Daimler-Benz to expand Asia market
By Johannes Simbolon
STUTTGART, Germany (JP): Germany's giant business group Daimler-Benz AG has plans to enlarge its market share in Southeast and Northeast Asia, despite the economic crises gripping both regions.
Company executive Dieter Zetsche said here Thursday that Daimler-Benz planned to increase revenues from the regions to between 20 percent and 25 percent of its total revenues within ten years. The two regions currently contribute 8 percent of total revenues.
"In view of the fact that the regions account for 30 percent of the world's gross national product, we are certainly heavily under-represented, with a mere 8 percent of our sales generated there at present.
"Any company should be engaged in the region if it wants to be global," Zetsche said at a media conference.
More than 100 reporters from all over the world were invited to the annual press conference.
Zetsche, who oversees Daimler-Benz Asian operations, said the plans to expand had been made before the economic crisis hit the region in the middle of last year.
The company was sticking to its original strategy and was optimistic the region would soon recover, he said.
"We estimate the region's economic growth next year will be 1.5 percent to 2 percent lower than the average 8 percent growth throughout the previous decade, but that is still higher than the over all global growth rate," he said, adding the crisis had inflicted only minor damage to the company's total revenues.
However, Zetsche believed regional recovery could be slow if crises in Japan and Indonesia persisted or further deteriorated.
Zetsche said Daimler-Benz currently held a strong position in Asia's luxury car, aerospace, and railway markets and hoped to maintain or strengthen these in the future.
The company intends to focus on expanding its currently negligible share of the Asian commercial vehicle market and thereby maintain its current position as the world's largest commercial vehicle supplier, Zetsche said.
"The (East Asian) region accounts for 50 percent of the world's commercial vehicle market in terms of volume. So, we have to lead in the region to maintain our position as the world's number one commercial vehicle supplier," Zetsche said.
Zetsche said Daimler-Benz had decided to set up five regional headquarters in the Asia-Pacific region -- in Singapore, Bangkok, Japan, Beijing and Melbourne -- to engineer the company's expansion in the region.
The company intends to localize products by developing appropriate models for the Asia-Pacific market and by setting up production plants in the region.
Daimler-Benz already has assembly plants in several Asian countries, including Indonesia.
The company subsidiary in Indonesia, PT German Motor Manufacturing, assembles C-Class, E-Class and S-Class passenger car models and the MB 800 truck.
Daimler-Benz, headquartered in Stuttgart, is most famous for Mercedes Benz luxury passenger cars. However, the company is also active in aerospace engineering through its subsidiary Daimler- Benz Aerospace (Dasa).
Dasa holds a 38 percent stake in the European Airbus Consortium, whose customers include 30 Asian airlines.
Dasa has won several contracts in Indonesia, including a US$16 million project to modernize 20 airports and a contract to map deforestation over 100,000 square kilometers of the country's rainforests.
Daimler-Benz has set up a joint venture with the Swiss company Asea Brown Bovery (ABB), called Adtranz, to produce railway systems, including electric and diesel-powered locomotives, high- speed intercity trains and light rail transit systems.
The company is also involved in telecommunications, insurance and financial services through its subsidiary Daimler-Benz InterServices AG (debis).
Another subsidiary, TEMIC, produces automotive electronics, engines, chassis, sensor systems and electric motors, while MTU Friedrichshafen is a subsidiary devoted to the production of diesel engines.