Daimler to split cars and trucks

Global manufacturing giant Daimler has announced a major restructure of its business, with the multinational transport heavyweight intending to split its car and van operations from its truck and bus division, with the latter to become a separately listed entity on the German stock exchange.

Daimler says the division will better allow each business to focus on the path to emission-free transport and become technology leaders in their respective fields.

The separate listing of Daimler Truck is expected to be completed by the end of 2021, after the approval of shareholders is gained in the third quarter of this year. Should the restructure go ahead as planned, Daimler shareholders will be given a significant majority stake in Daimler Truck.

Daimler also announced its intention to rename itself simply as 'Mercedes-Benz' at an appropriate time, providing further distinction between its car/van business and Daimler Truck, while its Daimler Mobility financial service teams would be redeployed to each of the two major company divisions.

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According to Ola Källenius, Chairman of the Board of Management of Daimler and Mercedes-Benz, the split will allow the firm to play to its strengths in each respective industry.

"This is a historic moment for Daimler," he said. "It represents the start of a profound reshaping of the company. Mercedes-Benz Cars & Vans and Daimler Trucks & Buses are different businesses with specific customer groups, technology paths and capital needs.

"Mercedes-Benz is the world's most valuable luxury car brand, offering the most desirable cars to discerning customers. Daimler Truck supplies industry leading transportation solutions and services to customers.

"Both companies operate in industries that are facing major technological and structural changes. Given this context, we believe they will be able to operate most effectively as independent entities, equipped with strong net liquidity and free from the constraints of a conglomerate structure."

Mr Källenius said the new structure would allow both arms to better embrace the rapid technological change to come.

"We have confidence in the financial and operational strength of our two vehicle divisions," he said. "And we are convinced that independent management and governance will allow them to operate even faster, invest more ambitiously, target growth and cooperation, and thus be significantly more agile and competitive."

Martin Daum, Member of the Board of Management of Daimler and Chairman of the Board of Management of Daimler Truck, said the change would only accelerate the truck and bus operation's aspirations.

"This is a pivotal moment for Daimler Truck," he said. "With independence comes greater opportunity, greater visibility and transparency. We will grow further and continue our leadership in alternative powertrains and automation. We have already defined the future of our business with battery-electric and fuel-cell trucks, as well as strong positions in autonomous driving. With targeted partnerships we will accelerate the development of key technologies to bring best-in-class products to our customers rapidly."

A complete separation of major divisions within the one transport conglomerate isn't unheard of: Volkswagen Group made a similar move in 2019 with an IPO for its TRATON Group, which represents Volkswagen Commercial Vehicles, Scania, MAN and, more recently, Navistar.

Daimler Truck, on the other hand, represents Mercedes-Benz, Freightliner, Fuso, Western Star, Setra and Thomas Built Buses. The group employs over 100,000 people and it delivered around 488,500 trucks and buses to customers in 2019, with combined revenues that year of 40.2 billion Euros for Daimler Trucks and 4.7 billion Euros for Daimler Buses.

In comparison, in 2019 TRATON Group sold around 242,00 vehicles, while Volvo Trucks accounted for around 233,000 vehicles.