Daimler (PINK:DDAIF) registered record breaking fourth quarter earnings thanks to buoyant sales growth of Mercedes cars in the U.S. and China. The company sold a total of 2.1 million vehicles in 2011, registering a more than 10% increase in unit sales over prior year. The company was able to capitalize on the recent surge in demand in North American market which has also served as a savior for automakers like Ford (NYSE:F) and Chrysler in 2011. However, the company expects earnings in 2012 to be flat because of the debt crisis afflicting the Europe, resulting in relatively weaker demand in these markets. 
Mercedes Luxury Brand is the Star Performer
- Mercedes-Benz Is The Number One Premium Automaker: How It Happened
- The Year That Was: Daimler
- A Closer Look At The Automotive Landscape: Is Honda Doing Better Than Toyota?
- Mercedes-Benz Spearheads Growth For Daimler In Q3 As Daimler Trucks Witness Sales Decline
- Mercedes’ Strong SUV Lineup Is Helping It Weather The Storm In The US Automotive Market
- Why Daimler Is Valued More Than Volkswagen Despite Selling Far Fewer Vehicles
Mercedes-Benz cars, comprising the brands Mercedes-Benz and Smart, registered sales of about 1.4 million vehicles, an 8% increase over the prior year. The company largely benefited from the surge in demand in the U.S. and China where it registered a rise in sales of 41% and 62% respectively. However, the weak demand in Europe played a spoilsport, where the company saw the demand going down by more than 20%. 
The company also expects to add at least 10 new models to its existing portfolio by 2015 to maintain the market share in key emerging markets, as well as in North America and keep the rivals like BMW and Audi at bay.
Strong Performance by Daimler Trucks
The strong show by Mercedes brands was aided by an incredible 20% growth in sales of Daimler Trucks, resulting in a similar growth of 20% in revenue over 2011. The company was able to register more than 10% growth in sales in Europe despite the slowdown in the overall economy. However, the sales growth in NAFTA region was astonishingly high at 48% over the prior year.
With the world market share of Western Europe and North America is expected to decline relative to sharp rise in demand in the emerging markets, the company has prepared different strategies to benefit from this shift in trend. It introduced BharatBenz, focused on the Indian market to take on the challenges posed by regional players like Tata Motors and Ashok Leyland. The company is targeting a sale of 5 million units in 2013 and 7 million units in 2020. 
Ambitious Plans For Global Sales
The company has set its sight on the emerging Asian markets, Japan and North America for growth in the next year. Daimler expects to beat its existing sales numbers in the next year and has set a long term target of selling 1.6 million cars in 2015. Given the recent surge in demand of Mercedes brands in U.S. and emerging markets, the target seems well within the reach for the company.
Our price estimate for Daimler stands at $66, which is under review. The current estimate implies a slight premium to the market price.Notes: