Daimler’s New Trucks Chief Sets Sights on No. 1 SpotChristoph Rauwald
Daimler AG’s new trucks chief Wolfgang Bernhard aims to beat rivals Volvo AB and Scania AB in more than just sales in a bid to secure the industry’s top spot.
“Our shared goal is to make Daimler Trucks and Daimler Buses the number one in the commercial-vehicle sector -- in every way,” Bernhard said in a one-page letter in German and English e-mailed to staff and obtained by Bloomberg. It was his first companywide message since taking over the position April 1. A Daimler representative declined to comment on the letter.
Closing the earnings gap to Daimler’s truck-making peers would increase Bernhard’s chances of eventually succeeding Dieter Zetsche as the Stuttgart, Germany-based automaker’s chief executive officer. Zetsche, who turns 60 next month, received a three-year contract extension in February.
Daimler, the largest maker of commercial vehicles by revenue, is lagging behind Volvo and Scania in profitability. The truck division scrapped plans last year to increase earnings before interest and taxes to at least 8 percent of sales by 2013 after posting a 5.5 percent margin last year. Scania’s operating profit margin was 14 percent, while Volvo’s was 5.8 percent, according to data compiled by Bloomberg.
To close the gap, Daimler’s trucks division began a program in June to lower costs by 1.6 billion euros ($2.1 billion) by the end of next year.
Bernhard, who was previously in charge of production and purchasing at Daimler’s Mercedes-Benz car division, said in the letter that he intends to continue his predecessor’s course. He swapped responsibilities with Andreas Renschler this month.
“What I have seen so far has shown me just how much you have set in motion in recent years,” he said, citing the new heavy-duty Mercedes-Benz trucks, new engine generations and steps to streamline costs and improve efficiency.
Ebit at Daimler trucks fell 9 percent to 1.71 billion euros last year, even as revenue climbed 9 percent to 31.4 billion euros. After selling 462,000 trucks in 2012, the manufacturer targets more than 500,000 deliveries in 2015 and 700,000 vehicle in 2020 by expanding in India, Russia and China.