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Daimler reports 65 per cent growth rate

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Europe's truckmakers anticipate profits will rebound faster than expected in 2010, thanks to emerging markets where "enormous" growth rates pushed aside painful memories of the industry's worst ever slump.

Global leader Daimler AG celebrated a 65 per cent surge in new vehicle orders for commercial trucks in the first eight months of this year, citing explosive demand in China, Indonesia and Latin America.

 

"These figures give us cause for optimism and are more than just a brushfire," Daimler Trucks Chief Andreas Renschler told reporters on Tuesday, during a press conference at the biennial IAA truck show in Hanover.

Renschler said he would give a more precise forecast for earnings at his division, which currently expects earnings before interest and tax of around 1 billion euros ($1.3 billion), when Daimler reports third-quarter group figures on October 28.

Daimler Trucks has already increased its guidance twice this year from its initial target of about 200 million euros.

Mark Seng, vice president at US industry researcher Polk, said truckmakers needed to be even more sensitive to regional peculiarities in view of this shift in demand to frontier and emerging markets.

"It is important for manufacturers and parts suppliers to have a good understanding of the demand for heavy commercial vehicles by country to identify trends, manage inventory and provide the necessary resources within markets around the globe," he said on Tuesday.

"Approximately 88 per cent of the demand for these vehicles is outside of the United States and Canada."

So far this year, the four BRIC countries Brazil, Russia India and China as well as the "Next 11" frontier markets comprised nearly 40 per cent of Daimler Trucks' overall sales, as opposed to 30 per cent for the full year 2009.

PICKUP SPREADING TO EUROPE

German rival MAN SE also took a more bullish stance on 2010, saying three months before the end of the year its operating profit margin target is "conservative".

It raised its forecast for annual revenue to close to the record 14.9 billion euro mark seen in 2008.

"The 6 per cent target should serve more as a floor for expectations," finance chief Frank Lutz told reporters on the sidelines of the show.

Automotive parts suppliers, which suffered like truckmakers from a plunge in demand last year, are seeing a corresponding rebound in their figures.

Germany's Bosch said it expects revenue from its automotive business to jump 25 per cent to more than 27 billion euros this year, about a quarter of which will stem from its commercial vehicles business.

Four of Bosch's 10 largest commercial vehicle customers are Chinese manufacturers, it said.

Optimism abounds for 2011 as well. In its commercial vehicles parts business alone, Bosch aims to increase revenue by 9 per cent to 7.4 billion euros.

"For the long term, opportunities for growth look good," said Bernd Bohr, head of Bosch's automotive business, referring to demand in trucks, vans, buses and off-highway equipment.

Volvo said European demand was also finally picking up.

"The recovery in demand that we saw in Asia and South America at the end of last year is now becoming more and more visible also in Europe," said Volvo AB CEO Leif Johansson.