Mercedes Worldwide Sales Surge Led by US and China

Daimler management reported:

Daimler AG continued along its successful path with record levels of unit sales and revenue and significantly increased earnings in the first quarter of 2015. With total sales of 641,600 cars and commercial vehicles worldwide in the first quarter, the Group sold 13% more vehicles than in the first quarter of last year. Mercedes-Benz Cars increased its sales by 18% to 459,700 vehicles, achieving its best-ever first quarter in terms of unit sales. Group revenue in the first quarter of €34.2 billion was 16% above the figure for the prior-year period. Adjusted for the effects of exchange-rate changes, revenue growth amounted to 9%. The Group achieved EBIT of €2,906 million (Q1 2014: €1,787 million). Due to the positive development of the biggest divisions, EBIT from the ongoing business also improved significantly to €2,930 million (Q1 2014: €2,072 million) by 41%. Net profit also rose by a substantial 89% to €2,050 million.

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The progress was marked by improvement in nearly every region around the world. Because China and the United States are the world’s largest car and light truck markets, the rise in these was critical to overall results:

Unit sales by Mercedes-Benz Cars increased in the first quarter of 2015 by 18% to 459,700 vehicles. This made the first three months of this year the best first quarter for unit sales so far. The main growth driver in Western Europe was once again the United Kingdom with a plus of 17%; unit sales in Germany increased by 11%. The growth path continued also in the major markets of the United States (+14%) and China (+24%), as well as in Japan (+23%) and South Korea (+20%).

Mercedes unit sales in the United States vie month by month with those of BMW for the lead role among luxury brands.

Looking ahead, management commented:

Mercedes-Benz Cars is continuing last year’s success in 2015 and is further strengthening its market position. After its best-ever first quarter, the division intends to achieve significant growth in unit sales once again in full-year 2015, thus setting a new record. Major contributions will come from the C-Class sedan and wagon models

The C-Class is the least expensive among its model lines. While it brings in sales, presumably it is not as profitable as the manufacturer’s more expensive vehicles. This might, in turn, erode Mercedes profits. On the other hand, it does bring in younger buyers, who over time may trade up to other, more expensive models. Mercedes probably will need that trend for its overall sales to expand.

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