The document provides an overview of Daimler AG, a German automotive company. It discusses the origins and founders of Daimler, including Karl Benz and Gottlieb Daimler. It describes Daimler's current business model, which includes Mercedes-Benz cars, Daimler trucks, Mercedes-Benz vans, Daimler buses, and Daimler financial services. It provides revenue breakdowns by division and discusses the key markets and production facilities for each division.
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Daimler AG History and Business Model
1. by Frahim Adajania
ICFAI Business School
(IFHE University - Hyderabad)
MBA
(2018-20)
Project Report
Course: Business History
Topic (Company): Daimler AG
Made By:
Frahim Adajania
2. by Frahim Adajania
INDEX
Sr.
No.
Titles
Pg.
No.
1. Daimler AG 1
2. Beginning 1
3. Founders 2
4. Business Model 4
5. Business Group and Society 9
6. Business Group and Industry 10
7. Major Events 11
8. Timeline of Daimler 17
9. S.W.O.T. Analysis 18
10. Exhibits 20
11. References 23
3. by Frahim Adajania
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Daimler AG
The Daimler Group, headquartered in Stuttgart, Germany, is one of the most successful automotive
companies in the world. With its divisions Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans,
Daimler Buses and Daimler Financial Services, the Daimler Group is one of the biggest producers of
premium cars and the world’s biggest manufacturer of commercial vehicles with a global reach.
The Mercedes-Benz Cars segment includes vehicles of the Mercedes-Benz brand, including the brands,
Mercedes-AMG and Mercedes-Maybach, as well as the Mercedes me brand. The Daimler Trucks
segment develops and produces vehicles under the brands, including Mercedes-Benz, Freightliner,
Western Star, FUSO and BharatBenz. The Mercedes-Benz Vans segment is a supplier of a range of
vans and associated services. The Daimler Buses segment sells completely built-up buses under brand
names, including MercedesBenz and Setra. The Daimler Financial Services segment supports the sales
of its automotive brands in approximately 40 countries around the world. Other than that, it also
provides financing, leasing, fleet management, insurance, financial investments, credit cards, and
innovative mobility services.
Daimler-Benz was known as a strong German luxury brand with an international presence. The
company had cultivated industry-leading R&D including safety. The company had market strength as
a global distributor. In the late 1990s Daimler Looked to Chrysler to help bring shareholder value to the
German economy. At the time of the merger Daimler-Benz’s global footprint was impressive: 33%
German, 25% EU, 21% North America. Although Chrysler was later sold to Cerberus Capital
Management it still remains a very significant part of Daimler’s History. Even though it was one of the
smallest of the "Big 3" U.S. automakers, January 2007 was a time when, DaimlerChrysler, excluding
its luxury Mercedes and Maybach lines, also outsold traditionally second place Ford, though behind
General Motors and Toyota.
As of 2014, Daimler owned or had shares in a number of car, bus, truck and motorcycle brands including
Mercedes-Benz, Mercedes-AMG, Smart Automobile, Detroit Diesel, Freightliner, Western Star,
Thomas Built Buses, Setra, BharatBenz, Mitsubishi Fuso, MV Agusta as well as shares in Denza,
KAMAZ and Beijing Automotive Group. The luxury Maybach brand was terminated at the end of 2012
but revived in April 2015 as "Mercedes-Maybach" versions of the Mercedes-Benz S-Class and G-Class.
In 2017, Daimler sold 3.3 million vehicles. By unit sales, Daimler is the thirteenth-largest car
manufacturer and is the largest truck manufacturer in the world. The company is a component of the
Euro Stoxx 50 stock market index.
Beginning
Daimler AG's origin is in an Agreement of Mutual Interest signed on 1 May 1924 between Benz & Cie
(founded 1883 by Karl Benz) and Daimler Motoren Gesellschaft (founded 1890 by Gottlieb Daimler
and Wilhelm Maybach).
Both companies had been manufacturing and continued to manufacture their separate automobile and
internal combustion engine brands until, on 28 June 1926, when Benz & Cie. and Daimler Motoren
Gesellschaft AG formally merged—becoming Daimler-Benz AG—and agreed that, thereafter, all of
the factories would use the brand name of Mercedes-Benz on their automobiles.
4. by Frahim Adajania
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Founders
Karl Friedrich Benz (25 November 1844 – 4 April 1929):
He was a German engine designer and automobile engineer. His Benz Patent Motorcar from 1885 is
considered the first practical automobile. He received a patent for the motorcar on 29 January 1886.
Early Life:
He was a prodigious student. In 1853, at the age of nine he
studied at the scientifically oriented Lyceum, next at the Poly-
Technical University under the instruction of Ferdinand
Redtenbacher. Benz had originally focused his studies on
locksmithing, but he eventually followed his father's steps
toward locomotive engineering. On 30 September 1860, at age
15, he passed the entrance exam for mechanical engineering at
the University of Karlsruhe, which he subsequently attended.
Benz graduated 9 July 1864 aged 19. During these years, while
riding his bicycle, he started to envision concepts for a vehicle
that would eventually become the horseless carriage.
Following his formal education, Benz had seven years of
professional training in several companies, but did not fit well
in any of them. The training started in Karlsruhe with two years
of varied jobs in a mechanical engineering company. He then
moved to Mannheim to work as a draftsman and designer in a
scales factory. In 1868 he went to Pforzheim to work for a
bridge building company Gebrüder Benckiser Eisenwerke und
Maschinenfabrik. Finally, he went to Vienna for a short period
to work at an iron construction company.
Work Life:
In 1871, at the age of twenty-seven, Karl Benz joined August Ritter in launching the Iron Foundry and
Mechanical Workshop in Mannheim, later renamed Factory for Machines for Sheet-metal Working.
The enterprise's first year went very badly. Ritter turned out to be unreliable, and the business's tools
were impounded. To overcome the difficulty, Benz's fiancée, Bertha Ringer, bought out Ritter's share
in the company using her dowry.
Karl Benz led in the development of new engines despite of all business setbacks. In 1878 he began to
work on new patents to get more revenues. First, he concentrated all his efforts on creating a reliable
petrol two-stroke engine. Benz finished his two-stroke engine on 31 December 1878, New Year's Eve,
and was granted a patent for it in 1879.
Karl Benz showed his real genius, through his successive inventions that were registered while
designing and became the production standard for his two-stroke engine. Benz soon patented the speed
regulation system, the ignition using sparks with battery, the spark plug, the carburetor, the clutch, the
gear shift, and the water radiator.
Gottlieb Wilhelm Daimler and Wilhelm Maybach:
Source:https://en.wikipedia.org/wiki/Karl_Benz#/media/File:
Carl_Benz.png
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Gottlieb Wilhelm Daimler (17 March 1834 – 6 March 1900):
He was an engineer, industrial designer and industrialist born in Schorndorf (Kingdom of Württemberg,
a federal state of the German Confederation), in what is now Germany. He was a pioneer of internal-
combustion engines and automobile development. He invented the high-speed liquid petroleum fueled
engine.
Wilhelm Maybach (9 February 1846 – 29 December 1929):
He was an early German engine designer and industrialist. During the 1890s he was hailed in France,
then the world centre for car production, as the "King of Designers".
Daimler and Maybach were two inventors whose goal was to create small, high-speed engines to be
mounted in any kind of locomotion device. In 1883 they designed a horizontal cylinder layout
compressed charge liquid petroleum engine that fulfilled Daimler's desire for a high speed engine which
could be throttled, making it useful in transportation applications. This engine was called Daimler's
Dream.
In late 1883, Daimler and Maybach patented the first of their engines fueled by Ligroin. This engine
was patented on December 16, 1883. It achieved Daimler's goal of being small and running fast enough
to be useful at 750 rpm (soon after up to 900). Daimler had three engines built in 1884. Maybach
persuaded him to put one in a vehicle, the result being the Reitwagen. The 1883 Daimler Maybach
engine, was the first compression engine which ran on liquid Petroleum.
In 1885 they designed a vertical cylinder version of this engine which they subsequently fitted to a two-
wheeler, the first internal combustion motorcycle which was named the Petroleum Reitwagen (Riding
Car) and, in the next year, to a coach, and a boat. Daimler called this engine the grandfather clock engine
(Standuhr) because of its resemblance to a large pendulum clock.
Source:https://en.wikipedia.org/wiki/Gottlieb_Daiml
er#/media/File:Gottlieb_Daimler_1890s2.jpg
Source:https://en.wikipedia.org/wiki/Wilhelm_May
bach#/media/File:Wilhelm-maybach-1900.jpg
6. by Frahim Adajania
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In 1890, they converted their partnership into a stock company Daimler Motoren Gesellschaft (DMG,
in English—Daimler Motors Corporation). They sold their first automobile in 1892. Daimler fell ill and
took a break from the business. Upon his return he experienced difficulty with the other stockholders
that led to his resignation in 1893. This was reversed in 1894. Maybach resigned at the same time, and
also returned. In 1900 Daimler died and Wilhelm Maybach quit DMG in 1907.
Business Model:
Daimler has a tradition which goes back to 1930s, that extends back to Gottlieb Daimler and Karl Benz,
the inventors of the automobile, and features pioneering achievements in automotive engineering.
Daimler Group is a globally leading vehicle manufacturer that offers an unparalleled range of premium
automobiles, trucks, vans and buses. The product portfolio is rounded out by a range of tailored financial
services and mobility services. Daimler’s goal is to continue to play a leading role in the automotive
industry in the development of products and services for the future of mobility.
Daimler sells automobiles under the following brands worldwide:
➢ Mercedes-Benz Cars
• Maybach – production ended in 2012, but the ultra-high end S-class is sold as Mercedes-
Maybach
• Mercedes-Benz
• Mercedes-AMG
• Smart
- Car2Go
➢ Daimler Trucks
• Commercial vehicles
- Freightliner
- Mercedes-Benz (truck group)
- Mitsubishi Fuso
- Thomas Built Buses
- Sterling Trucks – operations wound down in 2010, but will continue to support authorized
dealers and vehicle owners
- Western Star
- BharatBenz
• Components
- Alliance Truck Parts
- Detroit Diesel
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➢ Daimler Buses
• Mercedes-Benz buses
• Orion Bus Industries – operations wound down in 2012, and closed in 2013
• Setra
➢ Mercedes-Benz Vans
• Mercedes-Benz (vans group)
➢ Daimler Financial Services
• Mercedes-Benz Bank
• Mercedes-Benz Financial
• Daimler Truck Financial
➢ Others
• Mercedes AMG High Performance Powertrains (Builds engines for Formula 1 Racing)
Daimler is active in nearly all the countries of the world. The manufacturing unit in India is situated
in Chennai. The Group has production facilities in a total of 19 countries and more than 8,500 sales
centers worldwide. This also helps us with the further development of technologies and services that
point the way forward to the future of mobility. Additional potential is generated by the digitization of
our processes and products.
In 2016, Daimler increased its revenue by 3 % to €153.3 billion. The Group’s five divisions contributed
to this total as follows: Mercedes-Benz Cars 56 %, Daimler Trucks 21 %, Mercedes-Benz Vans 8 %,
Daimler Buses 3 % and Daimler Financial Services 13 %. At the end of 2016, Daimler employed a total
workforce of more than 282,000 men and women worldwide. As on 2017 the revenues touched €164.33
billion and the number of employees worldwide were 2,89,321+. (Refer to Exhibits III, IV, V, VI and
VII – for revenues by division.)
Consolidated Revenue by Division
Source:http://annualreport2016.daimler.com/management-report/corporate-profile/business-model
8. by Frahim Adajania
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The products supplied by the Mercedes-Benz Cars division comprise a broad spectrum of premium
vehicles of the Mercedes-Benz brand, its Mercedes-AMG high-performance brand and its Mercedes-
Maybach luxury brand. These vehicles range from the compact models of the A-Class and B-Class to
a highly varied program of sport utility vehicles, roadsters, coupes and convertibles and S-Class luxury
sedans.. The most important markets for Mercedes-Benz Cars in 2016 were China with 22 % of unit
sales, the United States (16 %), Germany (14 %) and the other European markets (30 %). In the context
of its growth strategy, the division is continually further developing its flexible and efficient production
network with 29 plants on four continents. The plants are operating at a high level of capacity utilization,
so we are expanding our production capacities with a new facility in Jawor, Poland, and a second, highly
flexible plant in Kecskemét, Hungary.
Daimler Trucks develops and produces vehicles in a global network under the brands Mercedes-Benz,
Freightliner, Western Star, FUSO and BharatBenz. The division’s 26 production facilities are located
in the NAFTA region (14), Europe (7), Asia (3) and South America (2). In China, Beijing Foton Daimler
Automotive Co., Ltd. (BFDA), a joint venture with our Chinese partner Beiqi Foton Motor Co., Ltd.,
has been producing trucks under the Auman brand name since 2012. Daimler Trucks’ product range
includes light, medium and heavy-duty trucks for local and long-distance deliveries and construction
sites, as well as special vehicles used mainly in municipal applicationsDaimler Trucks’ most important
sales markets in 2016 were the NAFTA region with 35 % of unit sales, Asia (30 %)(, the EU30 region
(European Union, Switzerland and Norway — 19 %) and Latin America excluding Mexico (7 %).
Mercedes-Benz Vans is a global supplier of a complete range of vans and associated services. The
division’s product range in the segment for commercial vans comprises the Sprinter large van, the Vito
mid-size van (marketed as the “Metris” in the United States) and the Mercedes-Benz Citan urban
delivery van. The range of vans in the private-customer segment consists of the V-Class multi-purpose
vehicle (MPV) and the Marco Polo camper vans and recreational vehicles. Mercedes-Benz Vans has
manufacturing facilities at a total of nine locations in Germany, Spain, the United States and Argentina,
as well as in China within the framework of the Fujian Benz Automotive Co., Ltd. joint venture, in
France in the context of the strategic alliance with Renault-Nissan, and in Russia in cooperation with
our partners GAZ and YaMZ. The most important markets for vans at present are in the EU30 region,
which accounts for 70 % of unit sales in the reporting year, and the NAFTA region (12 % of unit sales).
The Daimler Buses division with its brands Mercedes-Benz and Setra is the undisputed industry leader
for buses above 8 metric tons in its traditional core markets in the EU30 region, Brazil, Turkey,
Argentina and Mexico. The division’s product range comprises city and intercity buses, coaches and
bus chassis. The largest of the division’s 14 production sites are located in Germany, France, Spain,
Turkey, Argentina, Brazil and Mexico, and since 2015, in India as well. In 2016, Daimler Buses
generated 66 % of its revenue in the EU30 region and 13 % in Latin America (excluding Mexico).
9. by Frahim Adajania
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The Daimler Financial Services division supports the sales of the Daimler Group’s automotive brands
in approximately 40 countries worldwide. Its product portfolio primarily consists of tailored financing
and leasing packages for customers and dealers, but also insurance brokering, fleet management
services, investment products and credit cards, as well as various mobility services such as the “moovel”
mobility platform. With the mytaxi app, following the merger with Hailo, we now reach approximately
6 million customers in more than 50 cities. The flexible mobility concept car2go is used by more than
2.2 million customers worldwide. The main areas of the division’s activities are Western Europe and
North America, and increasingly China as well. During the year under review, Daimler Financial
Services financed or leased about 50 % of the vehicles sold by Daimler. The division’s contract volume
of €132.6 billion covers more than 4.3 million vehicles. Daimler Financial Services also holds a 45 %
interest in the Toll Collect consortium, which operates an electronic road-charging system for trucks on
highways in Germany.
Daimler is active in the global automotive industry and related sectors also through a broad network of
subsidiaries, holdings and partnerships.
Daimler Group Report (2016)
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In India:
Wholly owned subsidies of Daimler:
- Mercedes-Benz India Private Limited - First assembling facility and headquarters Chakan, Pune,
Maharashtra.
- Daimler India Commercial Vehicles – Headquarters situated in Perungudi, Chennai, India - Main
production facility.
- Research facility Bengaluru - Mercedes-Benz Research & Development India (MBRDI) in
Bengaluru.
- Number of employees 3,000+
- 64 outlets located in 36 Indian cities.
Pune, Mercedes-Benz India Private Limited
Established in 1994, Mercedes-Benz India Pvt. Ltd. pioneered the luxury car market in India and boasts
of more than 128 years of cutting edge innovation in the luxury automobile industry globally. With a
world class production facility spread over 100 acres in Chakan, near Pune, set up in 2009 and an
independent assembly facility for passenger cars; the facility is among the fastest green-field operations
ever to be created and is rated among the top most CKD plants of Mercedes-Benz, globally. Mercedes-
Benz India product portfolio comprises the locally produced S-Class, E-Class, C-Class, GL-Class and
the M-Class. Completely Built Imported cars include the A-Class, CLS-Class, SLK-Class and the
luxury tourer B-Class etc. The product portfolio also comprises offering the iconic off-roader G 63
AMG as well as a wide range of other AMG performance cars like the C 63 AMG, E 63 AMG, SLK
55 AMG, GL 63 AMG, ML 63 AMG and CLA 45 AMG. Mercedes-Benz India’s strong focus on its
four pillars of Products, Network, Cost of Ownership and Brand experiences has led the company’s
growth story with a total of 64 outlets located in 36 Indian cities, making it the brand with the densest
network in the luxury segment.
Daimler India Commercial Vehicles Pvt. Ltd. is a subsidiary of the German Daimler AG
This company designs, manufactures, and sells commercial vehicles that cater to the demands of Indian
customers and are designed with nation's terrain in mind. These vehicles are branded as "BharatBenz",
"Mercedes Benz" and "Fuso".
After starting production in June 2012, the first heavy-duty truck was launched in September 2012. The
corporate office is located in Perungudi, Chennai, and the plant is located at Oragadam, Kanchipuram
District, Tamil Nadu. The plant started in May, 2015 with an investment of Rs 425 crore at Oragadam.
Daimler AG has been active in the commercial vehicle business in India for decades. In 1954, the first
truck specifically for the Indian market was a Mercedes-Benz, after Daimler-Benz granted a license for
automobile production to India-based Tata Group. A year prior, Daimler-Benz acquired an equity
interest in Tata. In 1970, Daimler-Benz and Tata entered into a licensing agreement, providing a
framework for further activities. In addition, Daimler has licensed various products to other Indian
manufacturers (e.g. Force Traveller). In 2007, Daimler introduced its heavy-duty truck Mercedes-Benz
Actros to the Indian market. This vehicle is used primarily in mining operations.
In order to produce light, medium, and heavy-duty trucks for the Indian market, Daimler Trucks entered
a joint venture with the Indian automobile group Hero. After receiving official approval from the Indian
11. by Frahim Adajania
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government in March 2008, Daimler Hero Motor Corporation Ltd. was established. The economic
situation from late 2008 to mid-2009 necessitated re-positioning of Daimler Trucks' partnership with
the Hero Group in India. As a result, Daimler AG and Hero Group announced on 15 April 2009 the
dissolution of Daimler Hero Commercial Vehicles Ltd. in India. Afterwards, Daimler created a new
Indian subsidiary without Hero Group's involvement, named Daimler India Commercial Vehicles Pvt.
Ltd.
Business Group and Society:
CSR Initiatives
SUSTAINABILITY: BETTER TODAY BETTER TOMORROW
Mercedes Benz India, believes in emphasising on the local issues where communities are benefited and
sustained. They engage with local people in every project. It is a key aspect for successful
implementation. They enable local people to actively participate in the project activities. Their key
motive is to improve the quality of education, provide infrastructural facilities, provide healthier lives
to the marginalized people and facilitate the local community with clean and safe drinking water
systems.
As Mercedes Benz, an environmentally sensitive organization, their foremost concern is to give
something back to the nature that humanity can constantly thrive upon.
Their aim is to implement such facilities which will focus on creating an impact on the society as well
as on the people, which will reduce the gap between all stakeholders.
- Education, Skill Development & Awareness: Poverty and Education in rural India is a main
concern. According to UN Sustainable Development Goals, obtaining quality education is the
foundation to improve people’s lives and sustainable development. At MB India, the focus is on
providing quality education and skill development to the underprivileged students.
- Health and Sanitation: Think Healthy, Think Wealthy! As a developing country, India faces lot
of health problems, clean drinking water facilities and sanitation services. The major reasons i.e.
Weak sanitation and no access to toilets in the rural areas contribute to health problems.
- Rural Development & Welfare: Rural development is one of the most important factors for the
growth of Indian economy. People’s participation has a significant role to play in rural development
and economic growth.
- Environment: Being a fast growing country, India is far behind most other countries when it comes
to preserving the environment and the ecology. The number of environmental concerns have
aggravated over the years. The major reasons for these changes are increasing pollution,
deforestation, climate change, loss of biodiversity, increasing population, natural calamities etc.
- Disaster Relief: The main reasons that are related to natural disaster are related to the climate
change, that cause massive loss of life and property. Floods, drought, landslide, cyclone etc. pose a
great threat to the living form. It takes years to rehabilitate people from the affected area.
12. by Frahim Adajania
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- Sports: The new partnership of Mercedes-Benz with Laureus Sport will see to support two
Laureus-supported programs in the country, OSCAR Foundation and YUWA India Trust.
- Safe Roads - The Philosophy and the Practice: One of the core beliefs of Mercedes-Benz is the
vision of accident-free driving. Daimler India Commercial Vehicles and Mercedes-Benz Research
& Development India have come together to institute the Safe Roads initiative.
The Business Group and Industry:
Following are the contributions to the automobile industry:
- The First Car: In 1883, Carl Benz was awarded German patent number 37435 for a three-wheeled,
self-propelled "Motorwagen". With a rear-mounted single-cylinder engine, the first automobile
forever changes the way people move, and sparks a legacy of innovation that continues to this day.
- Passenger-car Safety Development: In the year 1939 they tested passenger cars for safety by
incorporating a highly rigid floor, collapsible steering wheel and reinforced sides. They also
conducted crash tests.
- Crumple Zone Series: In 1951 they defined crumple zones on the rigid and reinforced car body.
In order to reduce impact on collision.
- Suspension and Drive: They also came up with individual wheel suspensions and individual wheel
drive which were enhanced and improved over time.
- Electric Propulsion: Daimler AG and the utility company RWE AG were set in 2009 to begin a
joint electric car and charging station test project in the German capital, Berlin, called "E-Mobility
Berlin". Following trials in 2007 and then with Tesla in 2009, Daimler is building a
production Smart electric drive car using Tesla's battery technology. Daimler temporarily invested
in Tesla, saving it from bankruptcy. Daimler's joint venture with BYD has resulted in the creation
of the new brand Denza. In 2016, Daimler subsidiary ACCUMOTIVE announced their stationary
batteries, to store up to 20 kWh of solar power for later use. Daimler plans to invest €1.5 billion in
battery technology and unveiled a factory in Kamenz in May 2017.
- Fuel cell: Daimler has been involved with fuel cell vehicle development for some time, with a
number of research and concept vehicles shown and demonstrated, the first being the
2002 Mercedes-Benz F-Cell car and the Mercedes-Benz Citaro hydrogen bus. In 2013, the Renault-
Nissan/Daimler alliance was joined by Ford to further develop the fuel cell technology with an aim
for production by 2017.
- Hybrid: Mercedes-Benz launched its first passenger car model equipped with a hybrid drive system
in summer 2009, the Mercedes-Benz S-Class 400 Hybrid and the Citaro Hybrid bus in
2007. Daimler Trucks and Mitusbishi Fuso have also trialed various hybrid models including
the Mitsubishi Fuso Canter Eco Hybrid and Mitsubishi Fuso Aero Star Aero Star Eco Hybrid bus.
- Biofuel research: Daimler AG is involved in a joint project with Archer Daniels Midland
Company and Bayer CropScience to develop the semi-evergreen shrub jatropha curcas as a biofuel.
13. by Frahim Adajania
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Major Events:
Mergers:
- Daimler-Benz AG (1926–1998):
Both companies continued to manufacture their separate automobile and internal combustion engine
marques until 28 June 1926, when Benz & Cie. and Daimler-Motoren-Gesellschaft formally merged -
becoming Daimler-Benz AG (Aktiengesellschaft) - and agreed that thereafter, all of the factories would
use the brand name of "Mercedes-Benz" on their automobiles.
The inclusion of the name Mercedes in the new brand name honored the most important model series
of DMG automobiles, the Mercedes series, which were designed and built by Wilhelm Maybach. They
derived their name from a 1900 engine named after the daughter of Emil Jellinek. Jellinek became one
of DMG's directors in 1900, ordered a small number of motor racing cars built to his specifications by
Maybach, stipulated that the engine must be named Daimler-Mercedes, and made the new automobile
famous through motorsports. That race car later became known as the Mercedes 35 hp. The first of the
series of production models bearing the name Mercedes had been produced by DMG in 1902. Jellinek
left the DMG board of directors in 1909.
The name of Daimler as a marque of automobiles had been sold by DMG - following his death in 1900
- for use by other companies (Daimler Motor Company and Austro-Daimler). Since the new company,
Daimler-Benz, would have created confusion and legal problems by including Daimler in its new brand
name, it therefore used the name Mercedes to represent the Daimler-Motoren-Gesellschaft interest. Karl
Benz remained as a member of the board of directors of Daimler-Benz AG until his death in 1929.
Although Daimler-Benz is best known for its Mercedes-Benz automobile brand, during World War II,
it also created a notable series of aircraft, tank, and submarine engines. Daimler also produced parts for
German arms, most notably barrels for the Mauser rifle. During World War II, Daimler-Benz employed
slave labour.
Source:https://www.google.co.in/search?sa=G&hl=en-IN&q=star+and+the+laurel:+the+centennial+history+of+daimler,+mercedes+and+benz,+1886-
1986+%5Bbook%5D&tbm=isch&tbs=simg:CAQSlwEJt4fFhzlQSJ4aiwELEKjU2AQaBAgUCAoMCxCwjKcIGmIKYAgDEijvAbQHswfPApwStwebEqQG-Aa8B640uj-
iNKQ0sDStNKw08ze5P6s0GjCMN8iHnts2p4ZEpdGZjZr2WMKAYg6TFYt7cPfBCZrF0LKIp3dnPjtRTFZdx13oP6ogBAwLEI6u_1ggaCgoICAESBAOgQGIM&ved=0ahUKEwjDw
sPp1MPcAhUMXSsKHdXiCroQwg4IJSgA&biw=1536&bih=732
14. by Frahim Adajania
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In 1989, Daimler-Benz InterServices AG (Debis) was created to handle data processing, financial and
insurance services, and real estate management for the Daimler group.
In 1998, Daimler-Benz AG bought the American automobile manufacturer Chrysler Corporation and
formed DaimlerChrysler AG. When the Chrysler Group was subsequently sold off to Cerberus Capital
Management and renamed Chrysler LLC in August 2007, the name of the parent company was changed
to simply Daimler AG within two months.
- DaimlerChrysler AG (1998–2007):
Jürgen Schrempp, the Chief Executive of Daimler-Benz had concluded as early as 1996 that his
company's automotive operations needed a partner to compete in the increasingly globalized
marketplace. Chrysler's, Eaton was drawing the same conclusion in 1997 based on two factors emerging
around the same time: the Asian economic crisis, which was cutting into demand and worldwide excess
auto manufacturing capacity, which was looming and would inevitably lead to industry consolidation.
With the annual global overcapacity as high as 18.2 million vehicles predicted for the early 21st century,
it became clearer that Daimler-Benz and Chrysler could survive as merely regional players if they
continued to go on alone.
In May 1998, Daimler-Benz and Chrysler reached a merger agreement after months of negotiation to
create DaimlerChrysler AG in a $37 billion deal. The deal was consummated in November 1998,
forming an auto behemoth with total revenues of $130 billion, factories in 34 countries on four
continents, and combined annual unit sales of 4.4 million cars and trucks. The two companies fit well
together geographically, Daimler strong in Europe and Chrysler in North America, and in terms of
product lines, with Daimler's luxurious and high-quality passenger cars and Chrysler's line of low-
production-cost trucks, minivans, and sport utility vehicles. Although this was ostensibly a merger of
equals, the company set up co-headquarters in Stuttgart and Auburn Hills, naming Eaton and Schrempp
co-chairmen. It soon became clear that the Germans were taking over the Americans. DaimlerChrysler
was set up as a German firm for tax and accounting purposes, and the early 2000 departures of Thomas
Stallkamp, the initial head of DaimlerChrysler's U.S. operations, and Eaton (who was originally slated
to remain until as late as November 2001) left Schrempp in clear command of the company.
Source:https://www.google.co.in/search?q=daimlerchrysler&rlz=1C1CHBD_enIN806IN806&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjj9Mnj1cPcAhW
YfCsKHXWlDLcQ_AUICigB&biw=1536&bih=732#imgrc=l8L6njIsk4zN_M:
15. by Frahim Adajania
13
During 1999 DaimlerChrysler concentrated on squeezing out $1.4 billion in annual cost savings from
the integration of procurement and other functional departments. The company organized its automotive
businesses into three divisions: Mercedes-Benz Passenger Cars/smart, the Chrysler Group, and
Commercial Vehicles. In November 1999 DaimlerChrysler announced that it would begin phasing out
the aging Plymouth brand. The Debis services division was merged with Chrysler's services arm to form
DaimlerChrysler Services, while DASA was renamed DaimlerChrysler Aerospace. Late in 1999 the
company reached an agreement to merge DaimlerChrysler Aerospace with two other European
aerospace firms, the French Aerospatiale Matra and the Spanish CASA, to form the European
Aeronautic Defence and Space Company (EADS). DaimlerChrysler would hold a 30 percent stake in
EADS, which would be the largest aerospace firm in Europe and the third largest in the world.
In early 2000, DaimlerChrysler set the lofty goal of becoming the number one automaker in the world
within three years. The company's needs were to bolster its presence in Asia, where less than 4 percent
of the company's overall revenue was generated and to gain a larger share of the small car market in
Europe.
DaimlerChrysler's lofty goal would remain unrealized however, as the company faced a host of
challenges. The Chrysler Group division was plagued by high costs and weak sales which ultimately
cost James P. Holden his CEO position. Buoyed by its strong sales in the mid-1990s, Chrysler had spent
heavily on product development in the late 1990s and bolstered its work force while costs were
skyrocketing. By the second half of 2000 Chrysler lost $1.8 billion while spending over $5 billion.
Dieter Zetsche was tapped to reorganize the faltering U.S. division. He launched a major restructuring
effort in February 2001 that included cutting $2 billion in costs, making additional cuts in supplier costs,
slashing 20 percent of its workforce, and making changes to Chrysler's product line that included the
elimination of the Jeep Cherokee (the Grand Cherokee remained in the product line) and the launch of
the Jeep Liberty.
At the same time, global economies began to weaken in the aftermath of the September 11, 2001,
terrorist attacks. To entice customers, car makers began offering buyer incentives that began to wreak
havoc on profits. Industry analysts began to speculate that the 1998 merger may have been a mistake.
Schrempp's proclamation that the deal would create the most profitable car maker in world had indeed
fallen short. In fact, the company's market capitalization was $38 billion in September 2003. Before the
union Daimler's market cap had been $47 billion.
Meanwhile, the company's Mercedes division plugged along launching the E-Class sedan, the SLK
roadster, and the Maybach luxury vehicle. In 2003, Chrysler launched the Crossfire, a roadster
developed with Mercedes components, and the Pacifica, a SUV/minivan. It also began to heavily market
its powerful Hemi engine, which could be purchased for the Dodge Ram pickup and its passenger cars.
In early 2004, Chrysler's 300C sedan and the Dodge Magnum sports wagon made their debut.
Competition remained fierce in the auto industry prompting DaimlerChrysler to make several changes
in its strategy. In December 2003, the company sold its MTU Aero Engines business. That year the firm
acquired a 43 percent stake in Mitsubishi Fuso Truck and Bus Corporation hoping to cash in on Asia's
growing truck market. Perhaps its most drastic move, however, came in April 2004 when
DaimlerChrysler's supervisory board voted against providing funds to bailout Mitsubishi Motors, which
by now was struggling under losses and a huge debt load. Mitsubishi played a crucial role in Schrempp's
Asian expansion strategy and it developed the platforms for Chrysler's compact and midsize cars. The
failure to provide funds put a strain on the business relationship between the two and threatened to result
in huge problems for Chrysler, which had cut back on engineering capacity as it relied on Mitsubishi to
develop its small and mid-sized cars.
16. by Frahim Adajania
14
At the same time, DaimlerChrysler moved ahead in the Chinese market without Mitsubishi and without
another partner, Hyundai. To bolster is presence in the region, DaimlerChrysler restructured its joint
venture with Beijing Automotive Industry Holding Co. Ltd. and set plans in motion to tie up with
Chinese Fujian Motor Industry Group and the Taiwanese China Motor Corporation to launch several
cars in the Chinese market by 2005. Rumors circulated that DaimlerChrysler's relationship with
Hyundai was faltering as a result, and in 2004 the company signaled that it would sell its interest in the
South Korean automaker.
Daimler agreed to sell the Chrysler unit to Cerberus Capital Management in May 2007 for US$6 billion.
Through most of its history, Chrysler has been the smallest of the "Big 3" U.S. automakers, but in
January 2007, DaimlerChrysler, excluding its luxury Mercedes and Maybach lines, also outsold
traditionally second place Ford, though behind General Motors and Toyota.
Chrysler reported losses of US$1.5 billion in 2006. It then announced plans to lay off 13,000 employees
in mid-February 2007, close a major assembly plant and reduce production at other plants in order to
restore profitability by 2008.
DaimlerChrysler had reportedly approached other carmakers and investment groups to sell Chrysler in
early 2007. General Motors was reported to be a suitor, but on 3 August 2007, DaimlerChrysler
completed the sale of Chrysler Group to Cerberus Capital Management. The original agreement stated
that Cerberus would take an 80.1 percent stake in the new company, Chrysler Holding LLC.
DaimlerChrysler changed its name to Daimler AG and retained the remaining 19.9% stake in the
separated Chrysler.
The terms saw Daimler pay Cerberus US$650 million to take Chrysler and associated liabilities off its
hands. Of the US$7.4 billion purchase price, Cerberus Capital Management was to invest US$5 billion
in Chrysler Holdings and US$1.05 billion in Chrysler's financial unit. The de-merged Daimler AG
received US$1.35 billion directly from Cerberus but directly invested US$2 billion in Chrysler itself.
Chrysler filed bankruptcy in 2009.
Daimler AG Logo (2007 - till date)
(Source:https://www.google.co.in/search?q=daimler+logo&rlz=1C1CHBD_enIN806IN806&source=lnms&tbm=isch&s
a=X&ved=0ahUKEwjDqrGk2OLcAhUbXSsKHbHpBDoQ_AUICigB&biw=1058&bih=706#imgrc=_)
17. by Frahim Adajania
15
Joint ventures and alliances:
- Beijing Automotive Group:
In February 2013, Daimler acquired a 12% stake in Beijing Automotive Industry Holding Co Ltd
(BAIC), becoming the first western car manufacturer to own a stake in a Chinese company.
Daimler works with China's Beiqi Foton (a subsidiary of BAIC) to build Auman trucks.
- Denza:
In 2010 BYD Auto and Daimler AG created a new joint venture Shenzhen BYD Daimler New
Technology Co., Ltd. In 2012 the new brand Denza was launched by the joint venture to specialise in
electric cars.
- Fujian Benz:
In 2007 Daimler created a joint venture with Fujian Motors Group and China Motor Corporation and
created Fujian Benz (originally Fujian Daimler Automotive Co.).
- Renault-Nissan and Daimler Alliance:
On 7 April 2010, Renault-Nissan executives, Carlos Ghosn and Dr. Dieter Zetsche announced a
partnership between the three companies. The first fruits of the alliance in 2012 included engine sharing
(Infiniti Q50 utilising Mercedes diesel engines) and a re-badged Renault Kangoo being sold as a
Mercedes-Benz Citan.
Mercedes-Benz in Formula One:
Mercedes-Benz is currently involved in Formula One as
a constructor under the name of Mercedes-AMG
Petronas Motorsport. The team is based in Brackley,
Northamptonshire, United Kingdom, using a German
licence. Mercedes-Benz competed in the pre-war
European Championship winning three titles and debuted
in Formula One in 1954, running a team for two years.
The team is also known by their nickname, the "Silver
Arrows".
After winning their first race at the 1954 French Grand
Prix, driver Juan Manuel Fangio won another three
Grands Prix to win the 1954 Drivers' Championship and
repeated this success in 1955. Despite winning two
Drivers' Championships, Mercedes-Benz withdrew from motor racing in response to the 1955 Le Mans
disaster and did not return to Formula One until rejoining as an engine supplier in association with Ilmor
a British independent high-performance autosport engineering company later acquired by Mercedes, in
1994.
Source:https://www.google.co.in/search?rlz=1C1CHBD_enIN806IN806&biw=1536
&bih=732&tbm=isch&sa=1&ei=BF1dW8iRJtX99QO1xLrIDQ&q=mercedes+petron
as+logo&oq=mercedes+pet&gs_l=img.1.1.0l10.338833.344780.0.347016.12.12.0.0.0
.0.165.1578.0j12.12.0....0...1c.1.64.img..0.12.1573...35i39k1j0i67k1.0.keogR6dbWZc
#imgdii=rjJXWzu-nqJddM:&imgrc=QgFf3a2L9udHsM:
18. by Frahim Adajania
16
In addition to its factory team, Mercedes currently supplies engines to Force India and Williams. The
manufacturer has collected more than 160 wins as engine supplier and is ranked fourth in Formula One
history. Six Constructors' and ten Drivers' Championships have been won with Mercedes-Benz engines.
Mercedes has become one of the most successful teams in recent Formula One history, having achieved
consecutive Drivers' and Constructors' Championships from 2014 to 2017. In 2014, Mercedes managed
11 one-two finishes beating McLaren's 1988 record of 10. The record was extended the following year
with 12 one-two finishes. Mercedes also collected 16 victories in 2014 and 2015 apiece breaking
McLaren (1988) and Ferrari's (2002, 2004) record of 15. In 2016, they extended this record with 19
wins.
Change of Name:
- 1883 to 1926 - Benz & Company
- 1890 to 1926 - Daimler Motoren Gesellschaft AG
- 1926 to 1998 - Daimler-Benz AG
- 1998 to 2007 - DaimlerChrysler AG
- 2007 till date - Daimler AG
Holdings:
2017 shareholder structure by ownership:
(Refer Exhibit I)
- Institutional investors: 70.6%
- Private investors: 19.5
- Kuwait Investment Authority (Kuwait): 6.8%
- Renault (France): 1.54%
- Nissan (Japan): 1.54%
by region: 29.2% Europe (excluding Germany), 36.4% German, 24.3% United States, 6.8%
Kuwait, 2.9% Asia, 0.4% Others.
In 2015, Daimler held interests in the following companies:
(Refer Exhibit II)
o Mitsubishi Fuso Truck and Bus Corporation of Japan - 89.29%
o Automotive Fuel Cell Cooperation of Canada - 50.1%
o Engine Holding, a joint venture with Rolls Royce - 50%
o Denza (Shenzhen BYD Daimler New Technology Co., Ltd) - 50%
o MV Agusta of Italy - 25%
o Beijing Automotive Group (BAIC) - 12%
o KAMAZ of Russia - 11%
o Aston Martin - 5%
19. by Frahim Adajania
17
Timeline of Daimler AG:
- Benz & Company (1883–1926):
In 1883, Karl Benz, Max Rose and Friedrich Wilhelm Eßlinger founded a new company producing
industrial machines: Benz & Companie Rheinische Gasmotoren-Fabrik, usually referred to as Benz &
Cie. Quickly growing to twenty-five employees, it soon began to produce static gas engines as well.
Benz began to sell the vehicle (advertising it as "Benz Patent Motorwagen") in the late summer of 1888,
making it the first commercially available automobile in history. The second customer of the
Motorwagen was a Parisian bicycle manufacturer Emile Roger, who had already been building Benz
engines under license from Karl Benz for several years. Roger added the Benz automobiles (many built
in France) to the line he carried in Paris and initially most were sold there.
- Daimler Motoren Gesellschaft AG (1890–1926):
It was the company founded by Gottlieb Daimler and Wilhelm Maybach, it was based first in Cannstatt
(today Bad Cannstatt, a city district of Stuttgart). Daimler died in 1900, and their business moved in
1903 to Stuttgart-Untertürkheim after the original factory was destroyed by fire, and again to Berlin in
1922. Other factories were located in Marienfelde (near Berlin) and Sindelfingen (next to Stuttgart).
The enterprise began to produce petrol engines but after the success of a small number of race cars built
on contract by Wilhelm Maybach for Emil Jellinek, it began to produce the Mercedes model of 1902.
After this automobile production expanded to become DMG's main product, and it built several models.
- Daimler-Benz AG (1926–1998):
Founded in 1926, based on an Agreement of Mutual Interest - which was valid until 2000 - was signed
on 1 May 1924 between Karl Benz's Benz & Cie. and Daimler-Motoren-Gesellschaft, which had been
founded by Gottlieb Daimler and Wilhelm Maybach.
- DaimlerChrysler AG (1998–2007):
Daimler-Benz AG and United States-based automobile manufacturer Chrysler Corporation, the smallest
of the main three American automakers, merged in 1998 in an exchange of shares and formed
DaimlerChrysler AG. The terms of the merger allowed Daimler-Benz's non-automotive businesses such
as Daimler-Benz InterServices AG, "debis AG" for short, (created in 1989 to handle data processing,
financial and insurance services, and real estate management for the Daimler group) to continue to
pursue their respective strategies of expansion. Daimler agreed to sell the Chrysler unit to Cerberus
Capital Management in May 2007 for US$6 billion. Chrysler reported losses of US$1.5 billion in 2006.
It then announced plans to lay off 13,000 employees in mid-February 2007, close a major assembly
plant and reduce production at other plants in order to restore profitability by 2008.
- Daimler AG (2007–present):
After the sale of Chrysler in 2007, the name of the company was changed to Daimler AG and remains
to be so till date. With its divisions Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans,
Daimler Buses, Daimler Financial Services and stakes in other companies, the Daimler Group is one of
the biggest producers of premium cars and the world’s biggest manufacturer of commercial vehicles
with a global reach. Daimler Financial Services provides financing, leasing, fleet management,
insurance, financial investments, credit cards, and innovative mobility services.
20. by Frahim Adajania
18
SWOT analysis of Mercedes:
Strengths:
High TOMA: Mercedes is a well-established brand & it is part of the “German Big 3” luxury
automakers, along with Audi and BMW, which are the best-selling luxury automakers in the world.
It focuses its sponsorship spending on events that attract a well-heeled crowd. Its three pillars are golf,
tennis and New York’s Fashion Week. The company won its first Constructors’ Championship as the
top team in F1 in 2014.
1. Manufacturing facilities worldwide: Mercedes has manufacturing facilities across 6 continents
and in 26 countries including for both passenger cars & buses which is in turn is helping them to
keep their operational cost low & thereby increase their profit.
2. Continuous Product Innovation: the Parent company of Mercedes- Daimler has always been
known for its technological advancement right from introduction of internal combustion engine in
1886 to “Pre-safe” technology in 2013. The Company has travelled far to establish itself in the
premium passenger car/trucks segment. Mercedes concerned about safety features of the vehicle.
3. Financial stability: Strong financial position of the parent company Daimler which has several
other world-renowned brands is helping the group companies in minimizing their operational cost
by using shared resources.
4. Strong hold in the developing nations: Premium automobile players like AUDI, BMW etc. who
are excelling in the developed economies are being trailed by Mercedes in developing nations like
India. Mercedes is focused on becoming No.1 player in developing markets& that’s what driving
their growth.
5. Product Portfolio: Mercedes have strong product portfolio ranging from sedan to SUV which is
helping them to compete with other players in the market.
Weaknesses:
1. Expensive After sales service & maintenance: Servicing cost is one of the important deciding
factors which ever vehicle you are planning to buy. Mercedes servicing cost is high as compared to
other players in the same segment.
2. Conflicting goals of the group companies: It may happen that Daimler itself being such a big
group can fall prey of conflicting objectives of the group companies which may affect its individual
brand.
3. Distribution is stunted – Although Mercedes could expand strongly, however, it is found to have
a stunted growth because it keeps distribution of its vehicle very much exclusive, which affects its
supply and therefore its brand equity.
21. by Frahim Adajania
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Opportunities:
1. Growth shifting to Asian markets: Although American & European market is the pulse of this
Industry, but the focus is shifting to developing markets like China, India & other Asian nations
because of rise in disposable income, changing lifestyle & stable economic conditions.
2. Increase in demand of premium vehicles: Companies like VOLVO, Audi, BMW etc. are betting
high & are targeting the developing nations due to increase in demand of Luxury public
transportation system.
3. Strategic Alliances: This can prove smart strategy for Automobile companies. By using specialized
capabilities & partnering with other company they can differentiate their offerings.
4. Growing Automobile industry: Automobiles represent freedom and economic growth.
Automobiles allow people to live, work and play in ways that were unimaginable a century ago.
Automobiles provide access to markets, to doctors, to jobs. Nearly every trip ends with either an
economic transaction or some other benefit to the quality of life.
5. Technological advancement: Developing fuel efficient futuristic technology & hybrid cars can
help Mercedes in emerging as a market leader globally.
Threats:
1. Intense Competition from other players in the segment: Presence of players such as AUDI, BMW,
Volvo etc. who are not leaving any stone unturned to emerge as a global player and leader in most of
the markets.
2. Volatility in the fuel Prices: At least for the passenger segment fluctuations in the fuel prices remains
the determining factor for its growth. Also, government regulations relating the use of alternative fuels
like CNG. Shell gas is also affecting the inventories.
3. Sluggish Economy: Macroeconomic uncertainty, Recession, un-employment etc. are the economic
indicators which will daunt the automobile industry for a long period of time.
4. High fixed cost and investment in R & D: Due to the fact that mature markets are already
overcrowded, Industry is shifting towards emerging markets by building facilities, R & D centres but
benefit of these decisions is yet to be capitalized.
5. Government Regulations: Government policies like reduction in global warming by discouraging the
use of personal transportation, reducing the road permit validity, volatility in fuel prices, restricting the
entry of outside state vehicles are some of the policies/regulation which are already been implemented
in respective regions in the world and is affecting the sector by & large
22. by Frahim Adajania
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Exhibits:
Exhibit I
Exhibit II
71%
19%
7%
1%
2%
Shareholder Structure by Ownership
(2017)
Institutional investors
Private investors
Kuwait Investment Authority
(Kuwait)
Renault (France)
Nissan (Japan)
Pie chart created by the group || Data Source:https://en.wikipedia.org/wiki/Daimler_AG
30%
17%
17%
17%
9%
4%
4%
2%
Holdings
(2015)
Mitsubishi Fuso Truck and Bus
Corporation of Japan
Automotive Fuel Cell Cooperation
of Canada
Engine Holding
Denza
MV Agusta of Italy
Beijing Automotive Group (BAIC)
KAMAZ
Aston Martin
Pie Chart Created by the group || Data Source:https://en.wikipedia.org/wiki/Daimler_AG
24. by Frahim Adajania
22
Exhibit VI
Exhibit VII
Exhibits III, IV, V, VI & VII - Reference:https://www.daimler.com/investors/reports-news/annual-reports/2017/bodo-uebber-
with-facts-and-figures.html