Insurance offers and mobility push Daimler FS growth

Daimler Financial Services (FS) has grown its pre-tax earnings to €1.9bn (£1.6bn) for 2017, up 13% year-on-year.

Insurance offers and mobility push Daimler FS growth

New business originations for the year totalled €70bn (up 14% from 2016), helping push revenues up 15% to €23bn.

Daimler said that it was now leasing or financing half of all the vehicles it sold, and cited insurance package offers as one of the contributing factors.

The mobility division, which falls under Daimler FS, also reported growth. Car club car2go increased users to 3m, and cab platform mytaxi grew users by 85% to 11.1m, thanks to mergers with rivals Hailo in Britain, Taxibeat in Greece and Clever Taxi in Romania.

Additionally, Daimler said it was “ideally prepared” to enter the autonomous taxi business, calling it “highly attractive”.

Bodo Uebber, member of the group’s board responsible for Daimler FS, said: “With its mobility services, Daimler Financial Services is a pioneer in the future area of shared and services. From a strategic perspective, we want to achieve four goals with our mobility services: first of all, we want to participate in a rapidly growing market that can reach a three-digit billion amount in the coming years.

“We want to offer our customers a broad ecosystem all around the connected car. In other words, we will make our service portfolio even more attractive and offer additional innovative services. The goal is to develop the required expertise and resources so that we are a leader in the future business with robot taxis.”

Net profits reach new record across wider group

The wider Daimler group also reported record net profits of €10.9bn, up 2.3% from 2016.

The result was driven by an increase of 9% in unit sales, to 3.3m. Mercedes-Benz Cars exceeded forecasts, growing volumes 8% to 2.3m.

China was singled out as one of the biggest-growing markets, with volumes up 28% to 595,000 units. Daimler attributed the result to a strategy of aligning products to Chinese customers’ requirements, by increasing local production and reorganising the sales process.

Though China was expected to contribute significantly to volume growth across all divisions in 2018, Daimler said this would have a modest impact on revenues, as the expansion of the market meant growth for other local producers as well.

Across the group, research and development (R&D) increased significantly, rising 15% to €8.7bn, and Daimler expected a slight increase for 2018 as well.

Uebber said: “Daimler’s success in the past year is apparent in all the group’s figures. With the significant growth in unit sales, revenue and earnings, as well as our attractive product portfolio, we not only strengthened our core business, we also created an excellent starting position to master the challenges of the fundamental transformation of the automotive industry that lie ahead of us.”