In 1979, Daimler-Benz continued the steady growth it has enjoyed for many years. We managed again to improve the market position at home and abroad for the range of vehicles offered under our "Mercedes-Benz" nameplate. Consolidated sales*) rose by more than 3.5 billion DM to 30.5 billion DM**).
In 1979, Daimler-Benz AG had total revenues- net sales including changes in inventories plus capitalized in-house fixed assets - of 23.7 (last year 20.6) billion DM. The net product of the Company - total revenue less cost of materials, expenditures for selling and administration, rents and leases, and depreciation charges - increased by 13% to 9.5 billion DM. The breakdown is shown on page 18. A total of 270 (last year 231) million DM of net income was allocated to retained earnings.
Changing Structure of the Automobile Industry
At the start of the eighties, the automobile industry is about to undergo a profound transformation because of changed economic and technical parameters. Most affected are the American auto companies, who until now - in contrast to European makers - have placed less emphasis on the fuel economy of their cars.
They must, therefore, change over their car lines to smaller models in a minimum of time and on an incomparably large scale. But European makers must also adapt themselves and their products to the changed conditions. The necessity to develop new cars and make extensive investments in new production facilities place utmost demands on the productive capacity and financial resources of all companies. Meeting these demands is all the more important as the auto industry, despite immense difficulties, must also act as a mainstay of world economic growth in the years to come, because a recession in this industry could not be offset by any other industry.
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The German automobile industry views fuel economy as an essential element of competition, and a large portion of its extensive investment programs is directed towards this goal. The seriousness of this effort can also be concluded from the voluntary pledge of all companies to the Federal Minister of Economic Affairs to reduce fuel consumption of their model lines by at least 10 to 12% by 1985. Since making that pledge, they have indicated the possibility of their achieving the promised reduction in consumption even earlier. Therefore, there is no need for imposing drastic measures in this area, which would, as the American example shows, overstrain the financial capabilities of even the largest and healthiest companies or weaken the international competitiveness of the German automobile industry. As the experience of 1973/74 and also 1979 has shown, free-market solutions in a system of competition among producers promote targeted goals more effectively than any government actions.
Daimler-Benz: Upward Trend also in 1980
During the first three months of 1980, Daimler-Benz sold 116,000 cars at home and abroad (+ 4%). Commercial vehicles rose by 12% to 51,000 units. To this must be added 1,200 Mercedes-Benz cross-country vehicles and 16,000 trucks and buses of our subsidiaries in Brazil and Argentina. During the same period, our worldwide sales increased by 12% to 7.5 billion DM.
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