Daimler had decided some serious changes need to be made before the end of 2021, including a name swap and separate listing for its commercial truck division. While the reason given was to better facilitate the company’s transition toward a “zero- emissions and software-driven future,” investors have been critical of Daimler’s share price after it cratered in March of last year. Though we would argue the bigger concern is the automaker’s lackluster (or absent) growth and declining revenue since 2018.
Regardless, CEO Ola Källenius believes continued changes to the firm’s corporate structure are the only way to go. By 2022, Daimler will simply be known as Mercedes-Benz and have spun off Daimler Trucks with its own listing on the Frankfurt stock exchange.
Based on rival manufacturers who have taken similar measures (e.g. Volvo), Daimler leadership assumes its truck and bus division can might see broader operating margins if its allowed to fly solo. This is especially important for Daimler’s European trucking operations, which have been struggling far worse than their American equivalent at Freightliner.
“This is a historic moment for Daimler,” Ola Källenius, Chairman of the Board of Management of Daimler and Mercedes-Benz, said in Wednesday’s release. “It represents the start of a profound reshaping of the company. Mercedes-Benz Cars & Vans and Daimler Trucks & Buses are different businesses with specific customer groups, technology paths and capital needs. Mercedes-Benz is the world’s most valuable luxury car brand, offering the most desirable cars to discerning customers. Daimler Truck supplies industry leading transportation solutions and services to customers. Both companies operate in industries that are facing major technological and structural changes. Given this context, we believe they will be able to operate most effectively as independent entities, equipped with strong net liquidity and free from the constraints of a conglomerate structure.”
By raising the profitability of Daimler Trucks, it’s also assumed that the unit will be in a better position to develop and implement advanced technologies. This includes the obligatory battery and fuel-cell trucks, in addition to autonomous driving functionalities. There’s also a customer retention program in the works that will be tied to mobility and data services.
From Daimler:
As part of a more focused corporate structure, both Mercedes-Benz and Daimler Truck will also be supported by dedicated captive financial and mobility service entities, driving sales with tailor-made financing, leasing and mobility solutions, increasing retention and building customer loyalty. In this process, the company plans to assign resources and teams from today’s Daimler Mobility to both Mercedes-Benz and Daimler Truck.
While the exact timing has yet to be decided, Daimler stated that “a significant majority stake” in the trucking business will be distributed to shareholders. Daimler Truck will have a wholly independent management team and an independent Chairman of the Supervisory Board. It’s expected to be listed on the Frankfurt stock exchange by the end of 2021. A separate announcement regarding the name change (and any other tweaks made to Mercedes-Benz) has also been planned.
“We have confidence in the financial and operational strength of our two vehicle divisions. And we are convinced that independent management and governance will allow them to operate even faster, invest more ambitiously, target growth and cooperation, and thus be significantly more agile and competitive,” Källenius stated.
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