- Group grows despite a depressed South African vehicle market
- One in every four trucks sold by Mercedes-Benz South Africa

Bedfordview, Johannesburg – Despite the most difficult trading conditions experienced in the past decade, the Mercedes-Benz group of companies in South Africa still posted sterling financial results in 2009, with total annualised revenues of R28 billion.

Reporting their annual results, the group of companies - Mercedes-Benz South Africa (MBSA), Mercedes-Benz Financial Services (MBFS), debis Fleet Management (dFM), Sandown Motor Holdings and Atlantis Foundries - also recorded pleasing overall growth in market shares across most sectors of their business.

With the overall South African vehicle market returning to the levels of 2003 and 2004 on the passenger car and truck side respectively, both of these markets were down a significant 50% in 2009 compared to those earlier high levels.

“Despite this shrinking of the overall vehicle market, we at MBSA are most encouraged in that we only shed 15% on the passenger car side,” explained President and CEO, Dr Hansgeorg Niefer. Presenting the group’s results to the media at the Mercedes-Benz Lifestyle Centre in Bedfordview, Johannesburg, Niefer said, “While we anticipated a decrease in the group’s annual consolidated turnover, we are extremely pleased at having gained market share in our business.”

Mercedes-Benz South Africa gained nearly a percentage point in the premium car sector, while it increased its commercial vehicle market dominance by a further 1.8% to lead by an overall market share of 25.7% in the over 3.5 tonne segments.

“Leading the charge has literally been our preserve in the commercial vehicle market in South Africa for over a decade now. Our company currently sells one in every four trucks in South Africa,” said Niefer.

“If you take into consideration that in both markets (passenger cars and commercial vehicles) the industry saw the toughest competition in many years, we as a team – employees, suppliers and dealers – managed to record a very robust performance in what is surely the most difficult time of the past decade. That doesn’t, however, give us a sense of complacency. Instead, we are working even harder on our success factors,” said Niefer.

Despite the drop in turnover and the overall downturn in the market, the group’s premium Mercedes-Benz passenger car unit managed to achieve a near 1% growth, maintaining its position at almost 10% of the premium car segment.

“This was helped in no small measure by the superb quality achievements at our East London manufacturing plant, which last year proved conclusively that we can produce top quality vehicles,” explained Niefer. The company received the J.D. Power and Associates Gold Award for manufacturing in the 2009 Initial Quality Study (IQS) in the Europe and Africa Region.

“This exceptional award placed our local plant fourth best in the world, ahead of all European, American and African vehicle manufacturing plants. From the initial production of the Mercedes-Benz C-Class, MBSA has stringently followed a robust quality management system supported by all our employees who have fully embraced the ethos of quality.”

“Offering a premium brand, we at MBSA also realise that customers are becoming increasingly more demanding, so we aim to meet this challenge in a positive way and aim to satisfy their needs and expectations,” Niefer explained.

Also locally recognised for superb quality, the group notched up the top three positions in the independent market survey of Synovate in the 2009 Synovate Quality Survey, which ranks passenger cars in South Africa with the least problems per hundred vehicles.

“Mercedes-Benz cars were placed 1st, 2nd and 3rd respectively for our E-Class, C-Class and A-Class,” said Niefer.

Synovate also gave the East London plant the gold award for the top local plant manufacturing passenger vehicles.

Social and natural environment

“At MBSA we aim to live up to our responsibility to society. For years we have been fully committed to development and upliftment. The four focus areas of our corporate social investment (CSI) strategy create both national and regional opportunities for investment in long-term projects that are designed to deliver positive results in the fields of education, safer communities, HIV and Aids, and the environment. National and industry-specific challenges are clearly targeted, and in addition the projects offer great opportunities for staff engagement. The aim of each project is to support meaningful socio-economic investment to facilitate transformation. Our biggest portion of our CSI budget, over 60%, is allotted to education,” said Niefer.

“With regard to our natural environment, MBSA, like its parent Daimler AG, recognises the urgent need to reduce greenhouse gas emissions. For more than 30 years the global company has been recognised as a leader in developing vehicles that are kinder to the environment, either through the reduction of noxious gases, the use of recyclable materials or the implementation of efficient and environmentally friendly manufacturing processes. We have developed numerous vehicle technologies to reduce the negative impact on the environment, without compromising driving safety, comfort, and superior driving performance.”

Outlook for 2010
“While it’s clear we can’t expect to improve to our previous peak within a year, as it took us many years to reach the highs of 2006 and 2007, we could possibly be right up there again in two to three years’ time,” said Niefer.

“As competition in the industry is becoming increasingly tougher much emphasis is also placed on both customer service and sales. Having exciting new products in the pipeline – particularly on the Mercedes-Benz side – obviously places the company in a favourable position. The E-Class family will soon be extended with an E-Class estate and cabriolet. There will also be some other minor facelifts and this year will see the launch of the SLS AMG in the latter half.

“So we are quite optimistic for 2010. But again, it’s hard work to convince current customers to buy another vehicle from our stable, as well as lure new customers currently driving competitors’ products. Painful as it may be at times, MBSA thoroughly enjoys the fierce competition in SA’s vehicle market; it keeps us on our toes. It’s healthy competition, where sometimes we’re ahead and sometimes our competitors are. But you can rest assured we’ll try everything possible to stay ahead of the game all the time. We’ll continue working hard to remain number one in the premium segment for passenger cars and leader in the truck market whilst rendering a premium service.”