Mercedes-Benz South Africa Annual Business Results

Mercedes-Benz South Africa Annual Business Results
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A year of robust sales and of record exports laying the foundation for continued success

• Mercedes-Benz Cars outselling competition in tough economic conditions
• Daimler Trucks and Buses first to market with Compressed Natural Gas buses,
opens Regional Centre Southern Africa
• Mercedes-Benz Vans increases market share in competitive market
• Mercedes-Benz Financial Services with acquisitions surpassing all records and
securing 7% growth to end above R10bn
• Record production and exports from East London plant – contributes to overall
jump in group of companies’ revenue of 45 percent
THE Mercedes-Benz group of companies in South Africa  posted its financial results for the 2015 financial year, with total annualised revenue for the group  at R65.8bn – a substantial increase of 45% on the previous year.

This was in large part due to  the expected increase in production volumes out of its East London plant, as well as the concurrent increase in export revenue generated from that facility.
Earnings before interest and tax (EBIT) from ongoing business also showed a healthy increase  from the previous year’s level, improving by 52% to end at R4.67bn. This number excludes the impact of a once-off reporting item from the sale of Atlantis Foundries, which was
concluded last year.
In 2014 Mercedes-Benz South Africa started production in its East London plant of the new generation C-Class, which is exported to various international markets, and for which a total investment of more than R5bn was made in the period from 2011 to 2015. Due to the
introduction of the new-generation C-Class, the East London plant did not manufacture any passenger cars in the first six months of that year, hence the substantial increase in revenue when the full year of production from 2015 is compared to the revenue generated from year prior.
In the drive to ensure maximum productivity and efficiency at the East London plant a further investment of R498m was made in 2015.
Mercedes-Benz Cars held on to its pole position in the premium luxury segment, with total sales of 24 608 Mercedes-Benz cars. This is more than 3 000 units ahead of its nearest competitor.
Recently the group of companies also announced the opening of its Regional Centre Southern Africa for commercial vehicles, paving the way for further excellence and customer dedication in the entire region. The Regional Centre will be in charge of commercial vehicle
sales and service support in South Africa, Namibia, Botswana, Zimbabwe, Mozambique,
Malawi, Zambia, Lesotho and Swaziland in partnership with its dealer network and general distributors in these countries.
“In line with the foundation laid in 2014 we achieved record production levels as well as record export numbers for the C-Class, achieved robust sales in a declining market and further cemented our leadership in the commercial vehicle segment. Our product offensive, from all business units and brands, will continue to excite and inspire our customers.

The economic climate is changing, but we are confident that we’ve built a steady basis from  which to face all headwinds with resilience and further success,” says Arno van der Merwe, CEO and Executive Director Manufacturing.
Providing employment across the group to more than 5 200 employees, the group of companies (Mercedes-Benz South Africa, Mercedes-Benz Financial Services, Daimler Fleet Management, and Sandown Motor Holdings) also contributed to the South African economy through tax payments of more than R640m, while R55.5m was spent on social upliftment and engagement.
In 2015 Mercedes-Benz South Africa also continued its focus on training and developing talent in both the regions in which it operates and amongst its own employees. More than R65m was invested into the people of MBSA as part of various training programmes and
talent development initiatives during the year

DIVISIONAL BREAKDOWN
Mercedes-Benz Cars product offensive remains bullish for 2016 With the broadest product portfolio in the luxury market, Mercedes-Benz Cars remained in the number one position as of year-end 2015.
“With regards to pricing, given the tougher economic climate already seen in 2016, our pricing continues to be market-related, and we will offer our customers value for money solutions to encourage their purchasing decisions at this price sensitive period,” says Florian
Seidler, Co-CEO Mercedes-Benz South Africa & Executive Director: Mercedes-Benz Cars.
Mercedes-Benz continues to maintain dealer standards by enhancing its state-of-the-art dealer facilities and the brand is in constant dialogue with their extensive dealer network to improve its customer offering.
“We have introduced a sophisticated sales method of assisting customers, such as iSales, which allows the dealer to assist the customer to configure their car on the fly. Another recent development is the introduction of our “real time” online vehicle stock locator, which allows customers to find their vehicle of choice at their dealer of choice. We are the first in the country to introduce this initiative,” adds Seidler.
The product portfolio is growing and customers from all age groups and with varying design and performance preferences will find a Mercedes-Benz model that meets their specific requirements.

Forthcoming attractions: Mercedes-Benz Cars* (*SA market) Mercedes-Benz is taking a big step into the future with the new E-Class. The tenth-generation business sedan delivers stylish highlights with its distinct, emotive design and high-grade interior. The new E-Class includes a number of new technical innovations, ensuring comfortable, safe driving on a new level plus a new dimension in driver assistance and is heralded as the most intelligent business sedan. Introduction of the new-generation E-Class
is planned for the beginning of June 2016.
Since its launch in 2011, the Coupé version of the C-Class has steadily gained in significance, culminating with the C 63 AMG “Black Series”. The new Coupé, arriving on our shores in middle April, is athletic and sporty, and the vivid, sensual design cuts a fine figure on the road and embodies modern luxury. At the same time, its interior raises elegance and style to a
sporty level, seducing the heart and mind.  2015 was the year of the SUV, from the trendy GLA-Class in the Compact Car segment to the
new GLC in the mix-luxury segment. With the new sporty GLE Coupé and the facelifted GLE,
each with their own distinct style, the product offensive in the SUV segment continues. The GLS, due for local launch in the second quarter of this year, is also setting standards in the world of SUVs as it confirms its position as the “S-Class among SUVs”.
This year, 2016, is the year of “Open Top Driving” with the legendary Mercedes-Benz SL taking open top driving to a new dynamic level from June 2016.The SLK compact roadster will also be relaunched in June with its new name – the SLC. As part of the facelift, with
significantly optimised technology, the designers have further honed the cult roadster’s sporty look.

Mercedes-AMG has recently introduced the first open-top member of the C-Class family in the shape of the new C 43 4MATIC Cabriolet. Sporty in appearance, the C 43 Cabriolet is instantly recognisable as a member of the AMG family. Its distinctive AMG features
underscore the progressive nature and performance of the brand. The C-Class Cabriolet will reach our shores by September 2016.
The new S-Class Cabriolet is the sixth variant of the current S-Class family and the first open-top luxury four-seater from Mercedes-Benz since 1971. The new cabriolet offers a distinctive, sensual and exclusive design, with cutting-edge technology from the S-Class. The S-Class Cabriolet is due for launch locally in the third quarter 2016. The smart brand appeals equally to the heart and mind. An expressive design idiom and colouring embody pure joie de vivre.

The compact proportions and clever details testify unique functionality. The new smart fortwo and the new smart forfour are clearly
recognisable as members of the same family. The smart fortwo has undergone improvements in virtually all areas and is markedly more comfortable. The hallmark smart rear engine concept is being offered for the first time in the four-seater smart forfour and these two
models will be introduced in May 2016.
MercedesMe
To provide customers with a “Best customer experience”, the brand will roll out a true multi- channel product called “MercedesMe”, towards the end of the year. This product will offer personalised access to the individual and exclusive world of Mercedes-Benz.
There are a number of exciting initiatives under the MercedesMe umbrella, such as Mercedes Connect me.

All these products introduce new systems which will support the dealer network and end users, to offer a number of digital touch points to service customers more efficiently by allowing them to connect with their car at any time.
Mercedes-Benz After-Sales Division
The Mercedes-Benz After-Sales Division was recently awarded the overall Mercedes-Benz Global After-Sales Market Performance Award – Market of the Year 2015 in the Champions League. The Market Performance awards are allocated into a Champions League for larger
markets, and a Super League for the smaller markets, the market separation being based on market growth. The ultimate goal of this annual award is to measure growth throughout the year by set criteria.

Daimler Trucks & Buses confirms its position as market leader Daimler Trucks & Buses (DT&B) dominated the industry as it remained the market leader in various segments in the commercial vehicles industry. The year 2015 saw the Daimler brands (Mercedes-Benz Trucks, Freightliner, Western Star, Mercedes-Benz Buses and FUSO Trucks)
continue to provide customised mobility solutions.
FUSO introduced its first truck from Daimler India Commercial Vehicles into the southern African market, the light to medium-duty FUSO FA9-137. The robust vehicle is custom-tailored and designed to meet the ever-demanding and ever-changing customer requirements in southern Africa.
“DT&B remained resilient in 2015, despite the depreciating rand. We were market leaders, with unit sales of more than 4 700. We continued offering the best mobility solutions to all of our customers and ensured our pricing remained market related. All our endeavours during the year ensured that we looked for innovative ways to reduce our customers’ Total Cost of Ownership,” says Kobus van Zyl, Executive Director: Daimler Trucks & Buses Southern Africa.
The Mercedes-Benz Bus & Coach division led from the front as it was the first to market with Compressed Natural Gas buses, delivering 40 buses to the City of Tshwane.
“We are proud to be a facilitator when it comes to public transport in South Africa, as our team won an impressive number of the tenders that were published last year. This is testament to the Mercedes-Benz Bus & Coach division’s brand claim: The Standard for
Buses,” adds van Zyl.
In February of this year DT&B also opened the Regional Centre Southern Africa (RCSA), strengthening its continued drive for excellence and customer dedication. RCSA will be responsible for Daimler’s full commercial vehicles portfolio in the region, from the full
offering of Mercedes-Benz Vans, heavy-duty Mercedes-Benz trucks and buses as well as the uniquely suited products (trucks and buses) from FUSO. The Regional Centre will be in charge of South Africa, Namibia, Botswana, Zimbabwe, Mozambique, Malawi, Zambia,
Lesotho and Swaziland.
“Having a stronger presence in the Southern African markets means that we are able to react faster and be in touch more frequently with our commercial vehicles customers and the various General Distributors in the respective countries. The Regional Centre Southern Africa provides further opportunities for all our commercial vehicle endeavours, including sales, after-sales, marketing, client services and parts.”
Mercedes-Benz Vans – increased market share in a declining market In 2015, Mercedes-Benz Vans increased its market share by 1.3 percentage points for the large van market and 3.8 percentage points for the mid-size market. The two new products
released into the market, the V-Class and the Vito, proved to be very successful.
The launch of the all-new V-Class offered a multi-purpose vehicle (MPV) with versatility, comfort and style, complemented by the best technology and safety systems available. This was followed by the thoroughbred workhorse, the Vito, offered in panel van, Mixto and Tourer guise. The Vito perfectly pairs an exceptionally high payload with a reasonable purchase price
and maintenance costs.
“In 2015, with our extensive Mercedes-Benz Vans offering, we continued to ensure that we have a van for all conceivable applications. Vans are the working man’s tools, families rely on them to move around and they are even an integral part of our public transport systems. This is why we continued to supply our customers with only the best products, backed by only the best service,” says Nicolette Lambrechts, Vice-President of Mercedes-Benz Vans Southern Africa.

East London Plant – a strong partner in the Daimler network
With the transition in 2014 to the new W205 C-Class, the stage was set for Mercedes-Benz South Africa’s East London plant to manufacture a record-number of units from its plant in

East London, most of these destined for export. In total 102 200 C-Class units rolled off the line in 2015, with the resulting number of export units ensuring that MBSA is now a net exporter in the South African economy.
The C-Class units are exported to multiple markets in the world, with exports to the United States also resuming again from October 2015. From a production perspective MBSA achieved some very important milestones in the last
year. The one millionth passenger car rolled-off the East London plant line in the first quarter of the year and in the last quarter the 125 000th Truck was assembled. These milestones build on the already rich heritage and long history of more than six decades that the group of companies have in South Africa.
The attendance rate at the plant, which is constantly around 99%, illustrates the dedication of the people who physically build their own energy and commitment into every car that leaves the premises. The company is also steered by a firmly established strong and independent leadership culture, which is maintained through various continuous strategic engagements
across all levels.
“This is testament to our commitment to sustainable growth. We will improve efficiencies while maintaining the highest level of quality – all the while ensuring that we can achieve an increase in capacity by removing bottlenecks in the production process and improving the
way we work even more. In the last year we had a further investment of R498m to achieve these goals. This investment pattern also continues in the coming year with the plant getting ready for the production of the C 350 e, the second plug-in hybrid model from Mercedes-
Benz – something we are looking forward to,” says Van der Merwe. The C 350 e is the first plug-in hybrid model from Mercedes-Benz with a four-cylinder petrol engine. The model will be available in the local market towards the end of this year.
Mercedes-Benz Financial Services: Showing solid performance
Acquisitions achieved by Mercedes-Benz Financial Services (MBFS) again surpassed all records securing 7% growth in 2015 – once again exceeding the R10bn mark. Good quality business could still be acquired even after the implementation of more stringent legislative
lending criteria and despite the Monetary Policy Committee’s decision to raise the prime
lending rates twice in 2015.
The strong portfolio growth was mainly attributed to the continued success of the Agility Product. As tribute to this success of Agility, the passenger car penetration increased by 6.2% to 44%. Agility contributes 69% of all new passenger car acquisitions which has resulted
in the total MBFS acquisitions of 11 026 units for the year.
Customer loyalty continues to ensure growth in the commercial vehicles portfolio. In 2015, total commercial vehicle sales amounted to 4 989 units with total MBFS acquisitions of 2 136 units. Also supported by a strong product line-up, MBFS’ van business remains
promising. The roll-out of Agility in the van segment is expected to boost penetration in
2016.
Four out of 10 Mercedes-Benz Passenger Cars and Mercedes-Benz Trucks and two out of 10 Mercedes-Benz Vans and Mercedes-Benz Buses are financed by MBFS.

In 2016 we will increase our focus to digitalising our customer platforms and creating fascinating new products. Already today an online chat, real-time quotation functionality for dealer stock and online statements are available.

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