Daimler Financial Services has claimed to have turned a corner this year, reversing its slow performance in 2009.
Earnings before interest and tax are expected to reach €900m for the year to 31 December 2010. Daimler’s finance and insurance arm achieved profit of just better than breakeven at €9m in 2009, due to increased expenses related to higher credit risk.
Klaus Entenmann, Daimler Financial Services (DFS) chairman, said: “We have emerged from the financial and economic crisis stronger than before, and we are benefiting from the decrease in risk-related costs and favourable interest margins. We are also on a growth path with our new business and contract volume.”
New leasing and sales finance business rose by 16 percent to €21.3bn for the nine months to 31 September 2010. Contract volume was up by 4 percent to €61.1bn.
DFS has indentified Asian markets, particularly in China and India, as targets for growth next year. Entenmann said: “We expect to see continued rapid growth in China, and we also appreciate the fact that Chinese customers are very reliable when it comes to making payments.”In China, the contract volume rose by 93 percent to €916m in the first nine months of 2010.
DFS will launch next year an Indian subsidiary offering financing, insurance and fleet management for Mercedes-Benz cars. In 2012, it will start offering the same services for commercial vehicles.
The latest announcement comes on the back of a restructuring process to improve coordination of DFS’ operations in 40 countries worldwide, with headquarters moving from Berlin to Stuttgart – in the same building as Mercedes-Benz Bank – and consolidation of Mercedes-Benz Bank activities from nine current locations to three in 2012.