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Daimler Trucks US Full-year Sales Fall 30% As Independence Nears

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FreightWaves
·3 min read
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Soon-to-be-independent Daimler Trucks AG struggled to a loss-making 2020 as fourth-quarter revenue fell 6%. But the near future looks brighter as new truck orders surged triple digits in the quarter.

The unit of Daimler AG sold 8% fewer trucks in North America in Q4. Orders for new equipment surged 136%.

Overall, Daimler Trucks production fell 3% in the fourth quarter. Builds and retail sales both slid 27% for the year.

Adjusted earnings before interest and taxes (EBIT) rose 29% in Q4 to 575 million euros ($694 million) from 447 million euros ($540 million). For the year, the truck and bus group reported a 75% decline in adjusted EBIT to 678 million euros ($819 million) from 2.67 billion euros ($3.2 billion).

Full-year revenue was $34.7 billion euros ($41.9 billion), down 22% from 44.4 billion euros ($53.6 billion) in 2019.

Daimler AG breakup

Daimler AG said Feb. 3 that it plans to make Daimler Trucks a publicly traded stand-alone company by the end of the year if shareholders approve. Daimler has discussed splitting its truck and bus business from luxury carmaker Mercedes-Benz since 2014. It reorganized the business into a car and van unit and a truck and bus division in 2019.

"The intended separation of our industrial businesses is designed to unlock the full potential for Mercedes-Benz as the world's preeminent luxury car business and Daimler Truck as the world's largest truck and bus producer and technology leader," Ola Källenius, chairman of the board of management of Daimler AG and Mercedes-Benz AG, said in a press release.

Daimler intends to rename itself as Mercedes-Benz "at the appropriate time."

North America results

Q4 unit sales of 42,112 in North America were 8% below the 45,549 reported in the October-December period of 2019. For the full year, sales of 139,440 units trailed by 31% the 201,147 trucks sold in 2019.

In the U.S., Q4 sales of 36,531 trucks were 6% below the 38,914 sold in the same period a year ago. Full-year U.S. sales were 121,766 units, down 30% from 174,190 in all of 2019.

New truck orders in North America rose to 95,899 in Q4 from 40,616, a 136% improvement as freight rates spiked because of consumer goods orders to meet the needs of workers homebound because of the COVID-19 pandemic. Cash-flush fleets are booking replacement equipment and expanding capacity anticipating continued robust freight demand.

Full-year orders in the U.S., Canada and Mexico rose 54% to 187,504 from 121,708. In the U.S., fourth-quarter orders rose 129% to 84,896 from 37,089. For the full year, orders jumped 52% to 162,982 from 107,521.

Daimler Trucks North America (DTNA) announced this week that president and CEO Roger Nielsen would retire April 30. He led the North American business for four years. John O'Leary succeeds Nielsen. He has been leading the Mercedes-Benz truck business in Germany and was the longtime DTNA chief financial officer.

Related articles:

With Nielsen's retirement, Daimler Trucks North America gets new CEO

Daimler will create standalone truck business

Daimler forecasts strong Q4 results offsetting early 2020 setbacks

Click for more FreightWaves articles by Alan Adler.

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