new models of the high-volume B-Class and the new M-Class, which were launched in November. However despite stellar performance in international markets, concerns remain as Daimler’s sales in Western Europe and especially in Germany, which is traditionally Mercedes’ largest market, declined year-over-year even after the support from new model launches. Daimler’s Mercedes-Benz competes globally with BMW (GR:BMW), GM (NYSE:GM), Ford (NYSE:F), Honda (NYSE:HMC) and Toyota (NYSE:TM) among others.

We currently have a price estimate of $72 for Daimler’s stock, which is well above its market price.

Daimler Rationalizes, Shuts Maybach to Focus on Mercedes

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Friday, December 9th, 2011 by Trefis Team

Daimler AG (NYSE:DAI) has decided to shut down its super luxury brand, Maybach, by 2013 and focus on its Mercedes brand instead. Ford (NYSE:F) has made similar moves in the past when it axed its Mercury brand to focus on Ford and Lincoln while GM (NYSE:GM) has dropped several of its brands to focus only on its four core products – GMC, Chevrolet, Buick and Cadillac.

Daimler’s super luxury Maybach and SL Class contribute around 7% to the company’s stock value, as per our estimates. Daimler is hoping to replace Maybach with new models of Mercedes S Class, which also competes in the super-luxury segment. We believe this can provide further upside to our price estimate not only as it cuts a decade of losses on Maybach but also as it boosts sales with concerted marketing efforts for the Mercedes brand. Daimler’s Mercedes-Benz competes globally with BMW (GR:BMW), GM, Ford, Honda (NYSE:HMC) and Toyota (NYSE:TM) among others.

Daimler Updates: Germany Auto Sales Drag on Global Strength, Maybach Shelved

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Wednesday, December 7th, 2011 by Trefis Team

Daimler AG (NYSE:DAI) stock has climbed more than 18% since the beginning of last week. During the week Daimler reported its highest global monthly sales ever for Mercedes-Benz in November 2011, up 8.3 percent year-over-year (yoy). But while Mercedes made impressive gains in the U.S. and China, the brand foundered in Germany which has traditionally been its largest market. Last week, the German auto-industry association, VDA, projected that auto sales in Germany as well as production by Germany carmakers will remain flat or decline in 2012. ((German Car Market Won’t Grow in 2012)) Thus Daimler’s sales and margins is likely to suffer in its home market in the medium-term. Daimler’s Mercedes-Benz competes globally with BMW (GR:BMW), GM (NYSE:GM), Ford (NYSE:F), Honda (NYSE:HMC) and Toyota (NYSE:TM) among others.

We currently have a price estimate of $72 for Daimler’s stock, which is much above its market price.

Daimler AG’s New Benzos Hit the Market

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Monday, November 28th, 2011 by Trefis Team

Two new Mercedes models landed in dealer lots the past couple of weeks, which could help boost Daimler AG’s (DAI) revenue from Mercedes-Benz cars in the coming months if sales trends continue. Daimler AG’s new B-Class and M-Class Mercedes-Benz, which customers have been able to order since July and September, respectively, were released on Nov. 19. Daimler also announced recently that it will launch its new Mercedes-Benz ML 63 AMG model in April 2012. Daimler is positioned to benefit from launching the new models if broader positive auto sales trends, especially in the U.S., continue. Automakers like GM (NYSE:GM) have been noting accelerated auto sales growth, with the industry noting a roughly 10% increase in sales through October. Total sales of Mercedes vehicles declined from 2007 to 2008 but have been increasing since 2009, and Trefis analysts project those sales will continue to increase through 2018 as its market share continues to increase. Read More »

New Model Launches Lift Daimler Earnings Though Economic Slowdown Looms

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Tuesday, November 15th, 2011 by Trefis Team

Daimler AG (ETR:DAI) recently reported a 19 percent year-over-year (yoy) decline in operating profits as the costs for launching new vehicles, adverse currency effects and higher raw material prices more than offset an increase in sales volume. While growth in revenues in Western Europe and North America remained sluggish in the last quarter due to deteriorating economic environment which hurt customer confidence, emerging economies such as China picked up the slack in demand. Even though we expect that new model launches will support Daimler’s vehicle sales in the near-term, deteriorating economic environment remains a threat in the medium term because customers might put off vehicle purchases as negative economic news-flow hurts sentiments. Economic growth in emerging economies also remains at risk in the near-medium term due to their increasing intertwinement with developed economies and also due to inflationary pressures in major developing economies leading to monetary tightening policy. Daimler competes globally with the likes of BMW (GR:BMW), GM (NYSE:GM), Ford (NYSE:F), Honda (NYSE:HMC) and Toyota (NYSE:TM) among others.

We currently have a price estimate of $72 for Daimler’s stock, which is much above its market price.

See our full analysis for Daimler’s stock here.

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China’s Love for Benzos Supports Daimler’s Outlook & $83 Estimate

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Tuesday, November 1st, 2011 by Trefis Team

For the first three quarters of 2011 Daimler AG (ETR:DAI) saw huge momentum and sales growth for their Mercedes-Benz brand in China. The 38% year-to-date growth continues a strong push into the Asian market in recent years. Mercedes-Benz was the fastest growing premium brand in China from 2007-2009 . The trend notably continues with the SUV family delivering year-over-year growth of 115%, the M-Class growing 90% year-over-year, and the flagship S-Class growing 41% year-over year. Daimler brands such as Mercedes-Benz, Smart, Maybach and Daimler compete globally with the likes of BMW (GR:BMW), GM (NYSE:GM), Ford (NYSE:F), Honda (NYSE:HMC) and Toyota (NYSE:TM) among others.

See our full analysis for Daimler
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Daimler Earnings Preview: What We’re Watching Friday

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Thursday, October 27th, 2011 by Trefis Team

As Daimler AG (NYSE:DAI) is scheduled to announce its Q3 financial results this week, many investors and analysts will pay special attention to the company’s sales outlook over the near-term given the tumultuous economic environment and sales of their new models. Over the last quarter, even though Daimler’s vehicle sales witnessed year-over-year (yoy) growth, the growth has decelerated in many markets such as China and Europe. Even though Mercedes-Benz sales in China might be bumpy in the near-term, we expect the country to re-emerge as a major growth opportunity for the luxury-car brand in medium-term based upon Daimler’s planned new vehicle launches. In Europe, we expect Mercedes-Benz sales will be supported in the near-term by the launch of new M-Class and the new B-Class in November. Daimler’s communication policy has been criticized previously as the reason for their stock declines even after they report solid earnings, and we will not be surprised if history repeats again. Daimler brands such as Mercedes-Benz, Smart, Maybach and Daimler compete globally with the likes of BMW (GR:BMW), GM (NYSE:GM), Ford (NYSE:F), Honda (NYSE:HMC) and Toyota (NYSE:TM) among others.

See our full analysis for Daimler’s stock here.

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Daimler’s Stock Jumps on Market Rally, Solid Sept. Sales

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Wednesday, October 12th, 2011 by Trefis Team

Daimler AG‘s (ETR:DAI) stock have rebounded by over 20% after hitting its 52-week low on Tuesday last week. We believe that the stock surge is a result of both improved sales reported by Daimler and broader rally in European equity markets on signs of a plan for the ongoing debt crisis. While September was the strongest month in terms of volumes for Daimler since the beginning of the year, Germany experienced a year-over-year decline of around 10%. Also, growth slowdown worries remain in China, world’s largest auto-market, where GM (NYSE:GM) holds the dominating market-share.