Marque’s revenue, car sales on the up
Mercedes-Benz SA and its other Daimler companies had a good year in 2014, writes Mark Smyth
MERCEDES-Benz SA set itself a goal “to be the undisputed market leader in 2015”, said its CEO Arno van der Merwe at a media briefing to announce its results. It is a goal that it clearly set its mind to because it achieved the number one position in the premium passenger car market a year early in 2014.
“Last year was a year in which we wowed the market with product, labour and industrial relations,” said Van der Merwe. However, it was also a year in which the company stopped reporting its sales figures to the National Association of Automobile Manufacturers of SA (Naamsa). Executives at the briefing refused to be drawn on the matter in spite of being bombarded with questions from various members of the media. Instead, the matter was sidestepped with the response being “we are not legally required to do so”.
The company says that it is supplying its figures to the Department of Trade and Industry rather than Naamsa, and that it is waiting for a proposal from the department on how the industry should report its figures. It is a situation that does not sit well with the rest of the industry, with many referring to it as anticompetitive.
The company did have a good year in 2014 though with revenue up 5%. While passenger car sales rose for the brand in contrast to a declining market, the company saw its truck sales drop. According to chief financial officer Herbert Werner this was “mainly due to the exchange rate. To tackle the impact we increased prices significantly.”
The company also faced labour issues in a year when it launched the new C-Class which it builds for the local market and for export.
To recover after the protracted strikes, the company has now implemented a permanent third shift at its East London plant. The company also invested more than R41m in training and was rewarded when the plant received its sixth consecutive JD Power and Associates Quality Award.
Also, 2014 was the best year yet for its financial services division, but one of the biggest surprises was that it was a great year for its performance car. Sales of the performance AMG models rose by a huge 63% to 1,604 units, ensuring SA retains its position as one of the biggest AMG markets in the world. This year it will also open a new AMG Driving Academy at premises being built at the Zwartkops Raceway near Pretoria.
For 2015 the company is expecting and planning for lower profit but significant business growth, according to Werner. It will increase its C-Class production and will also introduce a number of new products including a plug-in hybrid version of its luxury S-Class. For now it is avoiding the electric vehicle route being taken by BMW.
This year it will launch its compressed natural gas buses in SA as well as launching the latest generation of its popular Actros truck range which has been eagerly anticipated by the market.