Why is the US using less Daimler trucks?

By Sumit Modi

Daimler has enjoyed a huge third quarter profit rise this week, beating the forecast numbers by 13 percent.

 

This has been achieved thanks to positive sales of Mercedes-Benz luxury cars, but the forecast did have to be lowered due to low demand for Daimler’s trucks. The trucks and buses division failed to match earnings from Q3 of last year thanks to key markets like North America and Brazil dropping their orders.

Christian Stadler is a Professor of Strategic Management at Warwick Business School, and researches the car industry. He commented on this news: "The car business is going well for Daimler, but the area where they have some challenges is the truck division, which is a problem for the whole industry because markets in the US and developing countries like Brazil are slowing.

“Also in the US Daimler is facing stiffer competition in the truck sector because Volkswagen is getting its act together. VW has a big stake in Navistar and is making them a strong competitor.

“The big strategic challenge in the future is self-driving cars. A lot of observers have been predicting disruption for car manufacturers from the likes of Apple, Google and Uber developing self-driving cars and predicting the end of the need for consumers to even own cars.

“But the news that Apple is ditching its car project suggests the development of self-driving cars will be more incremental, especially as regulations in the US are complex, car companies have strong brands and a sudden switch would be daunting for consumers.

“Daimler is strong on technological development; it was the first company to get permission to test self-driving cars in California, and it is strong around digitalisation of cars, so it is in a good position for the long-term.

“Also, autonomous technology is likely to find a quicker route into trucks and so Daimler will be able to learn and develop the technology before moving it into cars.”

 

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