- Mercedes Benz Cars & Vans constitute 85% of the Trefis price estimate for Daimler AG's stock.
- Daimler Mobility constitutes 15% of the Trefis price estimate for Daimler AG's stock.
WHAT HAS CHANGED?
At the virtual Extraordinary General Meeting on 1 October 2021, the shareholders of Daimler AG decided by on the historic realignment of the company.
The spin-off of Daimler’s commercial vehicle business and the subsequent listing of Daimler Truck Holding AG as an independent company on the Frankfurt Stock Exchange were approved by 99.90% of the capital stock represented for the resolution.
Furthermore, the shareholders also approved the renaming of
Daimler AG as Mercedes-Benz Group AG effective as of 1 February 2022. The new name emphasises the future focus on cars and vans of the brands Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach and Mercedes-EQ
- Latest Earnings
For Q3 2021 the company recorded revenue at $37.3 billion for continuing operations. The earnings were to $2.72 for the quarter.
Overall the company saw a 25% fall in sales volume to 577.8K vehicles sold for the quarter.
Mercedes-Benz cars and Vans saw a sales volume of 471K down 30%. Daimler Trucks & Buses saw a sales volume of 106K, up 7% for the quarter compared to the same period of the previous year.
Due to the pandemic many countries have locked down all non-essentials activities in their region. This has led to a many manufacturing units being closed down to control the risk of the pandemic. Sales grew in Q3 & Q4 as countries opened lockdowns and eased restrictions.
POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE
Total Mercedes Benz Cars Sold Globally:Growth in total Mercedes Benz Cars sold globally is strong and we expect this growth to continue over our forecast period. We expect this number to grow steadily once the coronavirus pandemic situation gets clearer. A faster growth can lead to a significant upside in our price estimate.
Daimler AG (Daimler) is the parent company of the Daimler Group. The company is engaged in the development, manufacturing, distribution, and sales of a wide range of automotive products but mainly, passenger cars, trucks, vans, and buses. Daimler has operations mainly in the US and Germany and sells its vehicles worldwide under various brands such as Mercedes-Benz, Maybach, Smart, Freightliner, Fuso, Western Star, Detroit Diesel, BharatBenz, Orion, and Setra.
SOURCES OF VALUE
The Mercedes Benz Cars division is the most valuable business for Daimler AG. It is more valuable than all the other divisions combined.
We estimate that high prices and unit sales of Mercedes Benz contribute the maximum value for its business. Mercedes Benz can fetch higher prices because of its strong brand name. It hopes to tap onto emerging markets such as China, India, Russia, and Latin America, to help increase sales and grow market share. The International vehicle market three-and-a-half times larger than the North American vehicle market.
Mercedes-Benz aims to penetrate the electric vehicle market
- Demand for electric vehicles is rapidly rising around the world mainly due to a relatively less harmful impact on the environment and lower running costs, as compared to gasoline-powered engines. In addition, governments around the world provide various incentives to boost electric vehicle sales. Moreover, plugin electric vehicles (PEVs) also have lower battery prices, adding to their appeal. However, sales of these vehicles haven't picked up as previously estimated primarily due to lower ranges, and lack of infrastructure supporting battery charging.
But with more and more companies developing electric cars with higher ranges and building charging stations, plug-in sales are expected to continue growing at a fast pace.
By 2022, Mercedes-Benz Cars aims to electrify their complete range of passenger cars. In total they plan to offer more than 130 electrified vehicles.
Fast growing luxury vehicle market in China to provide growth impetus
Consumption of young-generation consumers (ages below 35) is growing at 14% annually, which is twice that of consumers older than 35. The newer generation also typically has a more sophisticated taste, and is more free-spending. The growth in the upper-middle class and the emergence of the new generation is expected to increase sales of high-value products, including automobiles.