Daimler to build on strengths through digitization
At its Annual Shareholders Meeting in Berlin on March 29th, Daimler executives looked back on one of the most successful years for the more than 130-year-old company, but also gave a preview of what’s to come regarding future technical developments.
“We demonstrated once again in 2016: The combination of financial strength and innovativeness is stronger than ever at Daimler,” Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, told the audience of about 6000 shareholders at the CityCube in Berlin. "At the same time, we initiated the biggest transformation in our company history last year."
He said that the future of the car industry is challenged by opposites: electric drive versus combustion engines, autonomous driving versus driving pleasure, owning a car versus shared mobility, or human versus robot. As a result, Zetsche is convinced that mobility will become even more multifaceted: "It is necessary to do one thing without stopping with the other. That's why we are strengthening both: the new and the old."
The company will invest €10 billion in the expansion of its electric vehicle portfolio, launching more than ten new electric models into the market by 2022. On the way to emission-free driving, efficient combustion engines will continue to be a significant element of the solution during the transitional period.
A key bridge technology to full electric mobility is plug-in hybrid drive. Mercedes-Benz already has eight such models, but its next technology leap will come with the new S-Class plug-in hybrid. With the latest lithium-ion technology, its battery-electric range will increase to a maximum of around 50 km (31 mi).
The current state of battery technology will also allow for electric heavy-duty truck advancement. In 2016 at the International Commercial Vehicle Show, Daimler presented its Urban eTruck, which it will launch later this year with a small production run for Europe. The electric-drive truck has a range of up to 200 km (124 mi).
Daimler plans to invest more than €1 billion in its global battery production network. About half of that will be invested at the Daimler subsidiary Deutsche Accumotive in Kamenz.
Daimler is setting up a fast-charging network for electric vehicles in Europe together with other manufacturers and is working with ChargePoint in the U.S. on new products and services connected with electric mobility, both initiatives so that electric cars get established in the market faster.
Another key Daimler focus will be on the development of autonomous driving. Some current Mercedes-Benz cars can, if the driver desires, independently change lanes, apply the brakes in an emergency, or park themselves. Daimler trucks and buses are also pioneers for autonomous driving in their respective sectors.
"Daimler aims to be a leader in autonomous driving—one of the most fascinating aspects of reinventing mobility," said Zetsche. "Mobility-service providers offer an ideal platform for autonomous driving technology."
In late January of this year, Daimler and Uber signed an agreement on the supply and operation of self-driving Mercedes-Benz vehicles on Uber's network. Uber has assembled a strong self-driving engineering group with its Advanced Technologies Group in Pittsburgh, which is testing self-driving vehicles on the road in the U.S. Uber's Otto division is also working on self-driving trucks. Uber has valuable experience that comes from running a ridesharing and delivery network across 74 countries. Daimler is the first auto company to join with Uber after it opened up its platform for manufacturers to introduce their own self-driving cars.
Daimler has also partnered with BMW and Audi to acquire HERE, the specialist in high-definition digital maps, from Nokia in 2015. Since then more companies have joined the consortium, helping to advance this key technology for autonomous driving.
Daimler is selectively entering into a number of cooperative ventures to fulfill its overall claim to technology leadership.
"We want to have control over what differentiates us from the competition. In other areas, we are increasingly cooperating with other companies," explained Zetsche.
These partnerships fall under a new corporate strategy called CASE—standing for Connected, Autonomous, Shared & Services, and Electric—meant to define Mercedes-Benz Cars’ future success and reshape mobility. They are meant to cement Daimler as a pioneer in self-driving vehicle technologies.
As with Ford Motor Co. and others, Daimler has a goal of transforming itself from an automobile manufacturer into a provider of mobility services. With its car2go operation, the company is currently testing peer-to-peer car sharing with privately owned cars with Croove in Munich. Daimler’s mytaxi is said to be the biggest app-based taxi network in Europe. The mobility app, moovel, provides direct access to several mobility services, including booking and payment.
The company’s goal is to offer what customers want, said Zetsche, as it develops from a premium manufacturer into a mobility provider. Daimler wants to offer both “emotional products that people want to own, and innovative mobility concepts for those who don't necessarily want to have a car of their own.”
Along with the cultural transformations such as the “Leadership 2020" project introduced in 2015, teams are being organized at Daimler that work like startups with fast decision making and greater freedom.
"Perfection and entrepreneurial spirit are not a question of 'either/or'—we are strengthening both," said Zetche. For example, Daimler is encouraging its employees' pioneering spirit by providing risk capital for the implementation of new ideas or with streamlined decision processes on two hierarchy levels.
Daimler aims to achieve an annual average return on sales of 9% in the automotive business on a sustainable basis. This is based on the return on sales of the divisions in 2016: 10% for Mercedes-Benz Cars, 8% for Daimler Trucks, 9% for Mercedes-Benz Vans, and 6% for Daimler Buses.
"Those who want to stay in front must constantly develop. That applies to cars and to companies," said Zetsche. "After all, questioning the established mobility system was our starting point with the invention of the automobile more than 130 years ago."