Mercedes- Benz group does well in tough economic conditions

The Mercedes-Benz group of companies in South Africa (MBSA) 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.

001-off-my-wheelsBrian Joss – 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, Mercedes said.

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.

The Mercedes C Class Coupé:  arriving in April. Picture: Quickpic
The Mercedes C Class Coupé: arriving in April. Picture: Quickpic

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 in the year.

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 and 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.

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.

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

“DT&B remained resilient in 2015, despite the depreciating rand. We were market leaders, with unit sales of more than 5 300. 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 and Buses Southern Africa.

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.

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.

With the transition in 2014 to the new W205 C-Class, the stage was set for Mercedes-Benz South Africa 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 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

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.

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