Mercedes-Benz Group AG | Annual Report 1983

Automotive | Mercedes-Benz Group AG

Daimler-Benz Worldwide - Highlights

Daimler-Benz

Aktiengesellschaft

Stuttgart

Annual Report

1983

Table of Contents

Agenda for the Stockholders' Meeting

Members of the Supervisory Board

and the Board of Management

Report of the Board of

Management

Status Report

Outlook

Research and Development

Purchasing

Production

Sales

Employment

Subsidiaries and Affiliated

Companies

Notes to Financial Statements of

Daimler-Benz AG

Proposal for the Allocation of

Unappropriated Surplus

Report of the

Supervisory Board

Financial Statements

of Daimler-Benz AG

Balance Sheet

Statement of Income

Consolidated

Annual Report

Notes to Consolidated

Financial Statements

Consolidated Balance Sheet

Consolidated Statement of Income

Appendix

Daimler-Benz Highlights

Sales and Production Data

Charts and Graphs Relating

to Automobile Industry Trends

in Leading Countries

Agenda

for the 88th Stockholders' Meeting

being held on Wednesday July 4,1984 at 10 a.m. in the

Hanns-Martin-Schleyer-Halle in Stuttgart-Bad Cannstatt, Mercedesstraße.

. Presentation of the audited financial statements as of December 31,1983

the reports of the Board of Management and the Supervisory

Board together with the consolidated financial statements and the con•

solidated annual report of the year 1983.

3. Ratification of the Board of Management's actions.

Board of Management and Supervisory Board propose ratification.

4. Ratification of the Supervisory Board's actions.

Board of Management and Supervisory Board propose ratification.

5. Election of auditors for the business year 1984.

The Supervisory Board proposes to elect Deutsche Treuhand-

Gesellschaft AG, Wirtschaftspruefungsgesellschaft, Frankfurt (Main),

as independent auditors for the business year 1984.

_ _ _

Supervisory Board (Aufsichtsrat)

Hermann J. Abs, Frankfurt (Main)

Honorary Chairman Dr. rer. pol. Wolfgang Roeller, Frankfurt (Main)

Honorary Chairman, Deutsche Bank AG

Member of the Board of Management, Dresdner Bank AG

Alfred Schaible, Renningen*)

Chairman of the Labor Council, Sindelfingen Plant

Dr. rer. pol. Wilfried Guth, Frankfurt (Main) Chairman

Dr. jur. Roland Schelling, Stuttgart (since July 6,1983)

Member of the Board of Management, Deutsche Bank AG

Attorney at Law

Herbert Lucy, Mannheim*)

Deputy Chairman

Dr. jur. Walter Seipp, Frankfurt (Main)

Chairman of the Labor Council, Daimler-Benz AG

Chairman of the Board of Management, Commerzbank AG

Dr. phil. Dr. rer. oec h. c. Marcus Bierich, Muenchen

Franz Steinkuehler, Stuttgart*)

Chairman of the Supervisory Board, Mercedes-Automobil-Holding AG

Second Chairman, Metal Workers' Union

Willi Boehm, Kandel*)

Dipl.-lng. Maria-Christine Fuerstin von Urach, Stuttgart*)

Member of the Labor Council, Woerth Plant

Director

Dr. rer. pol. Friedrich Karl Flick, Duesseldorf

Diplom-Kaufmann Guenter Vogelsang, Duesseldorf

Bernhard Wurl, Mainz*)

Managing Partner, Friedrich Flick Industrieverwaltung KGaA

Helmut Funk, Stuttgart*) (since July 6, 1983)

Chairman of the Labor Council, Untertuerkheim Plant and Main Office

Deputy Departmental Manager within the Board of Management,

Metal Workers' Union

Richard Helken, Achim-Bierden*) (since July 6, 1983)

Prof. Dr. jur. Joachim Zahn, Muenchen

Chairman of the Labor Council, Bremen Plant

Dr. rer. pol. Alfred Herrhausen, Duesseldorf

Left the Supervisory Board July 6, 1983:

Member of the Board of Management, Deutsche Bank AG

Rudolf Kuda, Frankfurt (Main)*)

Karl Aspacher, Stuttgart*)

Departmental Manager within the Board of Management, Metal Workers' Union

Member of the Labor Council, Untertuerkheim Plant and Main Office

Hugo Lotze, Reinhardshagen*)

Prof. Dr. jur. Gunther Hartmann, Koeln

Chairman of the Labor Council, Kassel Plant

Member of the Board of Management, Mercedes-Automobil-Holding AG

Dr. jur. Heribald Naerger, Muenchen

Erich Hirth, Gaggenau*)

Member of the Board of Management, Siemens AG

Chairman of the Labor Council, Gaggenau Plant

*) Elected by the employees.

Board of Management (Vorstand)

Prof. Dr.-lng. E. h. Werner Breitschwerdt, Stuttgart

Chairman (since December 1, 1983)

Hans-Juergen Hinrichs, Stuttgart

Sales

Dr. rer. pol. Gerhard Liener, Stuttgart

Subsidiaries and Affiliated Companies

Dr.-lng. E. h. Werner Niefer, Stuttgart

Production

Edzard Reuter, Stuttgart

Finance

Walter Ulsamer, Stuttgart

Purchasing

Dr. jur. Manfred Gentz, Stuttgart (deputy member)

(since April 1, 1983)

Employment

Dr.-lng. Rudolf Hoernig, Stuttgart (deputy member)

(

since May 3, 1984)

Research and Development

Left the Board of Management:

Dr. jur. Gerhard Prinz, Stuttgart

(deceased October 29, 1983)

Chairman

Dr. jur. Richard Osswald, Stuttgart

(retired March 31, 1983)

Personnel and Social Welfare, Administration

Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen.

Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures.

It was omitted in the pdffile to improve the usability of the file size.

Report of the Board of Management

Status Report

Overview

In 1983, following a long reces•

sion, economic recovery set in in

most Western industrial countries.

The vigorous upswing in the U.S.A.

also had a beneficial effect on its

economic upturn in 1983 owing to the market, where we had an increase of

rebound of domestic demand; short- 14.0 %, to DM 15.2 billion. Our foreign

time work was reduced; employment

picked up. Once again, it was the

industry's renewed large capital invest•

ments, amounting to more than DM

9 billion, which had a positive effect.

sales declined 3.0 %, to DM 24.8

billion, due to declining commercial

vehicle sales. The foreign share of

consolidated sales fell accordingly, to

62.1 % (last year 65.8 %).

trading partners, most of all Japan. In Despite fewer exports of commercial

Group car sales increased DM

Western Europe, with the exception

of France and Italy, expansive forces

prevailed. However, unemployment

vehicles, the motor vehicle industry

remained the largest revenue-

producing exporter. The motor vehi•

2.3 billion, to DM 21.1 billion; this cor•

responds to a growth rate of 12.2 %.

In contrast, commercial vehicle sales

declined DM 1.2 billion, to DM 17.7

billion. The structure of consolidated

almost everywhere is still depressing- cle trade surplus of DM 52 billion in

ly high. A major element of uncertain• 1983 was higher than the entire

ty for the world economy emanated

from the foreign indebtedness of

numerous newly-industrializing and

developing countries. Their burdens

were further aggravated by the

movement of interest and dollar

exchange rates.

German foreign trade surplus of only sales thus changed: the car share

DM 42 billion. This underscores the

increased to 52.5 % (last year 48.1 %)

significance of the motor vehicle for

and the commercial vehicle share

the economy of the Federal Republic dropped to 44.1 % (last year 48.5 %).

of Germany and shows the weight of

the international competitiveness

which is attributable to the industry.

In 1983, Daimler-Benz continued

This is the first time since 1973 that

cars sales were higher than commer•

cial vehicle sales.

Daimler-Benz AG alone had a

the steady growth in the car sector of sales increase of about DM 1 .1 billion,

Forces of Cyclical Expansion

Grow Stronger in 1983

the past years, tapping new market

reaching DM 32.2 billion (up 3.4%).

potential with the new series 190. In

The domestic market added about

the commercial vehicle sector in con• DM 2 billion to sales, divided about

In the Federal Republic of Ger•

many, the economic process was

characterized by a gradual improve•

ment of business conditions. Con•

trary to previous upward phases, the

trast, our company was also affected

equally between the two large divi•

by the poor economic conditions of

sions, cars and commercial vehicles.

important markets abroad. Neverthe• Export sales, however, declined by

less, we were able to maintain our

about DM 1 billion, with an increase

for cars making up for half of the

drop of DM 2 billion in the commer•

cial vehicle sector. The export share

of sales fell from 57.3 % last year to

employment levels overall and, more• 52.4 %, but still is appreciably above

over, create more than 2,000 new

impetus was provided by the domes• strong position around the world,

tic market first, mainly by private

even extend it in some markets. The

consumption initially, later also by the good capacity utilization at our car

growing willingness for capital invest• plants enabled us to maintain high

ments by businesses. From the mid•

dle of the year, exports picked up

the average of the last ten years.

Our largest export market contin•

again. Exports to the dollar area were jobs in Germany.

benefitted by the low valuation of the

ued to be Europe. With DM 6 billion

D-mark vis-a-vis the U.S. dollar. In

Europe, on the other hand, the D-mark

was revalued in real terms in 1983

vis-a-vis the currencies of important

trading partners.

in sales to the European mar•

kets, which are crucial to the stable

employment of our domestic plants,

Sales Increased

by More Than DM 1 Billion

Consolidated sales rose 2.8 %, to we repeated last year's high volume,

DM 40 billion in 1983. Contrary to the but experienced partly opposite trends

The German automobile industry

made a substantial contribution to the derived solely from the domestic

two previous years, the growth was

in individual countries. Our exports to

the Middle East and North Africa fell

Status Report

11_

0 %, to DM 4.2 billion, due to the

The domestic capital investments

of DM 3.1 billion (last year DM 3.0

billion) were allocated to the different

divisions as follows:

our new diesel engine which is

offered in the 190 D.

In the commercial vehicle division

more than half of the investments

went into program and product-

related projects, chiefly the new vehi•

cles of the light "Woerth" trucks of

6.5 tons to 11 tons GVW. In addition,

we made further progress in consoli•

dating van production at the Duessel-

dorf plant. The transfer of the produc•

tion of light vans from Bremen to

Duesseldorf, which will be completed

in mid-1984, is an important step to

market-induced poor commercial

vehicle business. On the other hand,

our sales to North America - almost

all cars - rose 19 %, to DM 4 billion.

The value added by our foreign

subsidiaries, after deducting inter•

company sales, was DM 7.9 billion

(last year DM 7.8 billion). Sales of our

commercial vehicle manufacturing

companies in South and North Ameri•

ca, and in Spain declined DM

.2 billion; the sales losses in Brazil

could not be fully offset by sales

increases of our U.S. heavy-duty

truck maker Freightliner.

Our distribution companies, with

which we are present in all major

markets, increased sales DM 1 .1 bil•

lion in 1983 and thus were able to

The bulk of our capital invest•

ments once again centered on the car streamline our manufacturing setup.

division, above all the preparations

for production of the 190 at the Bre•

With our investments we strive at

the same time to provide better work•

men factory, whose development into ing conditions for our employees,

an autonomous car plant was comple• particularly to free them even more

ted according to schedule. The prepro- from heavy manual and monotonous

raise the value they added to consoli• duction series began in the autumn

labor. During the year, we spent

dated sales by DM .3 billion. Here

again, the focus was on the U.S.A.

of 1983. The close pooling of produc• about DM 150 million on environmen•

tion with Sindelfingen is being fully

utilized now. In the Untertuerkheim

plant, we completed the facilities for

tal protection. Substantial progress

was achieved in waste water purifica•

tion and waste disposal.

DM 5 Billion for the Future of the

Company Entirely Self-Financed

To maintain and further enhance

our competitiveness, substantial

resources were employed again in

983. Our expenditures for research

and development climbed to DM

.5 billion(last year DM 1.4 billion).

In continuation of our medium-term

investment program, we invested

DM 3.5 billion in fixed assets world•

wide (last year DM 3.4 billion).

The most successful Mercedes-Benz model:

since production start-up in 1976, more

than 2.5 million vehicles of the models 200 D

to 280 E have been produced.

12.

Foreign Sales by Regions

(in millions of DM)

Sales by Segments

Status Report

In 1983, our foreign subsidiaries

lies an important key to the continued ings were positively influenced by

again invested DM .4 billion in fixed

assets, with emphasis on Mercedes-

Benz do Brasil and on our distribu•

tion companies in North America, the

United Kingdom and Belgium.

success of our enterprise.

the favorable utilization of capacities

in our car plants, and particularly the

above-average increase for S-Class

and hi-line models. Moreover, the

exchange rate trend worked to our

benefit for car exports to the dollar

Once Again Gratifying Earnings

The 1983 earnings were influenc•

ed by contradictory factors. They

In 1983, we were again able to

fully finance the large investments

were adversely affected by the market- area. Our commercial vehicle com•

with funds generated internally. Fixed induced, reduced capacity utilization

assets increased in approximately

in the commercial vehicle sector. In

the same proportion as stockholders' addition, we experienced keener com•

equity, so that a balanced and healthy petition in prices and sales terms in

panies in the U.S.A. and Argentina

appreciably improved their earnings.

In the non-operating area, Daimler-

Benz AG had net interest income

(excess of interest income over inter•

est expense) of DM 535 million (last

ratio continues between the two.

almost all markets. In the car sector,

the production start-up of the 190

required advance expenditures. Earn• year DM 610 million) - before taxes.

Additional Jobs at Home

At year-end, Daimler-Benz AG

had 150,601 employees (last year

Investments and Depreciation - Daimler-Benz-Group

148,411). In the past ten years we

have created some 28,000 new jobs

in Germany. We increased the open•

ings for trainees to over 8,800. About

2,800 youngsters took up vocational

training at Daimler-Benz AG in 1983,

that is more than in any previous

year.

Mercedes-Benz do Brasil was

again forced to adjust employment to

the sharply reduced sales opportu•

nities. Our North American companies

were able to add to their work force.

Worldwide employment at year-end

totalled 184,877 (last year 185,687).

We Thank Our Employees

We thank all our employees and

their representatives on the plant and

general labor councils, as well as

the management staff and their speak•

ers, for their receptiveness and dedi•

cated cooperation which joined us

again in 1983. In a cooperation based

on mutual understanding and trust

A much higher net interest income of Cars

DM 1.3 billion (last year DM .9 billion)

manufacturers achieved a proportion•

ately larger increase of 18.0 %, to

6.8 million units, enjoying the benefit

of the renewed trend towards larger

cars. The importers, who offer mainly

smaller cars, sold 7.3 % more. Of the

2.4 million imports, 1.9 million alone

is reflected in the Group financial

In many industrial countries the

statements. It is attributable to inflation• good car business was the locomo•

ary interest earnings of our Brazilian

subsidiary, which for the most part

only compensate for the erosion of

tive of recovery in 1983. World car

output rose for the first time in four

years, viz. by 11 %, to 30.2 million

purchasing power in monetary assets. units. This is still short of the previous were Japanese makes. Their imports

Worldwide net income rose 7.2 %, high of 31.7 million cars in 1978,

to the U.S. are limited by the self-

restraint agreement, which was

renewed in 1983, so that the Japanese

market share declined to 20.9 % (last

year 22.6 %). The car output of the

U.S. makers, which had declined

sharply in the preceding years, rose

to DM 988 million (last year DM 921

million), net income at Daimler-Benz

AG 3.3 %, to DM 710 million (last year

DM 687 million).

however.

World Car Demand Resurges

Growth was particularly vigorous

in the U.S. car market, where 9.2 mil•

lion units were sold in 1983, an

increase of 15.1 % over the low level

of the previous year. The domestic

Proposal for the Application

of Unappropriated Surplus

33.7 %, to 6.8 million.

In 1983, the Japanese car industry

The good results, all told, permit•

ted the increase of the Group's retain•

ed earnings by DM 633 million. From

the net income for the year, DM 355

million was transferred to retained

earnings of Daimler-Benz AG. We

consider the further strengthening of

the Company's equity base a neces•

sity especially in view of the large

tasks still awaiting us in the area of

products and programs.

raised domestic sales by 3 %, to

3.2 million units. Exports, on the other

hand, were confined to a 1 % increase.

Despite new successes in several

West European markets, including

the Federal Republic of Germany, the

volume of exports - 3.8 million units

Again in 1984, the readers of Auto Motor and

Sport selected a car of the Mercedes-Benz

class, the 500 SEL, as the best limousine of

the world.

At the end of 1983, and with the

approval of the Supervisory Board,

we increased the capital stock by

DM 170 million at the ratio of 1 for 9

par value. "Authorized share capital"

was reduced accordingly. The new

shares are already eligible for divi•

dends for the full year. We propose to

our shareholders to pay a dividend of,

once again, DM 10.50 for each com•

mon share of DM 50 par value, pay•

able on the increased capital stock

(last year DM 10.50 plus a bonus

dvidend of DM 1). The total dividend

payout thus increases from DM 350

million to DM 355 million.

Status Report

was below the level already attain•

ed in 1980. Import restrictions in

many markets precluded any large

increase. The Japanese car industry

boosted domestic car output by 4 %,

to 7.2 million units. In keeping with

their long-range worldwide market

strategy, they expanded production

abroad. 576,000 Japanese cars were

built outside Japan in 1983, 20 %

more than the year before.

In Western Europe, some 10.5

million cars were again sold. Howev•

er, trends in the individual countries

were quite dissimilar. Thus, the Unit•

ed Kingdom and the Federal Repub•

lic of Germany had sales gains of

15 % and 13 %, respectively, while

the markets of France and Italy de•

clined 2 % and 6 %, respectively. Net

West European exports to overseas

markets increased from .6 million

cars to .9 million cars. The European

manufacturers were able to boost

output 8 %, to 11.1 million cars. Their

share of world output remained almost

unchanged at 37 %.

Exclusive, beautiful and technically advanced,

Mercedes-Benz Coupe drivers know

what they have.

International Auto Show in Frankfurt

were a clear indication of the great

interest in the automobile.

German and foreign makes profit•

ed from the upturn in the domestic

Car Exports Matched

High Level of Previous Year

Marked Recovery

of German Car Market

Whereas car exports declined in

the first half of the year, they rose

The German car market made a

strong recovery. For the first time

since 1978, annual new-car registra•

tions again rose, that is to say by

market with about equal growth rates. again during the remainder of the

The market share of imported foreign year. The previous year's large export

cars remained practically unchanged volume of 2.19 million units could

at 24.4 % (last year 24.1 %). Whereas again be achieved. The export share

2.6 %, to 2.43 million units. This

the Japanese extended their market

of production declined from 58.3 %

share once more, to 10.6 % (last year to 56.4 %. The heavy demand for

sales growth was based not only on

replacement purchases which had

been put off during the long reces•

sion, but also on an improvement of

the general climate for private con•

sumption. Many new, attractive mod•

els provided an additional incentive

for buying. The record crowds at the

9.8 %), the French and Italian makes

lost market shares.

cars enabled the German manufactur•

ers to better utilize their capacities.

The brisk demand for used cars was Output went up 3.1 %, to 3.88 million

continuing in 1983. With more than

units, just shy of the record of 3.93

5.5 million title transfers, the previous million units set in 1979.

year's mark was bettered by almost

400,000.

Status Report

Daimler-Benz Continued

Steady Growth

During the year under review,

37,560 Mercedes-Benz cars were

newly registered in Germany. The

.5 % increase was less than the

industry's average. This is also reflect•

ed in a drop in market share, from

10.7 % to 10.0 %. Such a statement of

fact is nothing new to us; whereas

our market share regularly declined

during periods of expansion on

account of the greater quantitative

growth of the mass producers, during

periods of weak economic activities

we were always able to appreciably

increase our market share due to our

steady sales volume. Apart from that,

our business policy continues to be

directed towards continuous growth

and the highest possible stability in

capacity utilization and employment,

and not towards market shares.

Successfulfrom the beginning,

both at home and abroad: the new Mercedes

class190.

last year's high volume. These mod•

els have maintained their strong posi•

tion in the popular stationwagon mar•

ket. In the start-up year of the 190, a

Contrary to the industry as a whole, came to 18.7 %. More than half of our total of 109,837 of this new compact

we increased our car exports once

again, to 238,179 units (last year

customers in the U.S.A. and Japan

chose the S-Class, SEC coupes and

SL sports cars.

series was built. This production ca•

pacity could only be provided for at the

expense of our proven intermediate

class 200 D through 280 E. The

strong demand would have permitted

a higher output here, as it would have

with other models.

225,977). We obtained the largest

growth rate in the S-Class and hi-line.

In all we shipped 78,017 of these

models abroad, 13 % more than last

year. In important West European

countries like the United Kingdom,

France, Italy, Austria and the Nether•

lands, we were able to consolidate

our position, in some cases contrary

to the general market trend. We

increased our car exports to the

U.S.A. further, namely by 11.7 %, to

We raised our car output in 1983

by 3.9 %, to 476,183 units and thus

fully utilized our production capaci•

ties. The export share of production

remained practically unchanged at

50.0 % (last year 49.3 %), and is well

below the industry average of 56.4 %

(last year 58.3 %). More than half of

the additional output was accounted

983 Frankfurt Auto Show: Broader

Offering in the Compact Class

Within a short time, the 190 series

for by the S-Class and hi-line; 114,589 has gained a high degree of accept•

units (last year 105,093 units) are an

ance in domestic and foreign mar•

all-time high. The share of cars equip• kets and has already taken a leading

ped with the powerful 8-cylinder light- position in the category of high-

alloy engines has increased to about quality compact cars. For more than

3,692 units. We exported 5,124 cars

(up 10.7 %) to the Japanese market,

which is not easily accessible to

foreign makes. Within the slim seg•

ment of imported cars our share thus

50 %. With sales of 30,370 stationwag- half of the buyers in Germany, the

ons, we were able to surpass even

190 was their first Mercedes. In many

Status Report

foreign markets, this percentage is

appreciably higher still.

Commercial Vehicles

to 185,000. In Western Europe, with

volume of 1.3 million commercial

At the 1983 International Auto

In 1983, business in the particular• vehicles, production was on the scale

Show in Frankfurt, we introduced two ly labor-intensive category of trucks

more highly regarded versions of our over 6 tons GVW remained difficult

of 1982, while in the truck category

of over 6 tons GVW a drop of 40,000

to about 314,000 units, took place.

Compact Class, the 190 Diesel and

throughout the world. Large markets

the sports version 190 E 2.3-16. So in like the U.S.A, the United Kingdom

this series, too, we now have a family and the Federal Republic of Germany

German Commercial Vehicle

Business Only Good at Home

of cars that meet a wide range of

customer wishes.

were benefitted by the upturn in the

capital goods business, but this could

not offset the declines in other impor•

For the 190 D, a completely new,

The German commercial vehicle

market recovered in 1983 following

the sharp declines of the previous

two years. New registrations rose

particularly economical, low-pollution tant European industrial countries.

diesel engine was developed. An

encapsulated engine compartment

Most of all, demand for trucks from

the OPEC area, the dominant factor

reduces noise radiation by about half. in preceding years, contracted sharp• 16.7 % to 144,132 units. Registrations

Easy maintenance and repair charac• ly. The shrinking international com•

of trucks over 6 tons GVW increased

at a faster rate - 25.5 % - to 48,800

units, with heavy-duty trucks alone

(16 tons and up) accounting for 23,600

units (up 37,8 %).

The government investment sub•

sidy still contributed at the beginning of

the year to this welcome growth,

whereas from the middle of the year,

teristics of the new diesel engine

have further improved the already

extraordinary economy of the diesel.

The keen demand for the 190 D allows

expectations of an increase again

in the diesel's share of car output

after falling, for program reasons,

to 30.7 % in 1983 (last year 45.0 %).

With the 190 E 2.3-16, a sporty

mercial vehicle markets resulted in

stiffer competition for prices and sales

terms.

Truck Business Difficult

Throughout the World

In the truck category over 6 tons

GVW, world output in 1983 was 10 % the generally improved investment

dynamic car, catering to highest stand• below 1982. Despite this, total world

ards of performance, active safety

production of commercial vehicles

climate also was being felt.

The share of foreign truck makers

and comfort, is available in our Com• rose 7.0 %, to 9.8 million units, due to in the German commercial vehicle

pact Class as of mid-1984. Shortly

before its presentation at the Frank•

furt Auto Show, the new car already

proved its stamina and reliability by

an appreciable increase for small

vans derived from large-scale car

production. American manufacturers

market declined slightly, to 19.3 %

(last year 19.6 %). In the class up to

6 tons GVW, however, the Japanese

accounted for about three quarters of and Italian manufacturers posted con•

establishing three world long-distance the additional output of these vehic•

records and twelve international class les, which should rather be classified

siderable gains in market share.

The exports of the German com•

mercial vehicle industry, a mainstay

of production in the years 1980

through 1982, fell by 11.4 % in 1983, to

180,568 units. The trend varied strong•

ly by vehicle classes and export

markets. Exports of trucks over 6 tons

GVW fell sharply (down 27 %), espe•

cially as a consequence of the reduc•

ed demand for heavy-duty trucks in

the OPEC countries.

records on the circular track at Nar-

do, Southern Italy.

In January of 1984, independent

jurors from 20 countries acknowl•

as cars. Their commercial vehicle

output thus increased by .5 million,

to 2.4 million units.

In Japan, the commercial vehicle

edged the 190's outstanding qualities output of 4 million units was slightly

of engineering, workmanship and ride above that of the previous year,

though here, too, production could

only be increased in the light vehicle

classes; output of trucks over 6 tons

GVW declined by 17,700 units,

comfort. From 44 competitors, the

90 E was chosen "World Car of the

Year", the most significant interna•

tional honor awarded annually.

Status Report

In contrast, deliveries to the United Austria, Denmark and Belgium we

Kingdom and to Austria were in•

creased, but on the whole no com•

pensation was possible for the dras•

increased commercial vehicle busi•

ness commensurate with the general

pickup in economic activities. In the

tically reduced absorption capacity of United Kingdom, we even substantial•

the Near and Middle Eastern markets. ly improved our position. By contrast,

German commercial vehicle pro•

duction declined 2.8 %, to 292,910

units. This volume is about one fifth

below the previous high established

in 1980. The export share of produc•

tion decreased markedly, to 61.6 %

in France, Italy, the Netherlands and

Switzerland, we suffered a setback

due to the market situation there. As

the largest manufacturer of trucks

over 6 tons GVW, we attained in 1983

a market share in Western Europe of

26 % (last year 23 %).

(last year 67.6 %).

We cut back production 7.2 %, to

73,530 commercial vehicles, mainly

The MB-trac like the Unimog: powerful 4-wheel

drive vehicles for industrial, municipal and

agricultural applications.

Daimler-Benz Defends Market

Position in Commercial Vehicles

in the area of heavy-duty trucks.

Nevertheless, we succeeded on the

whole in maintaining employment in

the domestic plants again in 1983.

The balancing of employment be•

tween commercial vehicle plants

and at capacity-operating car plants

proved helpful once more.

Daimler-Benz shared in the grati•

fying upturn of the domestic market

and, all in all, defended its good

position. The increase of its new-

vehicle registrations by 14.1 %, to

less than last year. The decline

industry-wide was 16.9 %. We captur•

ed additional market shares in impor•

tant countries. The output in the do•

mestic factories totalled 7,963 busses

and bus chassis (last year 7,925).

The profit picture in the bus divi•

65,879 units, is just short of the

industry growth rate. Due to the

increasing pressure of imports from

Japan and Italy we had to take a

slight drop in our market share in the

truck classes up to 6 tons GVW.

Bus Business As Difficult As Before

The domestic bus business reviv• sion is still unsatisfactory. In such a

ed in 1983. Like the commercial

market, which is characterized by

overcapacities, and, with respect to

the transit bus business, additionally

by the strong position of public transit

authorities, it is almost impossible to

obtain break-even prices. We were

On the other hand, we made greater- vehicle industry as a whole, the spe•

than-average gains in the weight

classes above 6 tons GVW. With

sales of 13,470 heavy-duty trucks

cial investment subsidy had a per•

ceptible impact at the beginning of

the year. However, this only affected

deliveries to private bus operators.

(up 40.1 %), we succeeded in further

extending our lead in the domestic

market.

As for exports, even we could not

help but be affected by the drastic

slowdown in major markets. Deliver•

ies to foreign countries declined

The public bus companies continued able to avoid heavier losses through

to place orders hesitatingly because

of tight budgets. Daimler-Benz raised

domestic bus sales 6.8 %, to 2,478

units, chiefly in the class over 8 tons

GVW. Outside Germany, we too were

affected by the stiffened competition

in Europe, which was aggravated in

several markets by competition-

our continued efforts in cutting costs.

Satisfactory Unimog and

MB-trac Business

14.6 %, to 107,310 commercial vehi•

In 1983, Unimog and MB-trac

sales were satisfactory overall. In the

domestic market we boosted sales

cles. Whereas our sales to countries

overseas decreased substantially, in

Western Europe as a whole our sales distorting protectionist measures. With 18.1 %, to 6,225 vehicles, especially

again reached last year's volume. In

5,558 busses, we exported 5.9 %

due to strong demand for the MB-trac

Status Report

in the first half of the year. With export the cross-country vehicles, which are the 1982 production level. On the

shipments of 4,718 units (last year

,555), we were unable to repeat last

assembled on a job order basis at

other hand, our Argentinian produc•

Steyr-Daimler-Puch AG in Graz, Aus• tion company consolidated its local

year's extraordinarily good results,

which had been inclusive of several

fleet orders. Sales declined to the

level of 1981, and production was

curtailed correspondingly by 18.2 %,

to 10,800 Unimog and MB-trac.

tria, was cut 13.8 %, to 5,662 units, to

adjust to the demand trend.

market position and matched the

previous year's production, manufac•

turing 3,805 trucks and busses. The

development of Freightliner was

extremely gratifying. With overall

demand in the U.S. heavy-duty truck

market running only slightly higher,

this subsidiary boosted production by

55 %, to 11,969 units, raising its mar•

Commercial Vehicle Production

Drops Once More at Foreign Plants

Continued poor economic condi•

tions in South America and Spain

further impaired commercial vehicle

New Products in the

Commercial Vehicle Range

markets of these countries. The sales ket share in the U.S. to 13.4 % (last

To our wide range of commercial

vehicles we added an all-wheel-

drive heavy-duty tractor equipped

of our subsidiaries, who have their

own commercial vehicle manufactur•

ing facilities there, were also affected. situation pictured above, Group com•

year 10.1 %).

Because of the difficult worldwide

with a 368 kw (500 hp) engine capa• The output of our foreign plants had

ble of hauling loads of up to 220

to be cut once again, namely by

tons. With our new series 4 transmis• 16.4 %, to 47,201 units. Due to the

mercial vehicle output declined

to 226,393 units in 1983 (last year

250,079).

sions for medium- and heavy-trucks

with engine output of up to 206 kw

prevailing market conditions, produc•

tion at Mercedes-Benz do Brasil

declined by almost another third, to

22,255 commercial vehicles.

Mercedes-Benz Espana, too, with

9,172 vans, was about a quarter off

Industrial Engine and Vehicle

Component Business Down

(

280 hp), as well as for coaches with

engine output of up to 243 kw

330 hp), we have an optimum drive

(

Domestic stimulants to the indus•

trial engine and vehicle component

business were largely lacking in 1983.

We could only increase our sales to

farm machinery makers, mainly due

to a shift towards more powerful and

thus higher-priced engines. By con•

trast, sales to original-equipment mak•

ers, who are highly dependent on

exports, suffered from their reduced

export opportunities. The poor foreign

demand also affected us in the area

of special-purpose vehicles, construc•

tion machinery, and electric genera•

tor and pump sets. Total sales in this

category declined 6.7 %, to DM 291

million. Within our line of industrial

diesel engines, ranging in output

train for every application. In the

spring of 1984, we launched our new

light "Woerth" trucks with the engines

of the 360 series and gross vehicle

weights of 6.5 tons to 11 tons. They

Mercedes-Benz diesel engines are used in

replace our successful series of light• specialty vehicles (here: corn-harvester), boats

and electrical generator installations.

weight "Woerth" trucks (LP models).

For public transit applications the

O 405/405 G were introduced at the

Frankfurt Auto Show as successors

to the O 305/305 G busses.

Fewer Cross-Country Vehicles Sold

In the year under review, 2,309

cross-country vehicles were sold in

the domestic market, 1.5 % less than

the year before. There was a much

stronger decline of exports, viz by

from 44 to 452 kw (60 to 615 hp), the

percentage of engine sales with over

200 kw (272 hp) continued to rise.

16.9 %, to 3,225 units. Production of

Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen.

Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures.

It was omitted in the pdffile to improve the usability of the file size.

Outlook

Improved Prospects for Worldwide

Economic Upswing

mask them temporarily - and make

enduring rehabilitation difficult.

Redistribution of work and work•

ing hours, on grounds of labor mar•

ket policy, is only acceptable if their

costs are controllable, and if the

utilization rate of our manufacturing

capacities - low as it is by internation•

al standards - is not further reduced.

These requirements could best be

met by flexible arrangements which

In the first months of 1984, the

economic situation in important indus•

trial countries improved further.

The conditions are thus good for a

continuation of the recovery process

of the world economy.

German Economy Dependent on

International Competitiveness

Confidence is growing in Ger•

many that economic recovery will

accelerate. The successful efforts to

The overall favorable prospects

for vigorous, steady growth must be

curb public spending and reduce the are tailored to the needs of the individ•

large budget deficits have contribut•

ual enterprise and its employees, and

to local labor market conditions.

considered in relation to a number of ed substantially to bolster the confi•

risks. The large budget deficits in the

U.S. at first stimulated the economy,

but there is reason to fear that the

continued high real interest rates

dence of consumers and investors.

A country that is so deeply involved in

This is now also evident in the increas• world trade, as is the Federal Repub•

ed expenditure on machinery and

lic of Germany, would be taking a

equipment. Foreign orders have pick• high employment risk if it were to

could endanger growth and that neg• ed up again, mainly from regions in

ative repercussions on the internation• which the price competitiveness of

al monetary system could be inevita• the German exporters has been aid•

ble. In many newly-industrializing and ed by the favorable trend of the

developing countries the debt burden D-mark against the U.S. dollar and

follow proposals which do not meet

these criteria.

Car Industry Steps Up

International Activities

still goes beyond their economic ca•

pacities and it forces them to put a

the Japanese yen. What with the

discernible bias for increasing the

Market conditions for the car indus•

try the world over have also improved

with the general recovery. In the short

run, the demand will even apprecia•

bly exceed the long-term growth trend.

Pent-up replacement demand, from

the recession behind us, will provide

additional impetus. Nevertheless,

tight rein on imports. The political and value of the D-mark, the competitive

military conflicts in the Persian Gulf

are further sources of danger to the

world economy. Indications are

conditions for German products in

world markets will again become

harsher. On the other hand,

mounting that the progress achieved a strong D-mark helps defend our

thus far in the economic integration

of Europe are being jeopardized for

reasons of national self-interest and

an incapacity to take political action.

In several industrial countries which,

because of structural problems and

adjustment difficulties, are not or are

only partially partaking in the up•

swing of the world economy, the calls

for protectionist safeguards of home

markets and for interventionist meas•

ures are getting louder, because it is

hoped they will afford quick, politically

demonstrable successes. However,

such measures will not prevent unde•

sirable structural changes, but only

hard-won successes on the stability

front.

Maintaining the international com• before too long the expansion of

petitiveness of German industry is

dependent on, above all, the stability

production capacity, planned or

already carried out by several manu•

of domestic prices and costs. A strong facturers, will further heat up competi•

increase in the cost of labor through

tion. With manifold restrictions on free

a reduction in working hours would in access to the market - import quotas,

effect considerably impair the com•

petitiveness of German enterprises.

The longer-term result would not be

more jobs but the endangerment of

existing ones. The question of work•

ing hours as a dispositive factor

different safety standards and licens•

ing rules, discriminatory taxes - indivi•

dual countries seek to protect their

national industries against strong com•

petition from imports and loss of

employment.

should not, however, be excluded for

the solution of labor market problems. ments between large multinational

International cooperation agree•

Outlook

car manufacturers are intended to

utilize cost advantages based on

location and technology and simulta•

neously safeguard market positions

German Car Industry: Discussion

To convert their entire product

About Tougher Emission Standards range to catalyst-equipped cars, Ger•

man manufacturers will need far more

time than permitted by a 1986

In the past years, the German

and jobs in the home market. U.S. car automobile industry has acquired a

deadline. The indispensable prerequ•

companies look to cooperate with

Japanese mass producers as a way

strong competitive position in interna• isite for general use of the catalyst

tional comparisons through fundamen• technology and retention of high fuel

to quickly obtain the know-how which tal improvements to their products.

economy is the general availability of

they lack in smaller, more compact

cars (after partly unsuccessful efforts

of their own). The Japanese compa•

nies want to actively counter the limita• With regard to environmentally com•

tion of imports in North America with

such agreements.

In the United Kingdom, the Japa•

nese auto industry is endeavoring to

establish production and assembly

plants for cars, thereby putting itself

in a position to deliver to European

markets where it had only limited

access up to now. Particularly the

German car manufacturers will face

Great advances in safety, economy

and workmanship are incorporated in out Europe. Yet a number of neigh•

a host of new and attractive models.

unleaded premium gasoline through•

boring European countries oppose

such fuel, in part because of the

economic burdens connected there•

with.

The drastic reduction of emission

limits must be carried out uniformly

across Europe. Otherwise, govern•

ment interference in the border-

crossing car business would have to

be feared. This would seriously jeop•

ardize employment in the German car

patible cars, German manufacturers

are well out in front of legislative

action.

We respect the intention of the

Federal Government to adopt the

presently valid U.S. emission stand•

ards, the measuring procedures and

the driving tests. The companies will

cooperate to put them into practice

as current technology permits. These industry, which is so dependent on

an even sharper struggle for markets lower emission limits for cars with gas• exports.

and market shares. In the past years, oline engines can only be met with

The automobile industry empha•

sizes, however, that there are ways to

they benefitted from the uniform

external tariff of the European Com•

munity and from additional quantita•

tive restrictions in Italy, France and

the United Kingdom, the latter having

been directed mainly at Japanese

imports.

catalytic exhaust cleaning systems

In the long run, this new challenge

too can only be met successfully with

a superior range of products in terms

of engineering and quality. There is a

growing market potential worldwide

for cars of high standards and value.

Space, versatility and quality:

Threemajorreasonswhichspeakforthe

Mercedes-Benz T-model.

Outlook

reduce pollutant emissions of cars

that are more cost-efficient and get

much faster results. They include

regular inspection of the vehicles

already in operation, but also the

wider use of diesel engines.

Speed Limit, Inappropriate Means of

Reducing Pollutant Emissions

In connection with this discussion,

the call for a general speed limit on

expressways has grown loud again.

Advocates cite a rise in nitrogen

oxide emissions (NOx) with increas•

ing speed. The potential for emission

reductions through speed limits is

often greatly overestimated. Accord•

ing to available studies, the reduc•

tion of NOx, which a speed limit could

provide, would be at the expense of

heavier emissions of hydrocarbons

and carbon monoxide, which togeth•

er may even outweigh NOx. Up to

now it has not been possible to

assess the effect on the environment

of either of these emissions with

sufficient certainty.

Moreover, statistical surveys show

that the average speed levels on

expressways, which do not have

speed limits, are only slightly higher

than on roads where speed limits of

Mercedes-Benz truck:

Specifically tailored for every transport

application - its serviceability matches its

engineering.

ment must not be dealt with in such a Daimler-Benz: Substantial Growth

way that other important goals of

development, especially traffic safety,

are neglected.

in the Car Sector in 1984

100 km/h are in effect. If a general

The good order situation for

speed limit on expressways were

These discussions cause buyers

Mercedes-Benz cars - both domestic

introduced, part of the mileage driven to hesitate, as can already be seen in and foreign - ensures full employ•

on expressways would probably be

shifted to the already overcrowded

secondary highway system. From a

safety viewpoint, this would be a

definite disadvantage, as express•

ways - in relation to traffic volume -

are far safer than other highways.

The topic of the car and the environ-

the marketplace. Clear and practica•

ble guidelines are called for from the

ment of our expanded capacities also

in 1984. With the startup of production

political decision makers. Irrespective of the 190 at the Bremen plant, output

of new, more stringent emissions

standards, we have made sure that

our current cars will be able to oper•

ate without restrictions well beyond

the year 2000.

and sales will increase to substantial•

ly more than 500,000 units. The con•

tinuing trend of demand towards

high-quality, economical cars favors

our line of high-tech, top-quality cars.

Outlook

We can meet the customers' increas• optimum combination of fuel eco•

though the effects of exhaust contam•

ing safety-consciousness with a com• nomy and emission control, as well as inants on the environment have not

prehensive model offering. The elec•

noise levels which have never been

tronically controlled anti-lock braking so low in a diesel car, has already

system ABS is an important contribu• convinced many buyers.

been adequately researched by any

means. We, ourselves, are deeply

involved in programs to discover the

causes of the damage to the forests,

for which there are many hypotheses

but still no satisfactory explanations.

We shall be striving for further

tion to active vehicle safety. We have

effectively improved passive safety

with the development of the airbag

and seatbelt tensioner. We are the

only manufacturer in the world to

offer these restraint systems, which

In the emissions issue, in the

interest of our customers, we have

decided on a straightforward course:

since January of 1984 we are offering

only cars that comply with standard

qualitative growth in the future as

ECE 15/04. Regardless of when a law well. As in the past, our new develop•

ments are directed towards genuine

assure passengers the greatest possi• becomes effective, we are able

ble safety, in all models.

already today to deliver in the Federal technical progress that provides the

Republic of Germany models 380 SE customer a clearly recognizable addi•

The addition of the 190 D to our

diesel range ushers in a new era of

diesel car driving with a multitude of

and 230 E with catalytic exhaust

cleaning equipment. Model 190 E can policies our special attention is direct•

ed towards energy savings and pollu•

from mid-1984. However, as yet there tion control, in addition to safety.

tional benefit. In product and model

innovations. Its overall design, with an also be offered with such a system

are hardly any gas stations offering

lead-free fuel for these cars.

We have taken these steps with•

out being legally compelled to, even

Moreover, we shall continue to focus

on the qualities to which the Mercedes

owes its reputation: balanced design,

quality and mature engineering, ride

Asuitabletruckforeveryapplication:

Mercedes-Benzoffersmorethan200basic

truck models, with more than 2,800 model

variations.

Outlook

comfort, value retention and long life.

It remains our goal to offer products

of high utility value which thoroughly

embody sound technical advances.

Keener Competition in the

Commercial Vehicle Markets

The situation in the international

commercial vehicle markets contin•

ues to be characterized by a sharp

struggle for market shares. The avail•

ability of large production capacities

on the supply side are contrasted

against reduced worldwide demand.

Moreover, the commercial vehicle

customer has become more discrimi•

nating in ordering and has come to

view cost-benefit relationships even

more critically. On the manufacturers'

side, the location-determined cost

picture is made additionally worse by

a great many differing national safety Mercedes-Benztruckscanbedeliveredwith

standards and licensing laws.

capital goods business improves.

all special bodies in use today.

However, foreign manufacturers, who

have a price advantage especially in

the area of unsophisticated light•

weight vehicles, can be expected to

Long-term, however, we are

expecting the market potential to

grow again. The modern economic

structures of the industrial countries

will be increasingly dependent on the

commercial vehicle as a means of

transportation according to all exter•

nal forecasts. In developing countries

and newly-industrializing nations fur•

ther economic and social progress

would be inconceivable without the

truck. It is the financial resources

that are mainly lacking at this time.

When the underlying economic con•

ditions improve, the world's large need

for commercial vehicles will be trans•

lated into commensurate demand.

Domestic sales by the German

Incooperationwithwell-knownbody-builders, make further inroads; this applies

Mercedes-Benzoffersfiretrucksandvehicles

most of all to the Japanese

competitors.

foradiversityof municipalapplications.

On the export side, a certain

increase in demand is only evident

for light commercial vehicles. Ship•

ments of trucks in the GVW class of

6 tons and up, on the other hand, will

remain at a low level in 1984.

The West European markets have in•

creasingly become the focal point of

competition between the manufactu•

rers since overseas truck demand,

especially from the OPEC region, has

receded. Here, the prospects for a

gradual revival of exports are over•

shadowed by numerous risks.

commercial vehicle industry in 1984

will probably increase a little as the

Outlook

At the beginning of 1984 we sold

our subsidiary Euclid, Inc., Cleveland,

U.S.A., to the U.S. construction ma•

chinery maker Clark Equipment Com•

pany, thus taking account of the

radical structural changes which have

since 1980 taken place in the market

for construction machinery and in

international competition.

Continuation of the Medium-Term

Investment Program

Capital spending in 1984 will

amount to about DM 3 billion.

The car division continues to receive

the bulk. In our medium-term planning,

we have assumed that capital spend•

For world-wide application, Mercedes-Benz

developed the 2636 S/6 x 4. Long-haul tractor

equipped with a naturally aspirated 261 kw

our subsidiary Freightliner plans to

further extend the position it achieved ing will fall gradually beginning in

in 1983 as overall demand for heavy- 1985 when the reorganization of our

(355 hp) engine.

duty trucks picks up more steam.

With our wide and strongly com•

petitive commercial vehicle line we

offer a made-to-measure solution to

every transportation problem. Our

offer ranges from the 2-ton van to the

heavy-duty tractor capable of hauling

up to 200 tons gross vehicle weight.

Within this range there are scores of

plants is completed. In both the car

and the commercial vehicle division,

our investment activities will serve to

strengthen our competitiveness and

improve and supplement our vehicle

Daimler-Benz: Commercial Vehicle

Business Remains Difficult in 1984

The persistent weakness of the

overseas commercial vehicle mar•

kets plus the uncertain prospects in

Western Europe will also impair the

No two transport jobs are the same. This is the

reason why Mercedes-Benz offers vans with

many configurations in bodies, wheel base and

door combinations.

sales of Mercedes-Benz commercial possibilities for combinations with

vehicles. Even if domestic business

remains good, we do not expect to

make up completely for the decline

of exports to OPEC countries. Con•

sequently, we slightly curtailed our

production schedule once again,

especially in the area of "Woerth"

heavy-duty trucks.

At our South American subsidiar•

ies Mercedes-Benz Argentina and

Mercedes-Benz do Brasil we expect

production to increase, albeit from

basic models and special versions.

Manufacture by the modular system

permits customer-oriented low-cost

volume production without sacrificing

efficiency and performance. On this

basis, we will continue systematically

to develop our commercial vehicle

program. A convincing example of

this is the vehicles of our new light

"Woerth" truck class, whose presenta•

tion and introduction to the market in

the spring of 1984 drew a tremendous

levels which had fallen sharply in the response from the press and

years before. On the U.S. truck market, customers alike.

programs. We will steadily increase

the productivity and flexibility in

manufacture through new technologies

and up-to-date plant engineering.

Daimler-Benz:

First Quarter Trend 1984

abroad. Production at our plants in

South and North America and Spain

rose to 15,000 commercial vehicles

In the first three months of 1984,

Daimler-Benz increased car output

by 9.5 %, to 132,000 units. In the

commercial vehicle division, 41,000

vehicles (last year 42,700) were pro•

(last year 10,300). Group sales for the

first quarter of 1984 rose 5 %, to

DM 10 billion. Sales of Daimler-Benz

Continuous, Stable Development

AG itself rose 3 %, to DM 8.2 billion.

Daimler-Benz will stand by its

proven policy of continuity and stabil• duced in the German plants along

•

The following sections of this report

cover details of the various company

divisions and activities:

ity. On the basis of comprehensive

research and development work we

will incorporate technical progress in

our products in an economically

sensible manner in the future as well.

We will also continue to seek the

confidence of our customers with a

total package - consisting of product

and a wide variety of services - of

high value and quality. Far from mere•

ly conserving past successes by

this, we want to open up new fields of

activity. This strategy is particularly

evident on the car side through the

addition of the Compact Class to our

lineup, and on the commercial vehi•

cle side, by the new light "Woerth"

trucks.

with 7,000 (last year 6,000) Mercedes

commercial vehicle kits for assembly

Also in the future, we trust in the

skills and dedication of our employees

and in the experience acquired over

many decades. A sound financial

foundation gives us the necessary

support in our continuous striving for

the best solution to justify the good

reputation of our vehicles again and

again.

Mercedes-Benz busses are offered for excur•

sions, travel tours, long distance trips and for city

transit operations, seating 8 to 189 passengers.

Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen.

Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures.

It was omitted in the pdffile to improve the usability of the file size.

Research and Development

Following the two oil price crises

of the seventies, a primary goal of

Research and Development was to

reduce the fuel consumption of

In the engineering departments

federal government, which had been

prompted by the discussions about

forest damage. They will again change

basic conditions starting in 1986.

we have increased our staff working

with computer-aided design (CAD),

which relieves the engineer from

automobiles. Then, at the beginning costly, time-consuming drawing work Yet such isolated national regulations

of the eighties, environmental pro•

and allowing more time for new ideas will do little to reduce pollution, as

tection, especially through reduced and creative mental pursuits.

exhaust emissions, received politi•

The results with respect to function

about half of the total pollutants in the

Federal Republic of Germany comes

cal priority. Daimler-Benz had taken and costs are optimized components from across the borders. Effective

both aspects into account very ear• and integrated systems. The con•

ly with a broadly based Research

tinuous flow of data from design to

improvements can, therefore, only be

expected from uniform, European-

and Development program, without manufacture is thus facilitated, improv• wide regulations.

neglecting the "classic" Mercedes

characteristics such as safety,

ing quality and at the same time,

raising productivity. We must, how•

superior riding comfort, quality and ever, caution against undue hopes

long life. Already since the beginning for substantially shorter periods of

of 1984 are all our cars meeting the development.

ECE 15/04 (U.N. Economic Commis•

German Auto Industry - Progress

in Environmental Protection

The German motor vehicle indus•

try already in 1981 promised the

sion for Europe) emission stand•

Isolated National Actions Impede

ards which will not become effective

Federal Minister of the Interior that it

would, ahead of schedule and volun•

tarily, reduce the exhaust emissions

of gasoline-powered cars to the limits

set by ECE regulation 15/04. At the

Harmonization of

Motor Vehicle Standards

and Certification Regulations

until October, 1986. We are working

hard to develop for the European

markets cars equipped with cata•

lytic converters, and engines that

We consider harmonization of the

run on unleaded premium gasoline. motor vehicle standards and certifica• same time, the industry is neverthe•

tion requirements, which differ from

country to country, an urgent neces•

sity. Again in 1983, no progress was

made in this area, to the detriment of

less committed to keep its promise to

cut fuel consumption 15 % by 1985

versus 1978 levels. Any appreciable

reduction of pollutants below these

standards - such as is now planned

by the federal government beginning

already in 1986 with the adoption of

DM 1.5 Billion for Research

and Development

For the continuing development of everybody. In fact, new national

our vehicle programs and for their

adaption to the constantly changing

actions have put this important goal

still farther out of reach. Because of

stipulations, we further increased our the different international requirements, the current U.S. emission standards

Research and Development expendi• development capacities are being

tures in 1983, to about DM 1.5 billion. tied up to an increasing extent.

and test procedures - can only be

achieved for gasoline-engined vehi•

cles if they are equipped with catalytic

Moreover, we invested DM 137 mil•

lion in the expansion of our research

and testing equipment and the buil•

dings required for them. More than

The consequences are unnecessary

cost increases, reductions in the num• converters, given present technology.

ber of models that can be offered, However, catalysts require unleaded

and protectionist barriers, all of which gasoline and they increase fuel con•

0,000 employees in the engineering work to the consumers' detriment.

sumption. Diesel-powered vehicles

already have emission levels which

are below the limits proposed by the

German Office of Environmental

Protection.

and testing departments are engaged

in the improvement and the renewal

of our product range and thereby the

future of-our Company.

The Swiss emission and noise

standards, which went into effect in

1982, were followed in 1983 by the

legislative initiatives of the German

ResearchandDevelopment

The German car makers have

New Emission Test Center

Begins Work

meters. The electronically calculated

values are evaluated on video termi•

nals. As many as seven exhaust com•

made it clear that it is impossible for

them to convert their entire range of

gasoline vehicles to comply with the

more stringent standards within only

two years. It requires a longer period

of transition for technical, economic

and legal reasons (EEC directives).

In 1983, we opened our new emis• ponents can be made visible instantly.

sion test center in Untertuerkheim.

Following computer evaluation, the

A total of DM 80 million was spent on data can be automatically recorded.

buildings and equipment. This center

can conduct simultaneous tests on

In addition to these emission

measurements taken in the course of

During this period it should be permis• eleven computer-controlled dynamo- our development activities, we con•

sible to produce vehicles that meet

the tougher standards along with

those that do not yet comply. Incen•

tives, for example, in the form of finan•

stantly monitor current production

cars for compliance. Moreover, cars

shipped abroad, are again inspected

under the supervision of the local

ln the Untertuerkheim emission test center,

modernmeasuringtechniquesareappliedto

cial relief - also for the environmental• test thecomplexrelationshipbetweenvehicle certification authorities in the U.S.A.

operationandpollutantemission.

ly more compatible diesel vehicles -

would be a market-oriented method

to encourage buyers to purchase

catalyst-equipped vehicles whose pur•

chase price and operating expenses

are higher. In any case, it must be

ensured that unleaded premium fuel

will be available throughout Europe

beginning in 1986. Only then shall we

be able to continue to use the

(Ann Arbor, Los Angeles, Denver)

and in Melbourne, Australia. Our

annual development expenditures for

pollution prevention in engines

amount to some DM 300 million, or

about 20 % of our entire engineering

budget.

Further Progress in Noise Reduction

extremely energy-efficient high-com•

pression principle in our engines, an

area in which the German auto indus•

try has world leadership.

Under a joint research project with

the German Office of Environmental

Protection concerning the technical

feasibility for the reduction of external

noise emitted by vehicles, we have

during the past few years demonstra•

ted commercial vehicles and cars

which were equipped with noise

insulation features that can be used

in large-scale production. Inevitably,

these features adversely affect opera•

tion, weight and price of the vehicles.

Therefore, we tested the acceptance

of such vehicles with selected custom•

ers in every-day operation. Up to

now, noise insulation has been

achieved to a large extent only in city

busses.

Daimler-Benz Steps Up Environ•

mental Protection Activities

Together with the University of

Stuttgart, the Environmental Protec•

tion Institute of Baden-Wuerttemberg

and the Forestry Development and

Research Center of Baden-Wuerttem•

berg in Freiburg, Daimler-Benz has

initiated a joint project to study the

causes of forest destruction. Only

their precise knowledge will enable

to take appropriate steps that will

produce measurable success in

reducing environmental pollution.

A major advance has been accom•

plished by us with the engine com-

Research and Development

Car Program: Additional models in

the Compact Class

At the 1983 Frankfurt Auto Show

we introduced an exceptionally

sporty version of our 190 series, the

16-valve 190 E 2.3-16. Its high-

performance power plant was devel•

oped from our range of 4-cylinder

gasoline engines. The output boost

was achieved essentially by the

newly developed light-alloy cylinder

head with two overhead camshafts

and 16 valves. The suspension is of the

same design as the other 190's.

Wheel-aligning elements, springs,

shock absorbers, wheels and tires

have been adapted for the apprecia•

bly higher performance. A self-

Unparalled in the world to date, the unique

procedure for isolating and measuring external

noises. The Daimler-Benz test facility - jointly

developed with the Technical University of

levelling rear suspension maintains

the car in a level position to the

roadway irrespective of payload. Prior

to the introduction of the 190, we

conducted extensive endurance tests:

suspension and drivetrain compo•

Testing calls for maneuvers which, for

safety reasons, cannot be conducted

on public roads. Consistently repro•

Aachen - permits the objective comparison of ducible test results are imparative

noise levels and thus the purposeful reduction

to prove compliance with environ•

mental standards and certification

of noise sources.

requirements which vary from country nents had to prove their reliability under

to country. If we do not solve this task extreme conditions. During the test

we run the risk of losing important

foreign markets.

series, our test drivers set three new

long distance-world records in all,

over 25,000 km, 25,000 miles and

partment encapsulation of the 190

diesel, whose noise characteristics

appreciably distinguish it from other

diesel cars presently offered.

Although we have purchased

enough land in the economically

underdeveloped Boxberg region of

Main/Tauber county, we have not as

yet been able to begin construction.

The massive resistance put up by

50,000 km.

As a further complement to our

Compact Class we introduced the

190 D. The diesel engine, of all-new

design, meets the high standards by

Construction of

Boxberg Test Track Delayed

opponents of this project has made it which a modern automobile is judged

The success of our products in

the marketplace and thus the jobs of

our employees can only be safe•

guarded in the long run if suitable test trative courts, a decision for which is

tracks are available to us. We need

them to test our vehicles and their

components but also to demonstrate we will begin with the construction of

compliance with legal requirements.

the facility.

impossible thus far to draw up a

timetable for its realization. Currently,

two suits are pending before adminis•

in regard to economy, performance,

weight and operation, but also in

regard to exhaust emissions and

distinctly reduced noise levels. The

not yet in sight. As soon as the

varying legal requirements are fulfilled,

190 D is the first car whose power

plant is enclosed by body-mounted

panels. Noise levels outside the car,

both at idling and while moving, are

Research and Development

appreciably less than the levels here•

tofore attainable in diesel cars.

New Generation of Medium-Duty

Trucks

In the spring of 1984, we present•

ed to the press our new commercial

vehicles of the light "Woerth" truck

class with GVW between 6.5 tons

and 11 tons with very positive results,

and introduced them in the market.

These vehicles replace the extraordi•

narily successful LP series, which

accounted for as much as a quarter

of the "Woerth" truck output. In the

versatility of its applications, the new

series satisfies the most sophisticated

demand. With the new vehicles in this

weight segment, Daimler-Benz intro•

duces advanced technology. The pow•

er steering, which is standard, an air

brake system available as an option

starting at 6.5 tons GVW with optional

anti-lock braking system (ABS), and

the substantial reduction in fuel con•

sumption and maintenance and repair

costs, illustrate the progress.

Electronic Information Systems

for the Driver

Optimum information for the driver

is provided through electronic sys•

tems which were introduced at the

Frankfurt Auto Show: trip information

computer, route planning and naviga•

tion computer, and economy meter.

The trip information computer is an

option which has been available on

our S-Class since the spring of 1984;

the route and navigation computer

will follow. The combination of both

systems will help the driver to orient

himself on main highways, react

quickly to reports of traffic conjestions,

and reach destinations in unknown

cities by the most direct route. The

economy meter recommends the

gear that should be engaged for

optimum fuel economy and perfor•

mance and thus contributes towards

economical driving.

The objective here is the optimization of com•

ponents with respect to weight and strength.

With the aid of computer graphics and our own

programming systems, variants can be develop•

ed and selected much faster.

Also completely new developments

are the engine series 360 with

naturally aspirated and turbocharged

versions which cover the range of

Expanded Commercial Vehicle Range

66 kw to 148 kw (85 hp to 200 hp).

As the world's largest manufacturer

of trucks we have a product line that

offers specifically-tailored vehicles

for every application in all weight

classes.

With the heavy-duty tractor 3850 A

and AS/6x6 we have extended our

truck range by an especially powerful

unit developing 368 kw/500 hp and

a torque of 2,000 Newton meters for

gross combined vehicle weights even

in excess of 200 tons. The turbo-

With the likewise newly-developed

Plastic models and three-dimensional stress

optics help in the development of weight-saving transmissions and improved axle

designs. Here we show the precombustion-

designs, these vehicles set new stand•

chamber opening of a cylinder head model in

ards of performance and fuel eco•

nomy for every type of application.

With the cabs of the "New Genera•

tion" we were able to obtain, with the

aid of wind deflectors, energy savings

of up to 15 % in long-distance opera•

tion. To reduce fuel consumption and

exhaust emissions but also to improve

operational reliability, we plan to

introduce an electronic diesel fuel

injection governor in the near future.

polarized light which shows the stress area and

extreme stress points.

V-engines, which enable us to pro•

charged 10-cylinder engine is derived vide the proper engine output for

from our series of large-displacement every desired use.

Research and Development

In 1983, we added the U 1250 to

our Unimog line. The driver's cab of

the medium MB-trac was completely

redesigned.

Development Work at Foreign

Subsidiaries

off-road operations. The basis for

production there are the vehicles and

components obtained from the

At Mercedes-Benz do Brasil, the

development of the O 370 was con•

cluded. The bus is the first of a series

of vehicles developed specifically for

Brazilian operating conditions, and is

not based on previous Mercedes-

Benz products.

domestic plants of Daimler-Benz AG.

New Urban Busses for Public Transit

Research Group Berlin

During the reporting year, the

Berlin Research Group conducted

the Daimler-Benz Berlin Seminar deal•

ing with the topic "Short-Haul-Traffic-

Problems, Trends, Key to Solutions".

For public transit, we developed

and introduced at the Frankfurt Auto

Show the 0 405/O 405 G (articulat•

ed) busses as successors to the

standard busses 0 305/O 305 G.

The response to the new standardiz•

ed second-generation transit busses

has been exceptionally good.

The truck program of our U.S.

subsidiary Freightliner is being revis•

ed in several phases. The experience The speakers at the seminar empha•

gained, particularly in European mar• sized in particular the growing signi•

ficance of information systems with

their manifold consequences for trans•

portation. In addition, it became

kets, will be incorporated. As a first

The busses meet all the specifications step, we introduced in February a

of the Association of Public Transporta• restyled cab with upgraded interior

tion Companies and, following thorough appointments.

apparent that for local hauling, more

testing, will go into production

in the autumn of 1984. In Essen,

For the commercial vehicle manu• attention than in the past should be

given to solutions taking into account

the psychological aspects of all invol•

ved, and not least those of the driver.

facturer Arbon & Wetzikon (NAW),

Switzerland, a four-axle truck was

developed, which is also suitable for

the project involving track-guided bus•

ses, an element of our O-Bahn transit

system, is being continued, using the

duo-bus (can be driven either with

diesel engine or electric motor, with

electric power supplied by overhead

wires). A further section of the plan•

ned route has been put into opera•

tion in the meantime. 21 track-guided

The building, which houses the

Berlin research group and the driving

Mercedes-Benz-O-Bahn in Essen. Track-guided simulator, has been occupied. The

busses (O 305 G) powered with either

diesel engines or electric motors use both

the tracks and the tunnels of the existing street•

car system.

simulator has passed its first function•

al test. Presently, the electronic visual

system is being installed.

305 G (articulated busses) are now

operating on the existing streetcar

tracks which have been adapted to

the busses' requirements. Since 1980,

these busses have covered more

than 4.5 million kilometers without

breakdown.

In Adelaide, Australia, a 2.4 km

section of the track-guided O-Bahn

system has been completed which,

for the time being, is used to train

drivers. The project is going ahead as

scheduled. Delivery of the contractual•

ly committed 90 chassis model

O 305/O 305 G had started in 1983.

Purchasing

Again in 1983, Daimler-Benz' pur• Consolidated Purchasing Volume: More than DM 23 Billion in the year 1983

chasing volume has given strong

impetus to the business of the

Manufactured parts

mostly small and medium-sized

suppliers. The value of worldwide

purchases of manufactured parts,

raw materials and supplies, capital

goods and services again topped

DM 23 billion. The orders of

Daimler-Benz AG alone, totalling

DM 18.7 billion (last year DM 18.5

billion), secured more than 150,000

jobs at suppliers, not counting the

many employees of their sub-

suppliers. In consideration of the

economic and social responsibili•

ties which large companies in partic•

ular must face when placing orders,

we gave special consideration to

small and medium enterprises,

social institutions (for instance,

workshops for the handicapped)

and firms in underdeveloped

regions. In keeping with our tradi•

tional commitment to the Berlin

economy, we substantially increas•

ed again the volume of orders going

to Berlin companies.

Research into procurement mar•

kets has been intensified drawing on

the services of foreign offices respon•

sible for materials procurement.

The cultivation of relationships with our

suppliers and the establishment of

new business,connections were the

main purpose of several events organ•

ized by the purchasing department.

In keeping with the principles of our

purchasing policy, in all our activities

we stress the development of coop•

ond half of 1983 will also affect costs

for the current year. A stabilizing

effect on prices was achieved by the

measures adopted by our suppliers

to increase productivity, and by value

analytical improvements which were

obtained in cooperation with various

departments of our Company.

Future-Oriented Activities in All

Areas of Purchasing

To cope with the constantly grow• eration with competitive German and

Prices of Materials Rose More

Slowly Than in 1982

ing requirements of the market, and

with a view to the exacting tasks to

come, all departments involved with

materials - purchasing, scheduling,

inventory management - have sys•

tematically gone ahead with their

foreign firms, based on continuity and

longevity.

Through the great efforts of the

materials scheduling and inventory

management departments we re•

duced average inventories of raw

The prices of materials rose at

about the same rate as prices in

general in 1983, albeit from a sharply

higher 1982 base following the price

surge in the steel sector. The im•

proved cost situation overall for labor

and energy, and for most primary

materials, contrasted with above-

activities and, to some extent, initiated materials and supplies once again.

new activities. With the objective to

Speedier information processing and

recognize even earlier the risks and

communication as well as the sys•

to make even better use of opportuni• tematically improved flow of materials

average price increases for chemical ties on the national and international

helped to achieve this. In 1983, for

example, we began exchanging infor•

mation with suppliers by means of

products and plastics. The extraor•

dinarily sharp increase of world mar•

ket prices for aluminum in the sec-

procurement markets, we have ini•

tiated a comprehensive program to

streamline our purchasing organization. long-distance data transmission.

Purchasing

Through greater flexibility in the sup•

Many procurement markets of our and abroad, allowed the smooth sup•

ply sector, we shall, together with our foreign subsidiaries experienced high ply of the production line in all plants.

suppliers, continue our efforts to com• inflation rates and import restrictions

Production start-ups and production

mit less capital overall, and thus

improve cost and competitiveness.

In the process of setting up new

production facilities and relocating

due to government indebtedness.

scheduling adjustments in response

This created problems for purchasing to market requirements once again

and scheduling, which could general• placed high demands on the flexibil•

ly be solved, however. Of help here

ity of our suppliers. The scheduled

others, we have reorganized the stor• was the introduction of modern infor• implementation of our extensive capi•

age organization and techniques in

several plants, taking into account

both the product and delivery specific

requirements and the latest know•

ledge related to safety and job allevia•

tion. Standardization of storage facil•

ities and auxiliary transportation

equipment has further improved

efficiency in these areas.

mation systems.

tal investment plans was also greatly

dependent on their willing cooperation.

We thank all our suppliers, car•

Smooth Supply of Production at

High Quality Levels

riers and service firms for their efforts.

The dedication and dependability

of the business partners, who in due

time provided goods and services of

Space-saving storage of semifinished materials

in the Untertuerkheim plant Our plant processes

high quality to Daimler-Benz at home about 500,000 tons of raw materials annually.

Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen.

Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures.

It was omitted in the pdffile to improve the usability of the file size.

Production

The success of our cars and

commercial vehicles in inter•

Start-up of Production of the

Compact Car Series

Our component and parts produc•

ing plants were further enlarged and

modernized. With the start-up of pro•

duction of the new light-duty truck

series in Woerth, production of the

OM 360 engine series commenced

national competition is founded

mainly on their reliability, quality

and performance. To maintain and

to further improve the current high

standards in the future, we must

accord priority to the use of the

most up-to-date production tech•

nologies and manufacturing sys•

tems. At the same time it remains

our goal to steadily raise produc•

tivity. Additionally, innovative tech•

nology ensures us the flexibility in

Following the introduction of the

190, output was increased in accor•

dance with our plans. Right from the

start of large-scale production, indivi• simultaneously in Mannheim.

dual body subassemblies were manu• The production of heavy commercial

factured in Bremen and sent to Sindel• vehicle transmissions was started in

fingen for final assembly. In 1983, we Gaggenau. In Hamburg, Berlin, Kas•

completed our large capital spending sel and Bad Homburg, we invested

program for the reorganization of the substantial sums in optimizing pro•

Bremen plant, so that final assembly

could also be taken up in Bremen at

duction flow and the replacement of

production facilities.

the manufacturing process that per• the beginning of 1984, one year after

mits quick and elastic reaction to

changes in demand.

190 production began in Sindel•

fingen. The new engines, transmis•

sions and axles of the compact class

required large capital investments at

the Untertuerkheim plant, a multitude short notice, require manufacturing

of new production start-ups had to

be accomplished.

High-Tech Facilities

Provide Flexibility in Production

The shifts in demand, often at

Reorganization of Our Domestic

Plants Largely Completed

flexibility which only highly automated

facilities can provide. For this reason,

we have further supplemented our

conventional facilities with numerical•

ly controlled (NC) machines and in•

dustrial robots in all plants. In the

Within the framework of our long-

range plan for our manufacturing

system, we largely concluded in 1983

the preparatory measures for the

relocation of van production from

Bremen to Duesseldorf, Bremen is

purely a car plant now. The car

division has two assembly plants,

one in Sindelfingen and one in Bre•

men. We have concentrated final

assembly of trucks, formerly shared

between five plants (Hamburg, Bre•

men, Duesseldorf, Kassel and Woerth),

Commercial Vehicle Plants Readied

for Production of New Series

To concentrate all van production future, we shall be able to react even

in Duesseldorf, we spent consider•

able sums for the basic reorganiza•

tion and the expansion of this plant.

Efforts centered on redesigning the

production facilities for the two series

of our van program.

more quickly to market changes and

incorporate product design improve•

ments in production.

Work Alleviation

at the Workplace

At the Woerth plant, production of

in the Duesseldorf and Woerth plants. the successor generation of our light

An important aspect of the use of

The manufacturing pooling system of truck range was started. In the prepar• industrial robots is our desire to re•

assembly plants and component

atory phase, integration of the new

lieve our employees, through state-of-

manufacturing plants is the basis for a series into existing production and

the-art technology, from physically

future-oriented, efficient production of model structures called for the enlarge• exhausting work. An example of this

our vehicles. The initiated extension

of the production-pooling system of

the foreign factories amongst each

other and with our domestic factories and a third production line for frame

also serves this purpose.

construction.

ment of buildings, the installation of

an interim storage area for cabs

equipped with assembled interiors,

is the use of auxiliary robots for the

automated loading and unloading of

production machines with short fixed

operating cycles. We are convinced

that working tools must

Production

at Daimler-Benz AG in such a way

that function and appearance re•

main unchanged on the one hand,

but low-cost small-volume manufac•

ture through use of simplified proces•

sing technologies becomes possible

on the other. For instance, for the cab

of forward control heavy-duty commer•

cial vehicles we developed a new pro•

cess of cutting large sections of sheet

metal panels; taking into account local

conditions, it allows the advantageous

substitution of labor-intensive stretch-

forming and deburring operations for

capital-intensive deep-drawing pro•

cesses. The test results obtained with

prototypes are very promising.

Body Quality Control Station: using two

eight-axled industrial robots, programmable for

different models, 500 test points are checked

for proper tolerance.

more extensive use of this method

in large-scale production. We are

reducing the volume of machining

operations with the aid of precision

At our South African production

company, a different manufacturing

non-cutting shaping techniques; preci• technology from that used in large-

sion pre-shaping of workpieces

appreciably shortens cutting time.

Several parts, such as the conical

nipple on the thin-walled diesel injec• the combined processing of engine

tion line, can even be shaped to their parts of different model series. With

scale production in the domestic

plants was introduced in production

according to our plans. Its purpose is

also take into account the health of

our employees. Accordingly, we sys•

tematically plan new facilities using

ergonomic criteria. Our special efforts final size without any cutting at all.

the installation of a new paint facility,

are directed toward the creation of

jobs for employees who can no

longer perform at peak capacity.

In production engineering we have we introduced modern production

further improved CAD/CAM data ex•

change to raise quality. We are en•

deavoring to have a continuous flow

of data from design to NC manufac•

ture for the largest possible range of

parts. CAD/CAM milling of models

and tools for body and component

parts was employed to an increasing

extent.

technologies there, designed to

raise quality further and to expand

production capacity. We are currently

working on a new general layout for

the East London plant. The engine

plant of Atlantis Diesel Engines (ADE),

planning of which was our responsibil•

ity, successfully began operation.

All engines used by South African

commercial vehicle makers are

being built here.

At our U.S. subsidiary Freightliner,

we concentrated production in two

assembly plants, in Portland and

Mount Holly, greatly improving efficien•

cy and, at the same time, quality. At

present, the expansion of production

Greater Precision Through Modern

Production Technology

The use of the latest manufactur•

ing technologies enabled us in 1983

to make decisive advances in manu•

facturing operations. For the first time

in the German motor vehicle industry,

we employed laser technology for the

welding of production parts.

This technique makes high-speed,

high-precision welding possible.

We have already looked into other

applications and are preparing for

Planning and Production Activities

at Foreign Subsidiaries

In the light of the competitive

situation in foreign markets, particular•

ly in the Southeast Asian area, com•

mercial vehicles were re-engineered

Production

Examples of this are the new auto•

capacities, which is coupled with

additions to the product range, is

being planned. At Mercedes-Benz do

Brasil, the total reorganization of com•

ponent manufacture has been con•

cluded with the occupancy of the

new building for engine production

and with the opening of the modern

engine-testing facility.

Measures to Protect the Environment

and Save Energy

matic galvanizing units in the galvaniz•

ing shops, which produce substantial•

ly less tonic waste water, and the

substitution of quick-process gas-

nitriding facilities for nitride salt baths

The hot-spray technique is an

example of how we are taking envi•

ronmental protection into account.

On the one hand, we improve existing so that the hardening processes

facilities to reduce pollutant emis•

sions; on the other hand, for new

facilities, we make use of modern

involved do not require cyanide. Our

thoughts on environmental protection

are not only taken into account at our

technologies which take into account domestic factories but also at our

environmental aspects in the produc• foreign plants. At our South African

Computer-Assisted

Quality Control Expanded

tion process itself and in the materi•

subsidiary, for example, a new paint

The measures to raise our already als and agents used. In this way we are

high quality standard are aimed at

shop connected with a central heating

able to reduce the formation of residues station was built; we were thus able

guaranteeing a uniformly high quality and at the same time save energy.

in large-scale production. In addition,

to optimally combine measures for a

qualitatively further improved manu•

facturing technique together with clean

and safe waste disposal.

we have continued to expand

High assembly quality at Mannheim plant

computer-assisted quality control.

These systems permit on-line display

of measurements along the produc•

tion line and in the testing rooms;

because of the continuously updated

data, deviations from standards can

be detected early and exceeding of

tolerances can be prevented. The

outstanding anti-corrosion protection

of our vehicles has tradition. We use

modern coating technologies for this

purpose. In 1983, we put additional

cathodic paint dip facilities into opera•

tion, both for painting car components

and commercial vehicle cabs. More•

over, the efficacious impulse-marginal-

quantity spray technique for the rust-

proofing of cavities was introduced in

production. In UNIMOG cab priming,

we increased primer layer thickness

by more than 50 %, at the same time

using less solvent, through the em•

ployment of the hot-spray technique.

An 0 303 bus-shell is joined with a chassis.

) Daimler-Benz and M.A.N. each have a 50% interest in MTU Muenchen, which in turn

owns 83.8% of MTU Friedrichshafen.

) In addition, 179 Freightliner-dealers (Sales not under MB trademark).

Sales

The introduction of the compact

Service - An Important Part

of the Sales Package

our mobile service teams; the latter

having operated successfully for many

years. For commercial vehicles in

particular, a wide range of services is

especially important because of the

great significance of post-purchase

costs for overall economy.

We have developed the Mercedes-

Benz Emergency Service System into

a 24-hour standby service in impor•

tant European markets. The emergen•

cy service went into action in the U.S.

market in 1983 for the first time.

series 190 in foreign markets and

the continuing difficult situation in

the commercial vehicle markets

constituted the main challenges to

our sales division in 1983. Our

worldwide organization once again

met the challenge and proved its

flexibility and efficiency. In the area

of cars we succeeded in attuning

our marketing and field organ•

ization to the new target groups of

the 190, and at the same time in

further cultivating the market for

our traditional program. Some

In order to achieve long-term mar•

ket success, and to increase custom•

er satisfaction, improvements in the

quality and quantity of after-sale "ser•

vices" become increasingly impor•

tant. We have taken this heavier em•

phasis on "service" into account by

extending our range of services. Op•

tional equipment counseling and infor•

mation, which will assist in sales

negotiations, were intensified. In all

sales areas, the wishes and expecta•

tions of our customers were focused

on even more.

The favorable response justifies further

extension of the system and introduc•

tion in other overseas markets.

0,000 new customers for the 190

and a new sales record for our

S-Class and hi-line, the cars which

shape our corporate image, are

significant evidence of this suc•

cess. In trucks, thanks to the high

overall economy of our products

and our efficient customer service

system, we were able to extend our

position in Western Europe. Our

policy of establishing our presence

not only in individual key markets

but in all the countries of the world

Our comprehensive transport ad•

visory services geared to business

management and specific applica•

tions drew a strong response from

our commercial vehicle customers.

Our customers have availed them•

selves more and more of the

Closer Contact with Customers

in Marketing and

in the Sales Organization

Our marketing strategy and the

activities derived therefrom were direc•

ted specifically at potential new cus•

tomers with the introduction of the

Compact Class 190. With optimum

delivery capacity, more test drives,

open communication and broad me•

dia coverage, we succeeded in attract•

ing many new customers to our

make. We want to convey a greater

customer proximity by standardizing

the appearance of the reception and

repair shop areas in our dealer•

ships. In 1983, as a first step in this

direction, model dealerships were

established in the most important

markets, concurrently improving oper•

ational procedures.

Mercedes-Benz fleet information sys•

tem, the driver training programs, and

In addition to the 5,500 world-wide service

facilities, mobile service resolves problems on

has been again particularly efficient. the spot

We also intensified our efforts in

the used car business as a sales

promoting instrument, to attract new

clientele. A wide range of used cars

offered, along with attractive presenta-

Sales

We intend to systematically ex•

pand this supply network in the future

as well. In 1983, we opened the first

regional parts depot in Northern Ger•

many. It supplies five factory retail

branches and their distributors.

An even larger assortment of parts is

thus available in time-saving proxim•

ity. Because of the growing parts

volume, new central depots were

also established abroad, for example

in South Africa, Spain and the United

Kingdom. We set up a new, second

parts depot in the South of France.

Individual and technically qualified consultants

meet the customer in our service reception area.

Our subsidiary Mercedes-Leasing-

GmbH, Stuttgart, considerably ex•

panded its business again in 1983.

Lease and vehicle sales revenue

Training and Assistance Ensure

International Competitiveness

tion and comprehensive information

material, facilitate for even more peo• rose 35 %, to DM 320 million.

ple access to Mercedes-Benz.

With sales of 50,000 units annually,

our sales organization is the biggest

used car dealer in Germany.

Leases were arranged for 9,276 vehi•

cles in all (last year 6,058), at an

investment of DM 439 million to the

company (last year DM 219 million).

Commercial vehicles accounted for

about half of the new leases. In

vehicle leasing we see an important

marketing instrument with growing

opportunities for sales in the coming

years.

To maintain our international com•

petitiveness, we have safeguarded

the high technical, professional and

organizational standards of our field

organization by an extended training

and development program. Especial•

ly the dual system of hands-on train•

ing in-house and in the field, which

ensures fast and thorough communi•

cation of broad technical know-how,

was further improved in 1983. Man•

agement training for our field organ•

ization concentrates chiefly on market•

ing know-how and management

methods, in addition to general busi•

ness management subjects. For ow•

ners of Mercedes-Benz dealerships,

we offered more seminars dealing

with the improvement of customer

service with reference to the relevant

local markets.

Leasing Acquires Increasing

Importance in Sales Financing

We extended our sales financing

activities especially in the area of

vehicle leasing in 1983. In Belgium,

our subsidiary Fimarent, SA, Brus•

sels, engaged chiefly in commercial

vehicle leasing, was restructured to a

full-service financing company.

Parts Service Further Improved

Our three-tiered supply system

once again proved its value in parts

service. Central factory depots, retail

branch or import warehouses and,

To emphasize its new functions we

have renamed it Mercedes-Benz

Finance Belgium SA The U.S. financ• in proximity to the customer, service

ing unit Mercedes-Benz Credit Cor•

poration added car leasing to its line

shop parts stores guarantee the best

possible supply at the least possible

of business. The company headoffice storage cost. In addition, training,

was transferred from Portland,

order planning aids, EDP assistance

Oregon, to Norwalk, Connecticut.

and express parts services enable all

Since 1983, Merfina S.pA, Rome, has service shops to offer Original Parts

also been offering car and truck

leasing in addition to retail financing.

service that is in keeping with the qua•

lity of our vehicles.

Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen.

Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures.

It was omitted in the pdffile to improve the usability of the file size.

Employment

Against the background of an

improved overall economic situa•

tion in the Federal Republic of Ger•

many, the job market remained

tight. In numerous other countries,

economic conditions were similar;

in some instances, even worse.

Emphasis of Our Personnel Policy

Constructive Cooperation

with all Employee Representatives

In 1983, we further developed our

personnel policies. By continuing the

structural changes initiated in our

In the light of growing bargaining

differences and to some extent, a

personnel departments, we were able heating up of socio-political discus•

to improve the basis for meeting the sions, we can once again report

constructive cooperation with the gen•

Our goal has been to offer employees eral labor council at the company

In Germany, Daimler-Benz was able needs of all other departments.

to sustain the overall high level of

employment. In conjunction with

the start-up of the Compact Class

and the reorganization of produc•

tion which this entailed, we were

even able to add more than 2,000

people at the car plants and at the

jobs that match their abilities and

potential to the extent possible.

On the other hand, the employees

must be prepared to adjust to

level, and with the labor council mem•

ber at the plant and retail branch

levels. Despite occasional serious

controversies on the issues at hand,

changes in their working environment the eventual settlements took com•

and, with the assistance of the com•

commercial vehicle factory in Dues- pany through continuing education

pany and employee interests equally

into account. The labor council elec•

tions in March of 1984 ended for the

most part with the endorsement of

the incumbent labor council mem•

bers - the hitherto existing work of

the labor council can thus be carried

on without disruption. The speakers

for the management staff were also

newly elected at the end of 1983; their

composition also reflects a high de•

gree of continuity. The working rela•

tionship with them is based on prin•

ciples which were confirmed in writing

in 1978.

seldorf. To ensure continuity of

employment, it was necessary to

even out the employment needs

between the individual factories in

programs, develop new skills.

For only through the skill, the commit•

ment and the performance of our

employees can the world-famous

quality and market success of our

product be assured.

983. Although the temporary re•

assignment of employees to other

factories involved personal sacrifice

for employees and additional costs

to the Company, we feel that this

method of offsetting fluctuations in

employment, under the given cir•

cumstances, is better than other

conceivable measures for the solu•

tion of manageable employment

problems.

Technological change has been

a largely continuous process in the

past, but trends in the individual

areas of production have been quite

different, as were the consequences

for human labor. To be prepared to

meet future demands, all the people

who are responsible for planning

work processes and jobs are working

Employees and Employee Structure

Our South American manufactur• together not only to increase efficien•

ing companies could not avoid fur•

ther adjustments to the work force

due to the continuing difficult eco•

nomic and market conditions.

cy, but also to improve working condi•

tions. The guiding principle is that

While worldwide employment at

the end of 1983 had declined slightly,

efficiency improvements and humani- the work force at Daimler-Benz AG

zation are not mutually exclusive.

New technologies may involve risks;

but they do open up the prospect of

progress in organizing work flow to

suit human needs. In our personnel

and training work this past year, we

grew by more than 2,000 to 150,601

of which 103,342 are wage earners,

38,435 are salaried employees and

8,824 are apprentices. Female em•

ployees composed about 12 % of the

total work force. The distinction be•

have endeavored to achieve a balance tween wage and salary earners con•

here as well.

tinues to play a lesser role in terms of

labor law and company practice.

Employment

orders worth more than DM 13 million

with workshops for the handicapped.

Labor Contracts

Wages and salaries in the metal-

working industry were increased by

3.2 % retroactive to February 1,1983,

following lengthy bargaining negotia•

tions. The termination by the metal•

workers' union of the collective bar•

gaining agreement with respect to

working hours effective at year-end

1983 will have a grave impact on col•

lective bargaining policy, the nation's

economy, and individual enterprises.

This was accompanied by the demand

for a 35-hour workweek without loss of

pay. Thus, the discussions and con•

troversies between management and

labor on the subject of altered work•

ing hour arrangements have become

more intensive.

A major part of job training is performed on

modern machines.

The average age of our em•

ployees rose again in 1983, to 39.4

years. The average service with the

Company also increased to 12.7 years.

The large number of high-seniority

employees (16,745 wage earners and

A specially equipped assembly work station for

paraplegic employees at the Gaggenau plant.

Meanwhile, about a third of the wor•

kers have employment contracts as

monthly wage earners, and in most

bargaining districts there are common salaried employees who have been

industry-wide agreements in force,

dealing with non-pay-related items

employed at Daimler-Benz for 25

years or more) reflects the loyalty of

applicable to both hourly and salarid our employees to the company.

employees.

At the end of 1983, a total of

0,175 foreign workers were em•

We provide suitable jobs for em•

ployees with health-related limitations

to give them the opportunity to con•

tinue working commensurate with

their reduced capabilities. Looking after

older employees and those who can

no longer perform at peak efficiency

is an established practice in our

personnel work. As in the past years,

we met the employment quota of the

law pertaining to the severely handi•

capped. In addition, we agein placed

ployed at Daimler-Benz in Germany.

Their share of the overall work force

has declined further. Our foreign em•

ployees make an important contribu•

tion to the Company which we can•

not do without in the foreseeable

future. We will, therefore, keep up our

strong efforts to integrate them within

the company.

Employment

DM 2,782), and totalled DM 420 mil•

lion, up from DM 396 million last

year. These figures also express our

appreciation for the work performance.

Larger Payments for Employee

Capital Formation

As provided for by the labor con•

tract recapital-formation payments,

each employee received DM 624 for

investment purposes under the 3rd

capital formation law. As in 1982, an

additional voluntary payment of

DM 156 was made for capital-forming

investments, to which a bonus of

DM 80 was added in consideration of

the previous year's satisfactory earn•

ings. For long-term investments, the

employees could choose between

employee shares and company debt

instruments. We issued a total of

77,130 employee shares in 1983.

The number of employee sharehol•

ders thus increased to more than

Computer-assistedengineeringsystemsprovide

new scope for creative work.

Social security contributions

Further Increase of Personnel

Expenses

increased again in 1983 due to in•

creases in the wage base and, in

September, due to higher contribu•

tion rates for old-age pension insur•

ance. Fortunately, most health insur•

ance companies reduced their

premiums. A large number of Daimler-

Benz employees did volunteer ser•

vice on the self-administration commit•

tees of the social insurance institutions

again last year and were thus able to

successfully contribute their work

experience.

The table below shows the change

in personnel expenses of Daimler-

Benz AG. The percentage of person•

nel expenses in relation to total sales

amounted to 28.7 % (last year 28.2 %).

(Compare chart on page 74.)

Personnel expenses - wages, sal•

aries and social levies - rose 4.4 %,

to DM 8,468 million.

The average Christmas bonus

and special renumeration for each

eligible employee (excluding train•

ees) increased to DM 2,951 (last year

Employment

3,000. Since 1973, the employees

Canteen Services, Health and

Job Safety

have purchased more than 417,000

employee shares.

Within the framework of individual

capital formation, we were able

to help our employees in building or

purchasing 1,956 apartments or

homes through new loans totalling

DM 45.5 million. Loan commitments

in 1983 ran almost 30 % higher than

the year before; this may be attrib•

utable to various government mea•

sures for the promotion of residential

construction. In the last ten years,

loans have been granted to the

extent of DM 267 million.

Through additional measures

taken in the cafeteria service areas,

we were able to further improve the

varied menu of hot and cold meals

for employees. We also expanded

the variety of warm meals offered in

the evening for late-shift workers.

Around ten million meals annually

are furnished to employees.

Medical care through our plant

health service was further extended

in 1983. In addition to regular check•

ups and consultations, as provided

The result of qualified job training:

a foreign employee on a CNC milling machine.

Company Pension Benefits

The old-age assistance provided

by Daimler-Benz AG and the Daimler-

Benz Provident Fund is designed,

together with social security and an

individual's own provisions, to give

employees and their dependents far-

reaching economic security beyond

the end of their working lives.

In 1983, DM 154 million was dis•

bursed for current benefits to 34,569

pensioners, widows and children.

At the end of 1983, more than 2,800

former employees - over 58 % of

them foreigners - had vested pen•

sion rights. We helped some 5,200

employees through one-time assis•

tance payments. To cover future

benefits, we allocated DM 770 million

to pension reserves or to the Daimler-

Benz Provident Fund, respectively.

Last year, the percentage of disability

cases among new pension recipients

at Daimler-Benz was again apprecia•

bly lower than the average for all

insured persons nationwide.

Employment

same (8.8 %), it declined slightly for

salaried employees, to 4.3 % (last

year 4.5 %).

Work Conditions

In the course of implementing the

current large investment program,

the work stations of many employees

were redesigned in 1983. Work meth•

ods are engineered so as to avoid or

reduce stress and strain to the extent

this is technically possible and eco•

nomically feasible. We make it a point

of considering all scientific findings in

ergonomic workplace design.

In addition, we increasingly install

flexibly designed operating systems

in order to be able to react as quickly plant.

Example of practical application of professional•

ly-oriented job training: construction and testing

of electric-hydraulic circuits.

Precision work during the valve adjustment

of the 190/190 E engines in the Untertuerkheim

as possible to shifts in market de•

mands. This flexibility can also be

used in work assignments, for exam•

for by law and company policy, the

contribution of plant physicians to

ple for the purpose of matching job

requirements to employee abilities.

workplace design has acquired grow• In numerous individual cases it has

rule out work designed to fit em•

ployee abilities.

ing significance. At the end of 1983,

we had 28 plant physicians and 132

trained medical workers; to this must

be added private physicians under

contract in our retail branches and

subbranches.

The decline of overall accident

rates of past years continued in 1983.

The number of accidents per million

productive man-hours was cut

to 63.5 (last year 67.4). This was the

result of our high safety standards

and the measures taken to reduce

behavior-related accidents.

been demonstrated that technical

and economical requirements do not

6,500 Suggestions Received

In 1983, we received 16,500 sug•

gestions for improvements. Their num•

ber underscores the significance of

the Company suggestion program.

The 14.5 % increase over 1982 reflects

the great willingness of our employees

to examine their work environments

and develop new ideas from which

the Company also profits. We paid out

DM 3.6 million in awards

Modern leadership principle: a decision is

always preceded by discussion among fellow

employees.

Training Activities Stepped Up

The average absentee rate due to

illness was unchanged from last year's

With a total of over 8,800 appren•

tices and trainees, training at Daimler-

Benz AG was at its highest level to

date. In view of the great demand for

7.6 % (based on the number of stand•

ard working hours). Whereas the

rate for wage earners remained the

Employment

training positions - 24,000 youths ap• ployees received in 1983 was design•

plied for training last year just at our

ed primarily to help them develop

Company - it is our desire to improve their leadership abilities.

the situation of school graduates

and youngsters looking for their

first jobs. We continued our efforts to

help solve socio-political problems

The increased quantitative and

qualitative responsibilities of the train•

ing division called for numerous in•

vestments in buildings and facilities.

by training foreign youths and young• Thus, in Bremen, the second stage of

sters with learning disabilities.

For many high-school graduates,

the training at the Baden-Wuerttem-

construction of the training center

there, and at the Hamburg plant, the

new building for the factory training

berg Vocational Academy is a desira• service, were completed.

ble alternative to university training.

At the end of 1983, more than

Over 1,600 applied for the 60 vacan•

2,300 youngsters were undergoing

cies at the academy. At year-end, 170 training in 28 training centers operated

students of the Vocational Academy

had training contracts with

Daimler-Benz.

by our foreign subsidiaries and

general distributors, mostly in newly-

industrializing and developing coun•

tries. In Saudi Arabia, Daimler-Benz

helped to build a new training center.

The health service includes modern labs for

different analyses.

Of the 2,447 apprentices who

successfully completed their training,

we were able to give jobs to 82 % of

them. We hired far more than we

needed to meet our own direct de•

mand for skilled employees so as not

to dismiss the successful apprentices

straight into unemployment. However,

we had to expect the new employees

to understand and accept that they

could not always be immediately

placed in jobs commensurate with

their training.

In 1983, we again offered our

employees a comprehensive career -

building educational program. Here

we placed particular emphasis on the

changing requirements occasioned

by the use of new technologies. In all

of last year, more than 43,000 em•

ployees took part in courses to update

their skills. Of particular concern

to us is the support of our personnel

in the exercise of management re•

sponsibilities. The advanced training

which more than 7,000 of these em•

Single work stations permit employees to

work independently of line speed and

according to their own abilities. Unrealistic

bodystress positions are avoided with specially

created work stations.

Subsidiaries and Affiliated Companies

The goal of our investment pol•

icy in subsidiaries and affiliated com•

panies remains the strengthening of

the Group's competitiveness in

international markets.

Consolidated Companies

Consolidated Companies With Their

Own Manufacturing Facilities

Larger Contribution

from Subsidiaries

Mercedes-Benz do Brasil

The international commercial

In 1983, the subsidiaries included in

In Brazil, the recession which has

vehicle business did not profit over• consolidation increased their sales at afflicted the country since 1981 in•

all from the economic recovery

which began in 1983 in almost all

industrial countries. There was a

further contraction of demand in

important foreign markets, particu•

larly for medium- and heavy-duty

an above average rate, by 6.8 %, to

DM 16.9 billion. While the companies

with their own truck manufacturing

facilities showed a decline in sales to

creased in severity. The inflation rate,

now over 200 %, and the yet unsolved

debt and balance of payments prob•

lems precluded an economic recovery.

DM 4.6 billion (last year DM 4.8 billion), The GNP declined 3 %. The demand

the distribution companies boosted

for capital goods, especially commer•

trucks. Extremely keen competition their sales to DM 12.3 billion (last year cial vehicles, again fell sharply in 1983.

in prices and terms was the

DM 11 billion). The results of operations

Mercedes-Benz do Brasil SA,

consequence.

at the different companies varied con• Sao Bernardo do Campo, suffered

In all countries in which we hold siderably. The contribution of the

from the state of the country's eco•

nomy. Its commercial vehicle sales

dropped another 21 %, to 24,793

units. The company defended its

leading position in Brazil, with market

shares of 50 % for trucks and 86 %

for busses and bus chassis. Due to

the poor state of the economy in the

neighboring Latin American countries

and the slow revival of the U.S. com-

an interest in commercial vehicle

manufacturing companies we were

able to defend our market position

foreign subsidiaries to consolidated

net income - converted from local

currency to D-mark and thus influenc•

overall, and even improve it in some ed by the currency fluctuation -

cases. Our subsidiaries and affiliated increased to DM 285 million (last

companies achieved this through

systematic, flexible adaptation of

their structure and their product

offering to the conditions of their

respective markets.

year DM 202 million). Again in 1983,

our policies at home and abroad

were in accordance with the "OECD

Rules for Multinational Companies".

With the capacity for fast action

and the adaptability demonstrated

by our distribution and production

companies, we see ourselves well

equipped to make use of opportuni•

ties for additional sales when eco•

nomic conditions in the international

motor vehicle markets will again

improve.

ln Brazil, every second truck is a

Mercedes-Benz. Here, a L 2219 hauling wood.

Subsidiaries and Affiliated Companies

mercial vehicle market, which did not

yet permit larger deliveries from Brazil,

the company's exports declined

further to 2,244 units (last year 3,510).

In adjusting to the decreased de•

mand and to limit inventories, the

company once again had to cut back

output during the course of the year.

Following the unavoidable layoff of

,800 employees in January of 1983,

00 more employees accepted, in

September and October, the compa•

ny's separation offer in exchange for

substantial, for the most part discre•

tionary severance payments. Employ•

ment declined to 10,856 in all (last

year 14,647).

Sales denominated in local curren•

cy rose - due to inflation - by 74 %,

to 259 billion cruzeiros. Converted to

D-marks, sales were down 38 % to

DM 1.3 billion. Due to the timely and

purposeful adaption of its structure

to the renewed market shrinkage,

and thanks to a healthy long-range

financing policy and liquidity provi•

sions, the company still had satisfac• Benz do Brasil SA, supplies castings

tory earnings even in 1983.

Capital investments were made

according to schedule. They served

Assembly of front axles for trucks at

Mercedes-Benz Argentina.

Mercedes-Benz Argentina

The economic situation stabilized

in Argentina in 1983. A slight overall

improvement was apparent, yet the

inflation rate climbed above the

SOFUNGE, Brazil

SOFUNGE SA, Sao Paulo, a whol•

ly owned subsidiary of Mercedes-

00 % mark (wholesale price index).

While sales of cars and pickup trucks

increased substantially over the pre•

vious year, the Argentinian commer•

cial vehicle market remained at the

level to which it had fallen sharply

from 1980 to 1982. Exports, on the

other hand, declined appreciably.

Mercedes-Benz Argentina sold

to the Brazilian motor vehicle indus•

try. Due to the difficult sales situation

on the motor vehicle market, it had to

mainly to further improve and supple• reduce output of castings by one

ment the product line and thereby

effectively safeguard the market

position.

The country's tight economic and

financial situation does not justify the

expectations presently for a general

third, to 20,000 tons in 1983.

The company was forced to repeatedly

place workers on short time work and

to trim its work force by 21 %, to 1,397.

Converted to D-marks, sales

4,022 commercial vehicles in Latin

American and African markets, in all

about 15 % less than the year before.

Domestic sales of the company's

own trucks declined 7 %, and the

market share thus dropped to 55 %

declined 25 %, to DM 72 million.

upturn and a recovery of the commer• The company almost broke even

cial vehicle market. For 1984, there•

fore, our subsidiary can expect Brazil•

ian business volume to be on the

scale of 1983. Exports should recover

some.

during the reporting year.

(last year 59 %). The government

decided to close the borders to vehi•

cle imports with the result that busi•

ness with cars and commercial vehi-

Net sales of our foreign subsidiaries were converted at average annual exchange rates; changes in currency relations resulted in significant variances, sometimes preventing comparability.

Inclusive of the figures of MTU Maintenance GmbH and from 1983 on, of AG Kuehnle, Kopp & Kausch.

Effective April 1984, name changed to Mercedes-Benz of South Africa (50.1 % owned).

Sales for business years 1982/83 and 1981 /82 respectively.

These companies manufacture commercial vehicles under their own trademark; they do have, however, licensees for individual Daimler-Benz components.

Subsidiaries and Affiliated Companies

cles from our German plants almost

came to a standstill.

Slow sales forced the company

once more to cut back production or

assembly respectively, to 3,881

In this situation, Freightliner redoubl•

ed its sales efforts and succeeded in

raising heavy truck sales in North

America (U.S.A. and Canada) by

57 %, to 12,021 units. Against persist-

The noticeable increase in sales

and production enabled us to again

raise employment: the Freightliner

Group had 4,867 employees at year-

end (last year 3,672). Converted to

commercial vehicles (last year 4,216). ingly stiff competition, the market share D-marks, consolidated sales rose

Employment nonetheless remained

almost unchanged at 1,876 as of the

end of the year (last year 1,929).

Sales in local currency rose only

because of inflation. In terms of

in the U.S.A. was thus upped to 13.4 % 56 % to DM 2 billion. Operating re•

(last year 10.1 %) and in Canada, to

sults were positive thanks to the better

10.4 % (last year 6.4 %). Sales of the

utilization of capacities and success

medium-duty Mercedes-Benz trucks, with efficiency improvements.

assembled in the U.S. at Hampton,

D-mark, they were on a level with last Virginia, from components imported

In 1984, we except the market

recovery for medium- and heavy-duty

trucks to continue in the U.S.A. and

Canada. The product offering of the

Freightliner Group will be systematical•

ly modernized and extended. The

engineering capacities required for

this task have been concentrated,

since September, 1983, in the new

research and development center in

Charlotte, North Carolina.

year, at DM 403 million. After having

received financial support from the

parent in 1982, the company - with

great efforts - was able in 1983 to

find a new equilibrium by adjusting

the cost and revenue structure to the

changed market situation; the com•

pany showed a profit in 1983.

from Brazil, rose 35 % to 3,139 units.

Our share of this hotly contested

market segment (diesel and gasoline

trucks) increased to 2.9 % (last year

2.7 %).

A new Freightliner-tractor with sleeper.

The heavy-duty truck program is continuously

upgraded to satisfy the market requirements

in the U.S.A.

Freightliner, U.S.A.

In 1982, we reorganized our ex•

panded truck activities in the U.S.A.

by bringing in the medium-duty

Mercedes-Benz truck business (9 tons

to 15 tons GVW) into the Freightliner

organization, which previously had

handled only heavy-duty trucks of

15 tons and up. These structure-

improving measures were continued

in 1983 as planned.

Beginning about autumn, the eco•

nomic upturn in the U.S.A. also led to a

trend reversal in the market for me•

dium- and heavy-duty trucks, which

had been sharply regressive for four

years. Total 1983 U.S. sales of heavy-

duty trucks thus rose to 82,000 units

(last year 76,000). However, the mar•

ket for medium-duty trucks, with sales

of 106,000 units, hovered around last

year's level.

Subsidiaries and Affiliated Companies

Euclid, U.S.A.

Mercedes cars were sold (last year

,588). In terms of D-mark, sales

to (MBC), were able to boost car sales

in a resurging market to 76,621 units

declined to DM 597 million (last year

DM 670 million). The results of opera•

tion were again less than satisfactory

in 1983 due to the insufficient utiliza•

tion of production capacities.

(last year 68,750) and thus strengthen

Demand for heavy-duty haulers

in the U.S.A. remained slack in 1983.

A shift to the clearly weaker export

markets was made difficult, as in

their position. The continued strong de•

mand for our S-Class models as well

as coupes and SL roadsters was

chiefly responsible for this favorable

trend. Although the U.S. market for

diesel cars was nearly cut in half, we

were able to sell 4 % more of our

fuel-efficient Mercedes diesel cars.

With a 73 % share (last year 79 %) of

our overall sales in the U.S.A., the

diesel's extraordinary significance is

unchanged. In 1984 we are expect•

ing - thanks also to the new 190 which

was introduced in October of 1983 -

further growth in our car business.

1982, due to the strong U.S. dollar.

This led to growing overcapacities in

the industry and to even stiffer price

competition.

With demand sagging further,

Euclid was able to maintain its position

in North America and on the world

market. Sales - converted to D-marks

Distribution companies

Mercedes-Benz of North America

and Mercedes-Benz Canada

Our North American distribution

companies Mercedes-Benz of North

America, Inc., Montvale (MBNA), and

Mercedes-Benz Canada, Inc., Toron•

continued to decline, however, to

DM 411 million (last year DM 464

million). This trend was reflected once

more in negative results of operation.

In January, 1984, we sold Euclid to

the U.S. construction machinery maker

Clark Equipment Company.

In settlement of a part of the purchase The foreign manufacturing and assembly companies with

price, we received in exchange about Daimler-Benz ownership manufactured commercial vehicles and engines in

% of the correspondingly increased the following countries:

capital stock of Clark Equipment.

Mercedes-Benz Espana

The recession in Spain, continuing

for the third year, caused the Spanish

commercial vehicle market to con•

tract further in 1983. Mercedes-Benz

Espana, Madrid, had to adjust van

output accordingly. Despite introduc•

tion of a new van model in the upper

payload segment, the market share

declined slightly to 41 % (last year

3 %). Whereas sales of vans manu•

factured in Spain fell to 9,917 units

last year 11,419), sales of imported

(

Mercedes-Benz commercial vehicles

rose 24 %, to 815 units, in spite of

the high duties which continue to be

imposed on them. In addition, 3,763

Subsidiaries and Affiliated Companies

The capacity of the sales and

service network will be enlarged con•

siderably in keeping with the sales

trend. At the beginning of 1983, con•

struction of a service school in Mont-

vale and of two parts depots, in

Maryland and New Jersey, was begun;

a retail store with service facilities

is being constructed in Hollywood.

These projects will be completed in

the summer of 1984. A new vehicle

preparation center in Maryland was

completed in mid-1983. Our Canadian

distribution company opened a

second retail outlet in each of the

cities Montreal and Vancouver.

The company's consolidated

sales increased to the equivalent of

DM 6.0 billion in 1983 (last year

DM 5.2 billion). Results of operation

were satisfactory once again.

Mercedes-Benz Credit Corporation,

U.S.A.

In the U.S.A. also a great success:

The Roadside Assistance Program, expanded

to all U.S. States in 1984.

Sales in local currency rose 6 %,

but decreased in D-mark terms to

DM 1.8 billion (last year DM 1.9 bil•

lion). Due to the renewed devaluation

of the franc, which correspondingly

Mercedes-Benz Credit Corpora•

tion, which offers sales financing for

heavy-duty Freightliner trucks and,

since 1982, for medium-duty Mercedes disproportionally affected by the mar• increased the cost of imports from

trucks and Mercedes cars, heavily

expanded its business activities

in 1983. Accordingly, earnings were

good. The company's headquarter

was moved to Norwalk, Connecticut,

from Portland, Oregon, following

the broadening of the company's

functions.

ket decline. Mercedes-Benz France

S.A., Rocquencourt, increased sales

the Federal Republic of Germany, but

also because of deteriorating market

by 4.2 % to 21,012 cars. The success• prices for trucks, results of operation

ful launch of the 190 contributed

substantially to sales. Some 6,000

cars of our new Compact Series

were sold in the year of introduction.

The general decline of the French

remained unsatisfactory.

Mercedes-Benz (United Kingdom)

In the United Kingdom, the positive

truck market (2 tons and up) by 8 %, development in the car market

to 150,000 units, mostly concerned

vans. Though our sales were also

down 5.5 % to 14,811 vehicles, our

market share for trucks of 2 tons

and up increased to 10.4 %

continued in 1983 with an increase of

15 % in new-car registrations, to

1.8 million units. With sales of 13,926

cars, Mercedes-Benz (United King•

dom) Ltd., Hayes/London, sold 9.2 %

more than in 1982. In addition to the

Mercedes-Benz France

The French market, with 2.0 mil•

lion new car registrations in 1983,

was about 2 % below the record set

in the previous year. Diesel cars were (last year 9.3 %).

SubsidiariesandAffiliatedCompanies

S-Class and hi-line, whose market

share rose further, our T-models

(stationwagon) contributed in particular

to the sales gain. The 190 was not

introduced to the market until the end

of the year.

Although registrations of new com•

mercial vehicles increased another

17 % in 1983, the overall volume of

the United Kingdom market is well

below the levels attained at the end

of the seventies. Again, with a strong

boost in our sales, by 23.9 %, to

1,145 commercial vehicles, we were

able to raise to 6.0 % (last year

.5 %) our share of the traditionally

largest European market for trucks

with GVW of 2 tons and more.

Sales in local currency rose 26 %,

and in D-mark terms 15 %, to

DM 1 .1 billion. Sales revenue and

profits were impaired by the clearly

lower average Sterling exchange rate

for the year.

ViewintothenewMercedes-Benzshowroom

atPiccadilly-CircusinLondon.

The cyclical trend also caused the

truck market (GVW of 2 tons and up) to

decline by 3.8 %. Despite the difficult

sales business, the company was able

to raise commercial vehicle sales

10 %, to 3,336 units. Our market share

increased to 15.7 % (last year 14.4 %).

Sales denominated in local cur•

rency were 5 % higher. Because of a

deterioration in the exchange rates

for the franc, sales in D-marks,

sales mainly affected vans. As a

result of our improved position in

heavy-duty trucks, our market share

Mercedes-Benz Nederland

The car market in the Netherlands of 23 % was on the same level as

grew a healthy 13 % in 1983. In

contrast, sale of diesel cars declined

overall. Mercedes-Benz Nederland

B.V., Utrecht, boosted car sales 7.2 %, Results of operation were still satisfac•

to 8,195 units, even though diesel

cars make up half of our sales pro•

gram. With 20 % of sales, the new

last year.

Company sales revenue rose 2 %

to the equivalent of DM 671 million.

and amounting to DM 606 million,

approximated only those of 1982

(DM 616 million). Results of operations

were satisfactory.

tory despite the stiff competition in

price and sales terms for trucks.

190 series contributed materially to

Mercedes-Benz Belgium

the increase. The truck market (2 tons

GVW and up) again declined overall.

Yet for trucks over 6 tons GVW, we

see a structural shift in favor of heavy-

duty vehicles. A decrease in sales of

trucks under 16 tons GVW was in

contrast to a slight improvement for

heavy-duty trucks. The 15 % drop in

Mercedes-Benz Italy

Mercedes-Benz Belgium succeed•

ed in maintaining its position in a

receding car market. Especially the

great response elicited by the 190

went a long way to enable us to

Italy's economy showed no signs

of recovery in 1983. The overall car

market was 6.3 % below the previous

year. Despite a recessionary trend,

match last year's high volume (10,681 which was even more pronounced for

units), with sales of 10,373 cars.

higher-priced cars, Mercedes-Benz

SubsidiariesandAffiliatedCompanies

Italia S.pA, Rome, was able to sell

and weaker commercial sales, com•

tant market. The addition of the 190 to

12,232 cars, matching last year's vol•

bined with a worsening of sales terms, our car range in the second half of

ume. The well received 190 series

led to unsatisfactory results of opera• the year influenced business for the

could offset the sales losses for diesel tion. Cooperation with our sales fi•

better. Contrary to the trend of the

cars, which had been caused to

some extent by higher taxes.

Truck demand declined in 1983.

We could not escape the general

economic trend. However, the

drop in our sales to 4,377 commer•

cial vehicles (last year 4,917) was not

as steep as the overall market decline.

nancing unit Merfina S.pA, Rome,

was deepened. The company now

also offers leasing to our car and

commercial vehicle customers.

commercial vehicle market, our sub•

sidiary sold 2,878 units (last year

2,762 units), slightly increasing its

sales. In heavy-duty trucks, the sales

organization was expanded by the

takeover of the Saurer sales and

service points. In the weight class of

14 tons GVW and up, the combined

Mercedes-Benz Switzerland

The more stringent emission and

Because of the car business, which noise regulations that went into effect market share of Saurer and

was included on the basis of a full

in Switzerland in October of 1982 had Mercedes-Benz reached 50 %.

year for the first time, the company's

sales revenue increased 44 %, to the new cars prior to that date. For this

equivalent of DM 696 million.

The continuing deterioration of the

exchange rate of the Italian currency

caused many customers to purchase

The sales revenue of the company

rose to the equivalent of DM 475 mil•

lion (last year DM 440 million).

Sales of Saurer trucks, production of

which was phased out in mid-1983,

reason, car sales declined in 1983;

moreover, the range of models offer•

ed in Switzerland has been notice•

ably reduced as had been expected. were handled by the Mercedes-Benz

Mercedes-Benz (Schweiz) AG, Zurich, sales organization. Earnings, though

TheNAW TruckingCompanyArbon&Wetzikon

isassemblingtheMercedes-Benzheavy-duty

tractor3850(38tonsGVW, engineoutput

whose sales of 4,794 units were

only down 4 %, did a good job of

maintaining its position in this impor•

impaired by the keen price competi•

tion in the commercial vehicle mar•

ket, were satisfactory.

368kw = 500hp).

Mercedes-Benz Australia

As a consequence of the conti•

nued stagnation of the Australian eco•

nomy in 1983, car and truck sales

were down 10 % and 19 %, respec•

tively. Mercedes-Benz (Australia) Pty.

Ltd., Mulgrave, Melbourne, consoli•

dated its market position both in cars

and trucks. The company sold 2,778

cars (last year 3,414) and 1,071 com•

mercial vehicles (last year 894).

By acquiring the majority interest

in Yorkstar Motors, Sydney, and in the

newly formed Mercedes-Benz (Dis•

tribution), Melbourne, we now have

direct influence in the commercial

vehicle wholesale and retail business

in the states of Victoria, New South

Subsidiaries and Affiliated Companies

Wales and South Australia, and with it mand both from civilian air transport

a better foundation for deeper market operators and for high-performance

DM 20 million to DM 30 million

At Kuehnle, Kopp & Kausch AG, low

capitel investment activity in the power

penetration. The addition of the car

diesel engines, the MTU Group -

wholesale function to the importing

without KKK - slightly increased sales plant construction, steel production

activity, to which the company had been 2.5 % over last year, to DM 2.2

previously limited, will enable us to ex• billion. MTU benefitted from its grow•

tend our market position. The conso• ing activities in the civilian aircraft

lidated sales revenue of the new Group engine business and from its world•

and chemical industries, impaired

orders for and sales of blowers,

compressors and steam turbines.

By contrast, turbocharger deliveries

were increased over 1982.

came to the equivalent of DM 479

million (last year DM 403 million).

Results of operations were break even.

wide sales activities with a compre•

hensive range of diesel engines.

At home, the MTU Group - without

Various large orders increased the KKK - had 12,684 employees at

order backlog once more, to about

DM 3.4 billion. Deliveries are spaced

out over several years so that the

year-end (last year 12,859 em•

ployees), with KKK 14,316. After due

provision for income taxes, the MTU

Mercedes-Benz Hellas

In its second year of operation,

plants in Munich and Friedrichshafen Group paid DM 5.2 million (last year

Mercedes-Benz Hellas, Athens, again are both assured utilization of base

DM 5.8 million) to each of the two

shareholders, Daimler-Benz and

M.A.N., in accordance with the profit

had to do business in a sharply

depressed motor vehicle market.

The sales of cars, trucks and busses

capacities. As a consequence of the

declining order inflow for diesel en•

gines in the years before, the facilities and loss pooling agreement.

were well off the previous year's mark. in Friedrichshafen were not operating

This is reflected in the decline of

sales revenue to the equivalent of

at full capacity. To adapt to this

situation, MTU Friedrichshafen had to

Deutsche Automobilgesellschaft

DM 108 million (last year DM 181 mil• institute - if only to a modest degree -

lion). Accordingly, results of operations short-time work in the latter part of

Deutsche Automobilgesellschaft

mbH, Hannover, jointly owned by

1983 which lasted until the beginning Daimler-Benz AG and Volkswagen-

were unsatisfactory.

of 1984. MTU Muenchen took the

logical step to broaden its activities in

the civilian sector by joining an inter•

national consortium to develop and

build an engine for aircrafts seating

werk AG, carried on its research and

development work in the field of

electric drive and storage systems in

Other affiliated companies

1983. The results were equally shared

by both partners in accordance with

the profit and loss transfer agreement.

DAUG-Hoppecke-Gesellschaft fuer

Batteriesysteme mbH, jointly owned

by Deutsche Automobilgesellschaft

mbH and Accumulatorenwerke Hop-

pecke Carl Zoellner & Sohn GmbH &

MTU Companies

150 people. With this cooperation

The domestic MTU Group, with

MTU Motoren- und Turbinen-Union

agreement MTU is now represented

in all important power ranges of the

Muenchen GmbH, MTU Motoren- und future market for large civilian jet

Turbinen-Union Friedrichshafen

GmbH, and MTU Maintenance GmbH,

Hannover-Langenhagen, was joined

in 1983 by Kuehnle, Kopp & Kausch

engines.

With the Rolls Royce jet engine

RB 211, MTU Maintenance included a Co. KG, Brilon, utilizes selected re•

second civilian jet engine in its main• search findings in the field of indus•

tenance and repair program and thus trial batteries. The company presen•

(KKK), Frankenthal, makers of turbo

machinery, whose capital stock major• added more airlines to its clientele.

ted its first products at the Hannover

Fair. The novel nickel-cadmium batter•

ies for stationary applications were

introduced to the market with consid•

erable success.

ity had been acquired at the turn of

the year 1982/83. The Group now

has consolidated sales of DM 2.4

billion. Despite continued weak de•

The development of the company

and the strengthening of its work

force continued parallel to this.

The capital stock was raised from

Subsidiaries and Affiliated Companies

NAW Nutzfahrzeuggesellschaft,

Switzerland

In connection with the capital stock

increases in December, 1983, and

March, 1984, Daimler-Benz AG raised

its share interest in UCDD from 36.7 %

to 50.1 %. The company has been

renamed Mercedes-Benz of South

Africa (Pty.) Ltd., Pretoria. The South

African Volkskas still holds 26.5 % of

company stock, and the Swiss Ernst-

Goehner-Stiftung's interest is un•

changed at 23.4 %.

NAW Nutzfahrzeuggesellschaft Ar-

bon & Wetzikon AG, formed at the end

of 1982, began operations in April,

1983. In addition to the completion of

old orders for the Saurer and FBW

programs, which are being phased

out, 192 Saurer heavy-duty cross•

country trucks were assembled for

Swiss customers. The assembly of

special-purpose vehicles on the basis

of the Mercedes heavy-duty truck

ANAMMCO, Nigeria

program was a fast-growing busi•

Nigeria's economic situation re•

mained critical in 1983. Sharply dimin•

ished foreign exchange revenue from

exports of crude oil and restrictive

economic policy measures resulted

in an acute shortage of essential

imports and seriously impaired indus•

trial activities in broad sections of the

economy. Anambra Motor Manufac•

turing Company Ltd. (ANAMMCO),

Enugu, Anambra State, was also

adversely affected. Its commercial

vehicle output had to be cut 30 % to

ness. Under this program, 348 units

could be assembled, converted and

made complete as compared to last

year's 109 units at FBW-Fahrzeug AG.

The bus chassis department also has Winner for the second time in the Paris-Dakar

Rallye for trucks: Mercedes-Benz model 1936 AK

all-wheel-drive dump-truck

first successes to show.

The company had 380 employees

(19 tons GVW, 261 kw = 355 hp).

at the end of 1983. Revenue totalled

DM 32.8 million. Earnings were

affected by the startup period.

ment which does not overlap with the

Mercedes class, serves both the

better utilization of our production

capacities and the strengthening of

our dealer organization with supple•

mental sales volume.

Mercedes-Benz of South Africa

2,551 units for lack of parts. Sales,

however - 3,434 units - were main•

tained at last year's level (3,610)

through additional inventory reduc•

tions. The market share in the class

over 2 tons GVW rose further, from

A full-fledged recession in South

Africa resulted in further declines in

both car and commercial vehicle

sales. Contrary to this trend, the de•

mand for Mercedes cars continued

For cyclical reasons, demand for

30 % to 34 %.

undiminished in 1983. However, 1982 commercial vehicles in South Africa

output and sales could not be

declined by 26 %. Our subsidiary

The company broke even on sal•

matched due to labor unrest in East

London. With 12,956 sales (last year

also felt the effects of this. Its sales fell es valued at the equivalent of DM 332

25 %, to 4,313 vehicles. We consolida• million (last year DM 327 million).

4,816), Mercedes cars remained mar• ted our leading position in the truck

class of over 5 tons GVW with a

Since October, 1982, one model of market share of over 28 %.

Due to the dependence of the

Nigerian economy on the world crude

oil market, an appreciable improve•

ket leaders in their class.

Honda cars is being built under

license. In the first full year, 10,202

cars were manufactured. This broad•

ening of business, in a market seg-

Company sales revenue in D-mark ment of the market situation can not

yet be expected for 1984.

increased by 10 %, to DM 1.6 billion.

Overall results of operations were once

again satisfactory.

Subsidiaries and Affiliated Companies

NAI, Saudi Arabia

trucks and 8,600 diesel engines, using

two-shifts. In addition, about 400

O 309 busses will be built there. The

present OTOMARSAN production

facility in Istanbul is to be reorganized

and its annual production capacity

raised by up to 300 units, to 1,700

O 302 S busses.

In Saudi Arabia, diminished reven•

ues from the oil business also slowed

economic activity and with it commer•

cial vehicle sales. National Automobile

Industry Company Ltd. (NAI), Jidda,

had to cut assembly output back

to 5,192 commercial vehicles (last year

,834). Sales of imported, completely

IDEM, Iran

built-up vehicles also declined, while

market share remained steady.

Converted to D-marks, company

sales revenue fell to DM 511 million

Iran's economic situation further

improved in 1983. Business was par•

ticularly good for the licensees pro•

ducing Mercedes-Benz commercial

vehicles, resulting in turn in a substan•

tially larger demand for diesel en•

gines manufactured under license by

our affiliate Iranian Diesel Engine

Manufacturing Company (IDEM), Tab-

ris. Engine sales increased 56 %, to

(last year DM 817 million). Earnings

declined, but were still good.

Since Saudi Arabia's oil revenue

is hardly likely to increase to any

large extent at the present, a marked

recovery cannot be expected for 1984.

ln-house machine-tool manufacture at

Mercedes-Benz do Brazil: machine tools are

made here with Mercedes-Benz quality.

21,021 units (last year 13,499).

OTOMARSAN, Turkey

Sales revenue in local currency

rose 60 %, and in D-mark terms

increased to DM 294 million (last

year DM 183 million). For the first time

in years, therefore, the company had

a slight profit. The company is now

operating at the limit of its capacity.

A gradual adjustment of production

capacity to the long-term market trend,

which we expect to rise further, is

being considered.

The upswing of the Turkish eco•

nomy continued through 1983, though lion). Earnings were again quite

the ambitious export goals could not

be fully achieved. We expect the

Turkish economy to continue its

favorable trend.

satisfactory. At the beginning of 1983

the Turkish government approved the

broadening of OTOMARSAN's activi•

ties for the manufacture and sale of

Otobues ve Motorlu Araclar Sanayii trucks and engines.

A.S. (OTOMARSAN), Istanbul, almost

doubled its domestic bus sales. Ex•

ports, on the other hand, declined

considerably due to the Gulf War. In

keeping with available production

capacity, the 1,501 unit sales of mod•

els O 302, O 302 S and O 309 were

on the scale of 1982. The market

responded favorably to the inclusion

of model O 302 S in the production

program.

To realize the project, the number

of shareholders will be enlarged -

Daimler-Benz retaining its 36 % inter•

est - and the capital stock will be

increased in stages from previously

TL 550 million to TL 12,000 million

(approximately DM 100 million). The

company will take over existing facili•

ties of the AKMOSAN state company

in Aksaray, 220 km southeast of

Ankara, and begin vehicle and engine

assembly at the end of 1984.

German Motor, Star Motors and

Star Engines, Indonesia

The Indonesian economy has been

stagnating since 1982 owing to sharply

reduced exports of crude oil. In 1983,

the overall motor vehicle market de•

clined a further 20 %.

Sales in local currency rose 7 %

but, converted to D-marks, declined

to DM 261 million (last year 323 mil-

Planned capacity in the first phase

is 5,200 medium- and heavy-duty

Our Indonesian affiliates P.T. Ger•

man Motor Manufacturing, Wanaher-

Subsidiaries and Affiliated Companies

ang (assembly and manufacture),

of DM 14.2 million, Daimler-Benz holds FAP FAMOS, Yugoslavia

and PT. Star Motors Indonesia, Jakar• 60 %. It is planned to take up assem•

ta (import and marketing) suffered a

drop in commercial vehicle sales by

bly of engines in the 62 to 125 kw

range (85 to 170 hp) in the spring of

1985. At present, new plant facilities

are being set up on property imme•

diately adjacent to the site of German difficulties in providing foreign ex•

Motor Manufacturing in Wanaherang. change. Our joint venture partner

The measures taken to stabilize

the Yugoslavian economy more and

more affected the industry's materials

supply, particularly as a result of the

24 % in all, to 1,991 units, but man•

aged to maintain their market share.

Car sales were raised to 632 units

(last year 598). Sales revenue -

converted - declined 32 %, to

DM 176 million. There was a slight

profit nonetheless.

We thus have created the essential

prerequisites for complying with the

Indonesian industrialization rules so

that we will be able to stay in this

important market with our commer•

cial vehicles also in the future.

FAP FAMOS, Belgrade, nonetheless

succeeded in nearly maintaining out•

put at 1982 levels. Output amounted

to 5,453 units as compared to 5,529

units the year before. Sales revenue

in local currency rose 20 % and,

converted to D-marks, amounted to

DM 567 million (last year DM 461 mil•

lion). Results of operations were again

good.

In September of 1983 we formed

PT. Star Engines Indonesia together

with our Indonesian partner. This

company's task will be the assembly

and, later, manufacture of diesel

engines for vans and medium-duty

trucks under a license granted by the

Indonesian government. Of the capital

stock amounting to the equivalent

The Wanaharang plant assembles

Mercedes-Benz models 200 and 280 E.

These cars have an enthusiastic and steady

clientele in Indonesia.

Daimler-Benz Austria

Daimler-Benz Oesterreich Ver-

triebssgesellschaft mbH, Salzburg,

coordinates our sales activities in

Austria. In addition, it took over the

sale of busses to end users. To better

serve this market, a used bus center

was opened in Linz in the autumn of

983.

Car sales in Austria rose 26 % in

983. Especially the rescission of the

tax measures, which had produced a

pent-up demand and which particular•

ly affected Mercedes cars, had a

favorable effect. Our deliveries to

Austria increased by 58 %, to 8,565

cars. Our share of the overall market

thus rose from 2.5 % to 3.2 %.

The market for commercial vehic•

les also picked up slightly. Our ship•

ments to Austria of 3,261 units surpas•

sed the previous year's total by 6 %.

Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen.

Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures.

It was omitted in the pdffile to improve the usability of the file size.

Notes to Financial

Statements

Daimler-BenzAG

BalanceSheet

Asset and Capital Structure

Assets

Moveable property with a useful

life of 4 years or more is depreciated

using the declining-balance method.

We change from the declining-

Fixed assets, with additions of

DM 2.8 billion in tangible fixed and

financial assets and DM 2.2 billion

depreciation rose by DM .6 billion, to

DM 6.0 billion. Their share of total

assets remained unchanged at 33 %.

The increase of DM 1.0 billion in

current assets, to DM 12.1 billion,

was largely attributable to receivables

Fixed Assets

Fixed assets (tangible fixed assets balance method to the straight-line

and financial assets) rose DM 389

million, to DM 4,871 million and are

accounted for by additions of

DM 2,517 million less depreciation

and disposals of DM 2,128 million. As depreciation amounts. Assets of small

in the previous year, fixed assets are

valued at acquisition or manufactur•

ing costs respectively, reduced by

method of calculating depreciation

when the equal distribution of the

remaining net book value over the

remaining useful life leads to higher

value are expensed in the year of

acquisition.

(+ DM .6 billion) and to other assets

(+ DM .4 billion); the funds which

Depreciation on 1983 additions,

became available through a DM .2 bil•

lion reduction in inventories are con•

trasted by an increase in cash and

temporary investments in securities

in like amount.

accumulated depreciation. The oppor• including transfers from construction

tunities for special tax deductible

accelerated depreciation were fully

utilized, mostly in connection with

Section 7d of the Income Tax Act and

Section 82d of the Income Tax Reg•

ulation (environmental protection,

and research and development invest•

ments), Section 14 of the Berlin Assist•

ance Act and Section 3 of the Border

Area Assistance Act. Investment tax

credits earned were used to reduce

the relevant acquisition costs. The

manufacturing costs of in-house-

produced fixed assets include direct

materials, direct labor and manu•

facturing overhead (exclusive of

depreciation and administrative

expenses).

in progress and advance payments

relating to property, plant and equip•

ment, and capitalized in prior years,

was as follows:

Stockholders' equity (capital stock,

unallocated retained earnings and

40 % of special equity reserves) rose

DM .5 billion to DM 5.2 billion, as a

result of the capital stock increase at

the end of 1983 and through alloca•

tion from net income for the year to

retained earnings. The ratio of stock•

holder's equity to total capitalization

remained unchanged at about 29 %.

Within liabilities, provisions rose

DM 1.3 billion, to DM 8.4 billion. They

thus reached about 46 % (last year

43 %) of total capitalization. Pension

provisions totalling DM 4.4 billion (last

year DM 3.6 billion) accounted for

more than half of all provisions.

Scheduled depreciation expense

was calculated generally using the

following useful lives: 17 to 25 years

for buildings, 10 to 17 years for site

improvements, 3 to 10 years for ma•

chinery and plant, 2 to 10 years for

factory and office equipment. Ma•

chinery used for multi-shift operations

was depreciated using corresponding•

ly lower useful lives.

Daimler-Benz has recorded lease•

hold rights in favor of third parties

who have erected factory and office

buildings for our plants and retail

branches on land owned by the

company. As of December 31,1983,

there were 14 (last year 12) leasing

agreements for buildings improve•

ments; payments for such leases

amounted to DM 15 million (last year

DM11 million).

Fixed Asset Coverage

The ratio of stockholders' equity to

fixed assets remained unchanged at

about 88 %. Fixed assets, inventories

and a substantial portion of other

current assets continue to be fi•

nanced on a long- and medium-term

basis.

Balance Sheet

Investments

ated companies rose DM 577 million, DM 2.9 million = .17 % of total com•

in Affiliated Companies

to DM 3,425 million. Of this increase,

alone DM 536 million applied to our

domestic and foreign affiliates,

that is DM 383 million to higher trade

receivables and DM 153 million to

higher notes receivable.

We have reduced the amount of

non-interest bearing receivables by

discounting them to maturity. In valu•

ing our receivables we have again

made allowance for all known risks.

mon stock), of which 4,805 shares

were purchased in 1982. The shares

were valued at DM 18 million.

The balance sheet amount of in•

vestments in affiliated companies rose

DM 196 million, to DM 978 million.

Additions for the year amounted to

DM 308 million, and related to capital

stock increases in domestic and for•

eign companies. Domestic companies

accounted for DM 45 million (mostly

at Porcher & Meffert), foreign compa•

nies for DM 263 million of the total

Other Assets

The increase of DM 445 million,

to DM 2,672 million, was mainly due

to investments of liquid funds in short-

and medium-term time deposits and

similar debt instruments. Moreover,

this balance sheet caption includes

interest receivables, claims for added

value tax refunds, receivables from

lessors and receivables from profit

and loss pooling agreements etc.

(largely at our European and South

African sales and manufacturing

companies).

Cash and Temporary Investments

in Securities

Our investments in affiliated com•

panies are valued in accordance with

the conservative principle of lower of

cost or market. Write-downs of

DM 109 million (of which DM 31 mil•

lion relate to additions in 1983) were

made mostly for our companies in

Italy and Spain, which were confron•

ted with generally difficult market

conditions.

Cash and temporary investments

in securities rose DM 225 million, to

DM 3,064 million, of which

DM 170 million were derived from the Stockholders' Equity and Liabilities

capital stock increase at the end of

1983. Other liquid funds were inves•

Capital Stock and Retained Earnings

ted in short- and medium-term debt

instruments, which represent by far

the single largest item in the balance

sheet caption "Other Assets".

Capital stock increased

DM 170 million, to DM 1,699 million at

the end of 1983, as a result of the

issuance of new shares out of "au•

thorized share capital". Accordingly, of

the DM 350 million authorized share

capital approved by the shareholders

on July 1,1981, there still remains a

balance of DM 180 million which may

be used through June 30,1986.

According to the information re•

ceived by us under Section 20,

Inventories

Treasury Stock

Of the DM 223 million inventory

decrease, to DM 2,898 million,

For the purpose of issuing shares

under the employee stock purchase

plan, a total of 53,150 shares (with a

par value of DM 2.7 million = .16 %

of total common stock) was pur•

chased during the year at an average

price of DM 461 a share, namely

DM 177 million was in finished goods.

The valuation methods remained un•

changed: raw materials and supplies

were valued at the lower of cost or

market. Finished goods were valued

including direct materials, direct labor

and manufacturing overhead. Rea•

sonable deductions were made for

obsolete items after longer storage

or after design changes.

Sub-Section 1 of the Company Act,

Deutsche Bank Aktiengesellschaft",

26,900 shares in January, 20,250

Frankfurt (Main), and "Mercedes-

Automobil-Holding Aktiengesellschaft",

Frankfurt (Main), each own more than

shares in March and 6,000 shares in

December.

In July, 77,137 shares (with a par

value of DM 3.9 million = .23 % of

total common stock) were sold to

our employees at a preferential pur•

chase price of DM 268 a share.

As of December 31,1983, we held

57,955 shares (with a par value of

25 % of our capital stock.

Retained earnings allocated

under statute increased DM 14 mil•

lion, of which DM 10 million was

allocated from net income for the

Receivables

Trade accounts receivable, notes

receivable and receivables from affili•

Balance Sheet

year and DM 4 million from the

the individual level premium method: Other Liabilities

premium received on fractional shares the interest assumption used in calcu•

The reduction in other liabilities by

DM 127 million, to DM 3,569 million,

was mainly the result of lower "other

liabilities" as opposed to higher "trade

payables".

sold on the open market in connec•

tion with the capital stock increase at

the end of 1983. In adjusting treasury

stock on hand to the balance sheet

lating pension obligations for our de•

fined benefit plan was 4.25 % in 1983

and 5 % the year before; the other

pension provisions have been calcu•

value, an amount of DM 5 million was lated on the basis of an interest rate

added to retained earnings allocated

for treasury stock. An amount of

DM 340 million was allocated from net

income to unallocated net income.

assumption of 3.5 % as heretofore. In

1983, and for the first time, we included Contingent Liabilities

pro rata administrative expenses in the

calculation. After receipt of DM 51 mil•

lion from Daimler-Benz AG, the

Discounted notes receivable total•

led DM 14 million. Pledges given for

domestic and foreign affiliated com•

panies amounted to DM 136 million.

Existing payment guarantees total•

led DM 42 million; they were given in

assets of the Daimler-Benz Provident

Fund amounted to DM 2.6 billion.

Special Equity Reserve

Of the special equity reserve total•

ling DM 296 million, DM 136 million

pertain to reserves allowed under

Section 3, Sub-Section 1 of the For•

Provision for Deferred Maintenance favor of creditors in connection with

the 1970-DM bond issue and the

982-lfr bond issue of Daimler-Benz

Holding S.A., Luxemburg.

The obligation arising from stock

subscriptions and contingent liabili•

ties of "Close Corporations" (Section

For maintenance planned in the

eign Investment Act (losses of foreign reporting year but not carried out,

subsidiaries), DM 114 million to

reserves allowed under Section I,

Sub-Section I of the Income

Tax Act for Developing Countries,

and DM 42 million pertain to reserves

allowed for price increases under Sec•

tion 74 of the Income Tax Regulations.

we have made a provision of

DM 125 million.

Other Provisions

4 of the GmbH Act), and guarantees

given by cooperatives owned by sub•

sidiaries, amount to DM 57 million.

We are jointly and severally liable

for two non-incorporated companies

which have profit and loss pooling

agreements with their parent

companies.

The other provisions, which rose

DM 533 million, to DM 3,891 million,

are primarily for our worldwide war•

ranty obligations and for legal and

litigation risks. Moreover, they cover

obligations in the social benefit area,

outstanding tax assessments and

possible losses inherent in pending

business transactions.

Lump-Sum Allowance for Doubtful

Accounts

The general credit risk at home

and abroad has been considered on

a country-specific scale of 4 % to

Under the assumption that the

proposed dividend is ratified by the

shareholders at the annual meeting,

the renumerations of the members of

the Board of Management amounted

0 %. On account of a more favorable

receivable structure overall, the lump•

sum allowance for doubtful accounts

declined slightly from DM 165 million

last year to DM 157 million this year.

Long-Term Liabilities

Long-term liabilities increased to

DM 140 million; new loans and loan

repayments amounted to DM 32 mil• to DM 6,898,117. Disbursements to

lion and DM 22 million respectively.

former members of the Board of

The new borrowings pertained almost Management or their survivors total•

exclusively to low- interest loans which led DM 3,836,495. Disbursements to

Provisions for Old-Age Pensions

Old-age pension provisions a-

mounted to DM 4,366 million (last year are available under the Berlin-Pro•

DM 3,633 million). Their actual cal•

motion Act. In 1984, planned repay•

culation was, as heretofore, based on ments will amount to DM 18 million.

members of the Supervisory Board

totalled DM 1,160,520 (including value-

added tax).

Statement of Income

Total Revenue

interest income from DM 610 million

last year to DM 535 million in 1983 was

caused by a drop in interest rates.

Taxes on Income and Property

The 2.3 % increase of total reve•

nue to DM 32.1 billion was the result of

a 3.4 % increase in sales and a reduc•

tion of vehicle inventories.

Taxes on income and property

declined by DM 147 million, to

DM 2,501 million. The previous year's

Income from Dissolution of Reserves amount of DM 2,648 million included

an extraordinary charge of DM 101 mil•

lion caused by an increase from

The DM 187 million total (last year

DM 207 million) included income from

the partial dissolution of litigation

reserves, which, on account of recent

court rulings with respect to the inval•

idity of the so called daily price

Cost of Materials

5.5 % to 6 % in the tax-allowable

Cost of raw materials and sup•

plies and of goods purchased for

resale, amounting to approximately

DM 16 billion, were on about the

same level as last year.

interest rate for the purpose of calcu•

lating pension provisions.

clause, were no longer required.

Other Expenses

This summary expense caption,

amounting to about DM 2.4 billion,

is nearly unchanged from last year.

It comprises predominately administra•

tive and selling expenses including

sales commissions, freight-out and

packaging, rental and lease expen•

ses, and additions to provisions which

by law must be classified here.

Other Income

Excess Income over Losses from

Affiliated Companies

Other income totalling DM 191 mil•

lion (last year DM 200 million) com•

prises profits from the sale of securi•

ties, recoveries for prior-year write-offs

of individual customer accounts, al•

Net income from affiliated compa•

nies was as follows:

983

1982

in millions

of DM

of DM location of administrative expenses

Dividends Received

FAP FAMOS, Belgrade

Mercedes-Benz (United

Kingdom) Ltd., Hayes

Otomarsan, Istanbul

and rental income.

Net Income and Unappropriated

Surplus

Personnel Expenses

Maschinenfabrik Esslingen AG,

Esslingen a.N.

With 2,200 more employees, "wa•

ges and salaries" and "social security

levies" rose to DM 8.5 billion (last

year DM 8.1 billion). The 3.2 % union-

negotiated increase at the beginning

of 1983 in wages and salaries was

also a contributing factor. Expenses

for "old age pension and support

payments" rose only slightly, to

DM 770 million (last year DM 742 mil•

lion), because the additional expense

resulting from the reduction during

the reporting year of the actuarial

interest assumption was about the

same as the previous year's addition•

al expense resulting from a similar

interest reduction plus the assump•

tion of additional pension obligations

by the DB-Provident Fund.

Net income for the year rose

DM 23 million, to DM 710 million.

According to our calculations, net

income for the year includes no

Mercedes-Versicherungsdienst

GmbH, Stuttgart

Other Companies

+47

Income Transferred from

"inflationary profits".

Affiliated Companies under

Profit Pooling Agreements

MTU Motoren- und Turbinen-Union

Muenchen GmbH, Muenchen

For the reporting year, net income

was reduced by DM 304 million, pur•

suant to Section 160, Sub-Section 2,

Clause 5 of the Company Act. This

was largely due to the reduction in

the interest rate assumption that was

used in calculating the amount of the

pension provisions pursuant to our

pension benefit rules.

Other Companies

+ 7

Losses Transferred from

Affiliated Companies under

Loss Pooling Agreements

—

— 1

+53

Excess Income

+60

Net Interest Income

Out of net income for the year, an

amount of DM 355 million was alloca•

ted to retained earnings; this left in the

Interest income and interest ex•

pense amounted to DM 586 million

last year DM 679 million) and

(

unappropriated surplus" account an

DM 51 million (last year DM 69 mil•

lion), respectively. The decline in net

amount of likewise DM 355 million for

the payment of dividends.

The annual financial statements as of December 31, 1983, show

an unappropriated surplus of DM 355,252,852.50.

It is proposed to the Annual Meeting of Stockholders that the

unappropriated surplus be applied as follows:

Stuttgart-Untertuerkheim, March 30, 1984

The Board of Management

Report of the Supervisory Board

In the Supervisory Board meet•

ings of the past year, in numerous

individual meetings, and by means of

written and verbal reports, we have

been informed in detail and have

consulted with the Board of Manage•

ment on the state of the corporation

Management regarding the applica•

tion of the unappropriated surplus.

At the rotational election of Super• for the future. With his kind manner,

visory Board members at the annual

his openness and modesty, Gerhard

shareholders' meeting on July 6, 1983, Prinz will not be forgotten. We all owe

times, in securing new growth. He has

given Daimler-Benz definite direction

Professor Dr. jur. Gunther Hartmann

voluntarily did not stand for re•

him our gratitude.

Effective December 1, 1983, the

and on principal matters of corporate election. He thus left the Supervisory

Supervisory Board of Daimler-Benz

policy. In particular, these discussions Board of which he had been a mem• AG appointed Prof. Dipl.-lng. Werner

centered on employment trends, re•

sults of operations and on medium-

and long-range corporate plans includ• for his bond of friendship, his judi•

ing capital spending policy. Further•

more, we discussed important busi•

ness transactions and made business

decisions which by law or bylaws

had to be submitted to us for approval.

ber since 1977. In this report we also

wish to express our special thanks

Breitschwerdt, Chairman of the Board

of Management.

Messrs. Hans Juergen Hinrichs

and Dr. rer. pol. Gerhard Liener,

heretofore deputy members of the

Board of Management, were appoint•

ed full members effective July 6,

1983, and March 14, 1984, respectively.

In the meeting of May 3, 1984,

cious advice and his trustworthy

cooperation.

Concurrent with the conclusion of

the annual stockholders' meeting on

July 6, 1983, Messrs. Karl Aspacher

and Erich Hirth, as representatives of

We have examined the financial

statements, the annual report, and

the recommendations for the pay•

our employees, retired from the Super• Dr.-lng. Rudolf Hoerning was appointed

visory Board to which they had be•

deputy member of the Board of

ment of dividends. The financial state• longed since 1975 and 1978 respec•

Management; he has taken over the

"Research and Development" division.

ments as of December 31, 1983, the

annual report and the accounting

principles used were verified by the

tively. We wish to thank both gentle•

men for their good cooperation. On

May 25, 1983, the employee nomina•

Deutsche Treuhand-Gesellschaft AG, ting meeting newly elected to the

Wirtschaftspruefungsgesellschaft,

Supervisory Board Messrs. Helmut

Frankfurt (Main), and have been found Funk, Stuttgart, Chairman of the Labor

to be in accordance with the books

and with the pertinent legal require•

ments. The Supervisory Board has

noted the result of the audit with

approval.

The result of the examinations

made by the Supervisory Board and

the auditors has shown no cause for

Council Untertuerkheim Plant and

Head Office, and Richard Helken,

Achim-Bierden, Chairman of the Labor

Council Bremen Plant.

Dr. jur. Gerhard Prinz, Chairman of

the Daimler-Benz Board of Manage•

ment, suddenly and unexpectedly

passed away on October 29, 1983,

Stuttgart-Untertuerkheim, May 1984

The Supervisory Board

question. The Supervisory Board has at the age of 55. He had been a

reviewed the consolidated financial

statements, the consolidated annual

report and the report of the auditors.

The financial statements of the cor•

poration as submitted by the Board

of Management are hereby ratified

and approved, and we concur with

member of the Management Board

since 1974 and in 1980 became its

chairman. With great managerial skill,

sense of responsibility and exem•

plary personal engagement he has

decisively contributed in strengthen•

ing the worldwide reputation of

the recommendations of the Board of Daimler-Benz and, during difficult

Chairman

Balance Sheet of Daimler-Benz AG

Statement of Income of Daimler-Benz AG

Annual Report

for the Group

Notes to Consolidated

Financial Statements

Notes to Consolidated Financial Statements

Companies Included in

Consolidation

Werkzeugbau (machine &toolmaking the basis of historical exchange rates

company) Zuffenhausen AG, Stutt•

gart, were merged, and the Woh-

nungsbau (residential construction

company) GmbH, Weinstrasse Met-

for fixed assets at the time of acquisi•

tion, and at year-end exchange rates

for current assets, liabilities and un•

appropriated surplus. Stockholders'

The consolidated financial state•

ments basically include all domestic

and foreign subsidiaries in which

Daimler-Benz AG (hereinafter refer•

red to as DBAG) has a direct or

indirect interest of more than 50 %.

The consolidated financial state•

ments, as submitted and including

DBAG, comprise 19 (last year 22)

domestic companies and 85 (last

year 83) foreign companies (see

page 88f).

tingen, Esslingen a. N., was combined equity in D-marks is the remaining dif•

with Maschinenfabrik (machine man• ference between translated assets less

ufacturing) Esslingen AG, Esslingen

a. N., through reorganization.

translated liabilities and less approp•

riated surplus.

Abroad, three retail companies

were merged with Mercedes-Benz

Belgium; a real estate company in

France ceased operations during the

year. The Chemie- und Textil-

As a result of foreign exchange

fluctuations between balance sheet

dates of individual local currencies

in relation to the D-mark, changes in

the D-mark net equity always occur

Gesellschaft mbH (chemical and tex• when its amount differs from the

tile company) was sold to MTU

amount of fixed assets translated

Motoren- und Turbinen-Union, Muen- at historical exchange rates.

As in previous years, we did not

consolidate certain foreign compa•

nies that had no or only negligible

chen GmbH and is thus no longer

business activities. These companies included in consolidation.

had no transactions which would

Because portions of current assets

are also financed with equity capital

at some foreign subsidiaries, they

produce negative translation differ•

ences - largely from the high devalua•

tions of the South American curren•

cies vis-a-vis the D-mark - and

have had a material effect on the

corporation's consolidated financial

statements. The following companies

which are providing old-age pension

benefits to our employees were not

included in consolidation as they are

not considered subsidiaries under

the law (Section 18, Sub-Section 1,

Clause 1 of the Company Act):

Principles of Consolidation

Classification and Valuation

positive translation differences from

revaluations, particularly of the U.S.

The individual domestic financial

statements included in the consolida• dollar vis-a-vis the D-mark. This left a

tion were classified in compliance

with the statutory requirements of the

substantial negative translation differ•

ence which was, as in prior years,

charged to profit and loss. This charge

thus neutralizes the high inflationary

Daimler-Benz Unterstuetzungskas- Company Act, and were certified by our

se GmbH, Stuttgart

outside auditors. As in prior years, the

individual foreign financial statements profits, notably those of our Brazilian

which were prepared and certified companies.

Revenues and expenses are trans•

Holzindustrie Bruchsal Unterstuet-

zungskasse GmbH, Bruchsal

in accordance with the laws of the

respective countries - have, for con•

solidation purposes, been reclassi•

fied to conform to the presentation

requirements of the Company Act,

and have been valued according to

methods uniformly applied to all con•

solidated companies.

Bruehler Unterstuetzungsgesell-

schaft mbH der Wuerttembergischen

Baumwoll-Spinnerei und -Weberei

bei Esslingen a. N., Esslingen a. N.

The companies included in consol•

idation were increased at home, by

one service company and abroad by

three retail companies and two real

estate companies. In Germany, the

Baumwoll-Spinnerei und -Weberei

lated at average annual exchange

rates. Excepted are depreciation char•

ges for fixed assets and gains and

losses from fixed asset disposals,

which are translated at historical rates.

The translation difference of balance

sheet and profit and loss items at

different rates was reflected in the

income statement. The uniform valua•

tion method used in consolidation

produces different results than those

shown in local currencies.

Currency Translation

(cotton spinning and weaving com•

pany) bei Esslingen am Neckar, Ess•

lingen a. N., and the Maschinen-

The accounts of foreign subsidi•

aries are translated into D-marks on

Consolidated Balance Sheet

Capital Consolidation

Asset and Capital Structure

account of the capital stock increase

at DBAG and the allocation to retain•

ed earnings from the consolidated

net income for the year. The ratio of

stockholders' equity to fixed assets

remained unchanged at 97 %.

Capital consolidation was effected

in accordance with the principle of

The 8.2 % increase in the Group's

total assets, to DM 24.8 billion, was

"First Consolidation" whereby the par• largely due to the 9.7 % increase in

ent's acquisition costs are eliminated

against the relevant share capital and the Group's assets and capital

retained earnings at acquisition. The

difference resulting from the elimina•

tion is shown in the balance sheet as

total assets of DBAG whose share in

Outside capital (liabilities and pro•

visions) amounted to DM 17.1 billion

amounted to about two-thirds as in

prior years.

(last year DM 16 billion). About 50 %

Fixed assets rose 11.7 % to

DM 7.7 billion; they now amount to

thereof pertains to provisions.

Cost of Investments in Consolidated

The "Statement of Changes in

Financial Position" of the Daimler-

Benz Group gives an overview of the

sources and application of funds.

Subsidiaries in Excess of or Below

Book Value at Acquisition".

31 % (last year 30 %) of total assets.

Stockholders' equity (capital

stock, allocated retained earnings,

Profits earned by foreign subsid•

iaries after date of acquisition plus the

unappropriated surplus for 1983 -

excluding minority interests - are ad•

ded to retained earnings. Thus, the

unappropriated surplus of DM 355

million in the consolidated financial

statements equals the unappropria•

ted surplus of DBAG.

minority interests and 40 % of special Capital investments during the report•

equity reserves) rose .8 %, to DM 7.5

billion. The ratio of stockholders' equity

to total capitalization increased

ing year could again be financed

internally, i. e. nearly exclusively from

depreciation, disposal of fixed assets

and increase of retained earnings.

slightly, to 30 % (last year 29 %), on

Other Eliminations

Intercompany receivables and

payables between subsidiary com•

panies have been eliminated; inter•

company profits in fixed assets and

inventories were likewise eliminated.

Write-downs for the decline in asset

values of subsidiaries and intercom•

pany valuation adjustments and pro•

visions have been eliminated in con•

solidation. These elimination measures

in 1983 have slightly decreased retain•

ed earnings.

The consolidated income state•

ments are presented on a fully conso•

lidated and detailed basis pursuant to

Section 332 of the Company Act; i. e.

intercompany sales and intercom•

pany earnings were eliminated against

the relevant cost of sales and ex•

penses, respectively.

Balance Sheet Structure - Daimler-Benz-Group

Notes to Consolidated Financial Statements

Assets

Inventories

The Group's inventories were re•

duced by 5.2 %, to DM 4,778 million

as compared to last year. This was

largely due to higher deliveries of

Stockholders' Equity and Liabilities

Capital Stock

Tangible Fixed Assets and

Intangible Assets

The capital stock in the consoli•

dated balance sheet is identical to the

capital stock of DBAG, and at

DM 1,699 million is DM 170 higher as

a result of the capital increase at the

end of 1983.

The increase in this balance sheet cars and commercial vehicles by

caption by DM 763 million, to

DBAG toward the end of 1983.

DM 7,199 million, resulted from addi•

tions of DM 3,464 million less de•

preciation and disposals totalling

DM 2,701 million. Capital investments

Receivables

Trade and notes receivables rose

in Germany amounted to 88 % of the DM 333 million, to DM 3,800 million.

Group's total (mostly at DBAG and at This increase was largely caused by

Mercedes-Benz-Leasing-GmbH), while an expansion in the leasing and

Paid-in-Surplus

Paid-in-surplus increased by

the share in the Group's depreciation financing activities of Mercedes-Benz DM 4 million, to DM 9 million.

amounted to 81.5 % for DBAG, 7 %

for Mercedes-Leasing GmbH and

Credit Corporation and by an im•

provement in the sales picture of

Freightliner.

This addition was due to capital con•

tributions in excess of par value in

connection with DBAG's 1983 capital

stock increase.

7.5 % for foreign manufacturing

companies.

Cash and Temporary Investments

Investments in Affiliated Companies in Securities

Cost of Investments in Consoli•

dated Subsidiaries Below Book

Value at Acquisition

The investments included in this

caption pertain to shares in compa•

The increase in this balance sheet

caption of DM 542 million, to

nies which are not included in consol• DM 5,161 million, occurred mostly at

This amount represents the differ•

ence between the cost of investments

in subsidiaries and their book value at

the time of acquisition. Offsetting the

debit amounts (cost in excess of

idation, in particular MTU Motoren-

und Turbinen-Union Muenchen

DBAG and the North American sub•

sidiaries. Further liquid funds were

GmbH, Allgemeine Verwaltungsgesell- invested in short- and medium-term

schaft fuer Industriebeteiligungen

mbH, Muenchen, and Mercedes-

Benz of South Africa.

debt instruments which, as in prior

years, are shown under "Other Assets"; book value) of DM 89 million (last

they represent by far the largest single year DM 119 million) against the credit

amounts (cost below book value) of

DM 92 million (last year DM 92 mil•

lion) resulted in a net credit of

item.

DM 3 million. The debit amounts

represented acquisition costs in

excess of book value. The credit

amounts arose largely with the pur•

chase of our South American sub•

sidiaries in the 1950's when portions

of the contractual capital stock in•

creases were paid for with tangible

fixed assets (particularly machinery

and equipment). The decrease in the

debit amounts, by DM 30 million, was

largely due to investment write-downs.

Notes to Consolidated Financial Statements

Retained Earnings

Lump Sum Allowance for Doubtful

Accounts

Finanz-Holding SA, Luxemburg

and to Mercedes-Benz France;

they amounted to DM 42 million and

DM 16 million, respectively.

The retained earnings of

DM 5,615 million (last year

DM 4,966 million) comprise retained

The lump-sum allowance for

doubtful accounts, amounting to

earnings of DBAG which were alloca• DM 192 million (last year DM 258 mil•

ted from net income, and from pro•

portionate retained earnings, unap•

lion), covers the general credit risks at Liabilities to Provident Funds

home and abroad, and is computed

propriated surplus and deficits earned at 3 % to 10 % of total receivables.

They pertain mostly to borrowings

by DBAG and by Daimler-Benz

Wohnungsbau GmbH from the

Daimler-Benz Provident Fund.

or incurred by subsidiaries subse•

quent to their acquisition. Moreover,

elimination amounts affecting income

are debited or credited here.

The percentages are different from

country to country.

Provisions

Other Liabilities

As compared to last year,

provisions rose DM 1,232 million to

9,546 million. Of this amount,

Short-term liabilities amounted

to DM 6,119 million (last year

DM 6,134 million). Liabilities to banks

pertain almost exclusively to our

foreign sales and finance companies.

Minority Interests in Subsidiaries

This balance sheet caption

comprises outside third-party interests DM 4,532 million pertains to pension

in the net equity and unappropriated

surplus and deficit of consolidated

companies. The increase in minority

interests by DM 17 million, to

provisions, of which about 96 % was

provided for by DBAG. The share of

DBAG in other provisions totalling

DM 4,879 million amounted to about

DM 76 million, originated mainly from 80 %. The reason for this large per•

the capital stock increases at

Mercedes-Benz Espana and at

Mercedes-Benz Credit Corporation.

centage is due to the fact that the

worldwide warranty obligations are

largely provided for by the parent

company. Moreover, this caption in•

cludes obligations in the social benefit

area, outstanding tax assessments

and possible losses inherent in

Contingent Liabilities

Apart from the obligations shown

for DBAG, there are no significant

contingent liabilities for companies

included in consolidation for obliga•

tions arising from stock subscriptions,

for liabilities arising from capital sub•

scriptions in "Close Corporations"

Special Equity Reserves

The special equity reserves, at

DM 364 million (last year DM 358 mil• pending business transactions.

lion), remained nearly unchanged.

Of this amount, DBAG accounted for

DM 296 million (last year DM 287 mil•

(Section 24 of the GmbH Act) and for

Long-Term Liabilities

guarantees of liabilities of coopera•

tives owned by consolidated compa•

nies. Payment guarantees for subsidi•

ary companies totalled DM 102 million.

One foreign subsidiary has given

customary payment guarantes within

the scope of its sales financing

activities.

lion), and Mercedes-Benz France ac•

counted for DM 61 million.

Long-term liabilities, at DM 775 mil•

lion, were DM 30 million lower than

last year. An increase at our foreign

manufacturing companies was offset

by a decrease at Mercedes-Benz

Credit Corporation; our North Ameri•

can finance company has partially

substituted some hitherto outside bor•

rowings for loans from affiliated

companies. The bonds shown under

this caption pertain to Daimler-Benz

Consolidated Statement of Income

Net Sales

For the first time, consolidated

sales exceeded DM 40 billion; see

details on page 9f.

Other Income

Consolidated Net Income

Other income declined DM 90

million, to DM 515 million. This cap•

tion includes profits from sale of

securities, credits from receivables

previously written off and lease and

rental income.

Consolidated net income rose

7.3 %, to DM 988 million. It is made

up as follows:

983

1982

Cost of Materials

The cost of raw materials and

supplies, and of goods purchased for

resale rose 1.2 %, to DM 20.3 billion.

Personnel Expenses

Personnel expenses (wages, sal•

aries, social levies, old-age pensions

ans support payments to depen•

dents) rose 2.3 %, to DM 10.1 billion.

This development was due to the

workforce reduction of 810 em•

ployees, to 184,877.

The expenditures for old-age pen•

sions and support payments to de•

pendents, amounting to DM 883 mil•

lion, were nearly unchanged from last

year (DM 878 million).

Net Interest Income

The Group had interest income

of DM 1,705 million (last year

DM 1,410 million), in contrast to inter•

est expense of DM 389 million (last

year DM 514 million), so that net

interest income for the year was

increased by DM 420 million to

DM 1,316. While net interest income

was DM 94 million lower in Germany

as a result of dropping interest rates

in money markets, an increase of

DM 514 million could be achieved

abroad. This large increase was

earned predominately by our South

American companies which invested

their liquid funds at inflation-caused

high interest rates. These interest

earnings thus reflect an inflationary

profit which is largely offset, however,

by charges in the income statements

of the negative exchange differences

resulting from the conversion of

individual foreign balance sheets;

these charges are reflected in "Other

Expenses".

Taxes on Income and Property

Taxes on income and property de•

clined DM 47 million, to DM 3,263 mil•

lion.

Other Expenses

Other expenses rose DM 475 mil•

lion, to DM 4,552 million. This caption

includes sales commissions (mostly

at DBAG) freight-out, packaging, addi•

tions to provisions, rental and lease

expenses and charges from currency

translations.

NotestoConsolidatedFinancialStatements

Foreign Companies

SOFIDEL SA, Rocquencourt, France

Companies included

in the consolidation

Mercedes-Benz do Brasil SA, Sao

Bernardo do Campo, Brazil

Mercedes-Benz France SA,

Rocquencourt, France

Domestic Companies

Sociedade Tecnica de Fundicoes

Gerais SA, Sao Paulo, Brazil

aswellastenretailcompanies

andsevenrealtycompanies

Daimler-Benz Aktiengesellschaft,

Stuttgart

Mercedes-Benz Argentina SA,

Buenos Aires, Argentina

Mercedes-Benz (United Kingdom) Ltd.,

Hayes, United Kingdom

Maschinenfabrik Esslingen AG,

Esslingen a.N.

as well as one financing company

and one realty company

as well as one realty company and

fourretailcompanies

Motoren- und Aggregatewartung

GmbH, Stuttgart

)

Daimler-Benz Holding Belgium SA/N.V,

Brussels, Belgium2)

Mercedes-Benz Espana SA,

Madrid, Spain

Porcher & Meffert GmbH, Stuttgart

Comercial Mercedes-Benz SA,

Madrid/Spain

Mercedes-Benz Belgium SA/N.V.,

Brussels, Belgium

Daimler-Benz-Wohnungsbau GmbH,

Stuttgart

aswellasfiveretailcompanies

Mercedes-Leasing-GmbH, Stuttgart

Daimler-Benz of North America

Holding Company, Inc., New York, U.SA

Mercedes-Benz Finance Belgium

SA/N.V., Brussels, Belgium5)

Daimler-Benz Project Consult GmbH,

Stuttgart

Freightliner Corporation,

Portland, U.SA

Mercedes-Benz Italia S. p. A.,

Rome, Italy

Holzindustrie Bruchsal GmbH, Bruchsal

ConsolidatedMetco, Inc.,

Portland, U.S.A.

Industrie- und Handelsbeteiligungen

GmbH, Stuttgart

Daimler-Benz (Australia) Pty. Ltd.,

Mulgrave, Australia

FreightlinerCanadaIndustriesLtd.,

Vancouver, Canada2)

Mercedes-EDV-Beratung GmbH,

Weinheim3)

Mercedes-Benz (Australia) Pty. Ltd.,

Mulgrave, Australia

Mercedes-Benz Truck Company,

Inc., Portland, U.S.A.

Industriehandel Handels- und

Industrieausruestungsgesellschaft mbH,

Stuttgart

YorkstarMotorsPty. Ltd.,

Sydney, Australia

RoseberyInvestmentsPty. Ltd.,

Sydney, Australia

Mercedes-Benz(Distribution)Pty.

as well as one service company,

onefinancecompanyandtworealty

companies

Hanomag-Henschel GmbH, Hannover

)

Rohtex Aktiengesellschaft fuer

Textilrohstoffe, Stuttgart

Euclid, Inc., Cleveland, U.S.A.

Ltd., Melbourne, Australia2)

EuclidCanadaLtd.,

Guelph, Canada

Daimler-Benz Grundstuecksgesellschaft

Hamburg mbH, Sitz Stuttgart

Mercedes-Benz Hellas SA,

Athens, Greece

as well as one retail company and

foursalescompanies

Daimler-Benz Grundstuecksgesellschaft

Bremen mbH, Sitz Stuttgart

Daimler-Benz Holding AG,

Zuerich, Switzerland

Mercedes-Banz of North America,

Inc., Montvale, U.S.A.

Autohaus Braun GmbH i. L, Nuernberg

Hans Braun GmbH, Nuernberg

Mercedes-Benz Nederland B. V.,

Utrecht, Netherlands

Mercedes-BenzCanada, Inc.,

Toronto, Canada

Mercedes-Versicherungsdienst GmbH,

Stuttgart

aswellasonerealtycompany

353 Sunset Boulevard, Inc.,

Mercedes-Benz (Schweiz) AG,

Zuerich, Switzerland

Daimler-Benz Services GmbH,

Stuttgart4)

Hollywood, U.S.A.

)

as well as one service company and

tworetailcompanies

as well as four finance companies

andtworealtycompanies

Mercedes-Benz Credit Corporation,

Norwalk, U.S.A.

AGAM Financiering B. V.,

Utrecht, Netherlands

) Some subsidiaries are included on the basis of

Group" statements.

)

Newly included in consolidation in 1983.

)

Formerly: Pro-Data EDV-Beratung GmbH, Weinheim.

Formerly: Reparaturwerk Boeblingen GmbH, Boeblingen.

Formerly: SA Fimarent, Brussels, Belgium.

as well as one finance company

andtwoservicecompanies

UBG-Beratungsgesellschaft mbH,

Graz, Austria

Comparison of Balance Sheets as of December 31,1983 and 1982

(in condensed form)

Consolidated Balance Sheet

Consolidated Statement of Income

The consolidated financial statements and the reports relating

thereto, which we have examined with due care, comply with the

statutory requirements.

Stuttgart-Untertuerkheim, March 30,1984

Frankfurt (Main), April 17,1984

Daimler-Benz Aktiengesellschaft

Board of Management

Deutsche Treuhand-Gesellschaft

Aktiengesellschaft

Wirtschaftspruefungsgesellschaft

Breitschwerdt

Hinrichs

Liener

Schnicke

Wirtschaftspruefer

Dr. Koschinsky

Wirtschaftspruefer

Niefer Reuter Ulsamer Gentz

(

independent auditors)

Appendix

Daimler-Benz Highlights

) Liability reserves of a long- and medium-term nature, long-term nature, long-term liabilities to banks and liabilities to Provident Funds.

) Exclusive of extraordinary expense for old-age pension in the amount of DM 1,408 million.

) Restructuring of old-age pension with tax-deductible extraordinary addition to pension reserves.

)

Excluding dissolution of provision in the amount of DM 391 million. This amount was previously set up for underfunding in the Provident Fund.

) Full dividend entitlement of new shares from capital increase out of retained earnings (1 for 4).

) 50% dividend entitlement of the new common shares as a result of the capital increase in December (1 for 7 issued at par).

) Dividend and bonus.

) Full dividend entitlement of the new common shares as a result of the capital increase in December (1 for 8 issued at par).

) Full dividend entitlement of the new common shares as a result of the capital increase in December (1 for 9 issued at par).

) For our stockholders who are liable for income taxes in the Federal Republic of Germany.

1) Allowing for capital stock increase (dividend retroactively adjusted).

Sales and Production

*) Figures of Daimler-Benz are inclusive of Unimog vehicles and MB-trac.

Car production Trends of Leading Countries 1963-1983

Car Industry of Leading Countries

100

Commercial Vehicle Production Trends of Leading Countries 1963-1983

101

Commercial Vehicle Industry of Leading Countries

102

Truck Production Trends of Leading Countries 1973-1983

(over 6 tons gross vehicle weight)

0 3

Truck Industry of Leading Countries

(

over 6 tons gross vehicle w eight)

) Some figures are estimated.

) 7 tons and above.

) 6,35 tons and above (factory sales).

Daimler-Benz

Aktiengesellschaft

Postfach 202

D-7000 Stuttgart 60

Fernsprecher (0711)17-0

Fernschreiber 72 524-0 db d