Daimler Financial Services

The number of cars and commercial vehicles financed or leased by Daimler Financial Services reached a new all-time high of more than 5.2 million at the end of financial year 2018. Contract volume developed positively, while EBIT was significantly lower than in the prior year, mainly as a result of the agreement reached to end the Toll Collect arbitration proceedings. The combination of sales financing with brokered automotive insurance policies continues to gain importance. The division’s range of innovative mobility services was further expanded. Today, services such as car2go, moovel and the ride-hailing group with its mytaxi, Beat, Clever Taxi and Chauffeur Privé brands are used by 31.0 million customers all over the world. In 2018, we also announced plans to establish a new joint venture for mobility services with BMW.

Half of all Daimler vehicles delivered to customers are financed or leased

Daimler Financial Services concluded 2.0 million new financing and leasing contracts worth a total of €71.9 billion in 2018. The total value of all new contracts was thus slightly above the prior-year level (+2 %). About half of all new-vehicle sales by our automotive divisions in 2018 were supported by sales financing from Daimler Financial Services. In total, more than 5.2 million financed or leased vehicles were on the books at the end of 2018 with a total contract volume of €154.1 billion; this represents a 10 % increase compared with the end of 2017. EBIT amounted to €1,384 million (2017: €1,970 million). (See table C.09)

C.09 Daimler Financial Services

  2018 2017 18/17
€ amounts in millions     % change
       
Revenue 26,269 24,530  1 +7
EBIT 1,384 1,970 -30
Return on equity (in %) 11.1 17.7 .
New business 71,927 70,721 +2
Contract volume 154,072 139,907 +10
Investment in property,
plant and equipment

64

43

+49
Employees (December 31) 14,070 13,012 +8

1 This amount has been adjusted due to first-time adoption of IFRS 15 and IFRS 9. The Group’s internal revenue and cost of sales have been adjusted by the same amount at the Daimler Financial Services segment. These adjustments have been fully eliminated in the reconciliation.

Moderate increase in new business in Europe

Daimler Financial Services concluded 970,000 new financing and leasing contracts worth €31.7 billion in the Europe region (+2 %). Especially high rates of growth were recorded in Poland (+28 %) and France (+21 %). In Turkey, new business decreased sharply (-37 %) due to the tense political and economic environment in that country. In Germany, Mercedes-Benz Bank’s new business increased by 3 % to €13.2 billion. Daimler Financial Services’ total contract volume in Europe rose by 8 % to €64.2 billion.

Slight growth in the Americas

Daimler Financial Services brokered 483,000 new financing and leasing contracts worth €22.5 billion in the Americas region in 2018 (+3 %). The volume of new business developed very well in Brazil (+25 %). Contract volume in the Americas region of €56.1 billion at December 31, 2018 was clearly higher than at the end of 2017 (+11 %). Adjusted for exchange-rate effects, contract volume increased by 8 %.

Africa & Asia-Pacific region and China: new business at prior-year level

New business in the Africa & Asia-Pacific region (excluding China) decreased slightly compared with the previous year, by 3 % to €8.2 billion. Business growth was especially strong in Thailand (+24 %). New business decreased significantly in India (-10 %) and South Africa (-13 %). At the end of 2018, contract volume in the Africa & Asia-Pacific region (excluding China) totaled €18.3 billion, representing a 6 % increase over the previous year. New business increased moderately in China, however, where 319,000 new leasing and financing contracts worth €9.6 billion were concluded in 2018 (+2 %). At the end of 2018, contract volume in China amounted to €15.4 billion – an increase of 26 % compared with the end of 2017.

Further growth in the insurance business

Daimler Financial Services brokered approximately 2.3 million insurance policies in 2018 – an increase of 8 % compared to the prior year. Business developments were particularly positive in China, Spain and Russia. More customized insurance solutions are now needed in view of the trend toward greater flexibility in vehicle use, for example in the areas of connectivity, telematics, mobility services and flat rates for leasing contracts.

New name: Daimler Mobility AG

Daimler Financial Services AG plans to change its name to Daimler Mobility AG in the second half of 2019. The Daimler Financial Services division, which has approximately 14,070 employees, is already well known as the Daimler Group’s provider of mobility services, which include car2go, moovel and the ride-hailing group with its mytaxi, Beat, Clever Taxi and Chauffeur Privé brands. The renaming underscores the division’s transformation into a provider of mobility services and is one of the components of “Project Future”, which is designed to strengthen the divisional structure of the Daimler Group. Approximately 31.0 million customers currently make use of the range of mobility services the division offers. Experts believe the market for mobility services will generate hundreds of billions in revenue over the next decade, and Daimler Mobility AG wants to play a key role in this development.

Mobility services remain on course for success

Daimler Financial Services once again expanded its range of innovative mobility services in 2018. The number of registered users of the car2go car-sharing service increased to 3.6 million, enabling car2go to consolidate its position as a leading company for flexible car sharing. car2go also continuously further developed its services during the year under review. For example, the company introduced a new pricing model that enables customers to rent cars at a lower rate on the outskirts of a city, which also serves to further increase vehicle availability in cities. In addition, car2go now offers customers greater flexibility by allowing them to extend their vehicle reservation period if they need to keep a car longer than planned. car2go opened its tenth North American location in Chicago in July 2018. During the same month, the first smart convertibles were added to the car2go fleet in Rome. At the beginning of 2019, a new European location was opened in Paris, which is served by a fleet of 400 all-electric smart models.

We move you! Daimler Financial Services

The moovel app also underwent further development. moovel enables customers in Germany to compare various mobility and transport-system options and then choose the best way to get from point A to point B. The app can also be used to book and directly pay for services provided by companies such as car2go, mytaxi and local public transport operators. In June 2018, moovel and the SSB transport company in Stuttgart established the “SSB Flex” service, and in November 2018, moovel and Rheinbahn teamed up to create the “Mobil in Düsseldorf” app. moovel is also one of the leading providers of mobile ticketing solutions for public transport companies in the United States. All in all, moovel North America offers 19 services in 15 US cities. In October 2018, FASTLink DTLA – a non-profit transportation management initiative – and moovel North America announced plans to launch a new on-demand ride-sharing pilot project in Los Angeles. The project, which has been given the name FlexLA, will supplement the services offered by the city’s public transit network. The number of registered moovel app users in Germany and the United States had risen to 6.2 million by the end of 2018 (2017: 3.7 million).

The ride-hailing group behind mytaxi further strengthened its position as one of the leading providers of taxi apps in Europe in 2018, among other things, by acquiring a majority stake in Chauffeur Privé. Ride-hailing group services which were already available in the United Kingdom, Ireland, Greece, Romania and France have now been extended to cover a total of 12 European countries – and have also been launched in fast-growing markets in Central and South America (Peru, Columbia and Chile). A total of 390,000 drivers in more than 110 cities have now registered with the ride-hailing group’s companies. The number of registered users of the ride-hailing group’s services increased by 92 % to 21.3 million in 2018. mytaxi has also created its own scooter brand with the “hive” e-scooter pilot project: Several hundred e-scooters are available in Portugal’s capital, Lisbon, where they offer a genuine alternative for local transport.

Cooperation with BMW

Daimler AG and the BMW Group are joining forces to offer their customers sustainable urban mobility services from a single source in the future. The authorities have now approved the companies’ plan to establish the joint venture. After completion of the complex transaction on January 31, 2019, the new mobility services company, Daimler AG and the BMW Group will make a joint announcement in the first quarter of 2019 regarding the next steps to be taken. The headquarters of the new joint mobility-services company will be located in Berlin. Our goal is to jointly create a major global player for seamless and intelligent connected mobility services. As a hub for creativity and innovation, Berlin is exactly the right location for our plans. The 50-50 joint venture will bring together the following services: an on-demand mobility and multimodal mobility platform, car sharing, ride hailing, parking, and charging for electric vehicles.

Joint venture for premium ride-hailing services in China

Daimler Mobility Services and Geely Group Company will establish a premium ride-hailing service in China, subject to the approval of the regulatory authorities. The new company plans to begin offering a ride-hailing service with premium vehicles in several Chinese cities in 2019. The initial fleet will include Mercedes-Benz S-Class, E-Class, V-Class and Maybach vehicles, as well as premium models from the Geely electric fleet. The 50-50 joint venture will be headquartered in Hangzhou; each partner will have an equal number of seats on the company’s board of management.

Expansion of fleet management operations

Daimler Financial Services once again expanded its fleet management activities in 2018. A total of 395,000 contracts were on the books at Athlon and Daimler Fleet Management in Europe at the end of 2018, which represents an increase of 3 % compared with the prior year. The total fleet management contract volume amounted to €6.5 billion. Plans now call for all fleet management activities to eventually be consolidated under the Athlon brand name. Athlon gained new international customers in 2018 and strengthened its market position as a provider of comprehensive fleet management and mobility solutions for commercial customers. This development also had a positive impact on sales of Mercedes-Benz cars and vans. With “connect business,” Mercedes-Benz Connectivity Services also offers cross-brand connectivity services for telematics-based car fleet management in several European countries.

heycar: Daimler invests in a used-vehicle platform

In September 2018, Daimler Financial Services announced it had signed an agreement on the planned acquisition of an interest in the heycar used-vehicle platform. This strategic investment will allow Daimler Financial Services to further expand a cross-brand platform for manufacturers, dealers, automotive banks and customers that offers everything from purchasing to financing and insurance – all from a single source.

Investment in artificial intelligence

Daimler Financial Services has invested in the New Zealand company Soul Machines in order to implement artificial and emotional intelligence systems in future sales processes. The start-up is a pioneer in the field of emotional intelligence for use in machines and digital avatars. Daimler is the first premium automobile manufacturer to invest in the development of emotional intelligence application scenarios.

Outstanding results in employer rankings

Customer and employee satisfaction is a top priority at Daimler Financial Services. In 2018, independent surveys once again showed that the company is a leader in numerous countries around the world with regard to automobile customers’ and dealers’ assessments of our service quality. The Great Place to Work Institute recognizes global employers for their exceptional corporate culture. Last year, Daimler Financial Services was one of two German companies to rank among the top 10 employers in the world in that survey. A total of approximately 7,000 companies with more than 5,000 employees participated. In the German survey, Daimler Financial Services finished first out of about 800 companies, thus earning itself the title of “Best employer in Germany in 2018” in the category of 2,001 to 5,000 employees.

Toll Collect agreement

In May 2018, Daimler Financial Services reached an agreement with Deutsche Telekom AG (consortium partner) and the German government on ending the arbitration proceedings regarding Toll Collect. (See Corporate Profile)

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