Strong sales of Mercedes luxury cars in China and the United States helped German automaker Daimler AG post a stronger than expected 57% increase in fourth-quarter profits.
Bloomberg reported that the Stuttgart-based company, parent to Mercedes-Benz Sprinter and Freightliner, made net profit of $2.36 billion during the quarter. The company also recorded a record profit for the full year, up 29% from the year before, and increased its dividend.
But it issued a cautious outlook Thursday (Feb. 9), saying next year’s profits would only equal this year’s and that the debt crisis afflicting the 17-nation eurozone would mean a flat market in Western Europe.
In 2011 though, Daimler benefited from a strong sales performance of its Mercedes luxury brand, which saw sales jump in two key markets. They were up 42% in China and 44% in the United States. Operating earnings for the division, however, rose by a more modest 5%.
The division’s strong sales performance helped overall revenue rise 10% from the fourth quarter of 2010, coming in above forecasts.
Daimler’s Mercedes van business, including its Sprinter division, and its financial services division saw strong operating profit increases. The trucks unit, including Freightliner, expects sales to increase this year on growth in the U.S. and a recovery in Japan and is targeting an average return on sales of 8% across a business cycle starting in 2013.
Following is the latest in an occasional series published by the Miami Herald about the 78 million Americans born between 1946 and 1964.
David Roda, 48, rode his first minibike when he was 7 years old, courted his wife Laura on a Suzuki and now stores three motorcycles in his air-conditioned garage in Palmetto Bay.
Herb Jacobson, 55, saved his money and waited till his children were grown to fulfill a lifelong dream: owning a Corvette.
Laura Diaz, 58, bought a pop-up camper soon after she was widowed. Eight years and three recreational vehicles later, she tows a 30-foot Keystone Sprinter with her Chevrolet Suburban — often the only woman in a campground to do so.
Oh, how Baby Boomers love their wheels. Weaned on hot rods, raised with Mustangs and Camaros, inspired by the rebellious freedom of the counterculture film Easy Rider, they’ve had a lifelong affair with all things motorized. Whether it was the VW microbuses that symbolized 1960s hippie life or the Hummers that screamed excess at the turn of the century, what they drove defined who and where they were. Cars, motorcycles and recreational vehicles became more than transportation. They were fashion statements.
“For Boomers, a car wasn’t just a car,” says George Hoffer, a Virginia Commonwealth University economics professor and auto analyst. “It was freedom. It was mobility. It was the fun that came with being able to go.”
Everyone, regardless of age, remembers their first car, but Hoffer believes the Boomers’ ongoing “fixation” with their wheels is rooted in cheap gas, easy credit, the birth of the Interstate Highway System in 1956 and the growth of a suburban culture that required motorized transportation to get around.
For the parents of Boomers, most of whom who had suffered through the Great Depression and World War II, a car was something of a luxury. By the time the oldest Boomers posed for their driver license pictures, however, teenagers thought of a vehicle as a necessity. Desire varied a bit by geography. Miami, for instance, has always had more of a car culture than New York, with its mass transit.
“Boomers grew up with the expectation of mobility,” says Lance Wilson, executive director of the Florida Recreational Vehicle Trade Association. “They also were raised with more affluence.”
Michelle Krebs, a senior analyst for car buying guide Edmunds, says the life cycle of Boomers has influenced car trends for more than 40 years. In the 1960s, as leading-edge Boomers began driving, muscle cars — Ford Mustang, Chevrolet Camaro, Pontiac GTO — became popular. Then, 1970s gas lines opened the doors to gas-saving imports, which gave way to the yuppie Beemers and the Baby-on-Board minivans, not to mention the haul-it-all SUVs for the go-go years. Global warning, political correctness and a sobering recession ushered in the era of smaller cars and hybrids.
“They drove the market first by their sheer numbers and then because of their buying power,” Krebs says. “And that’s not going to change. We can expect them to continue doing that for a long time.”
Boomers are definitely in the driver’s seat:
- Four years ago, AAA published its first Easy Reading North American Road Atlas, which offers 40% larger type than standard atlases. It has been marketed to Boomers as “easier on the eyes for the generation known for its independence and wanderlust.”
- Baby Boomers account for more than half of all new vehicle purchases and make up almost 60 percent of all drivers, according to Scotia Economics, a research and policy development outfit.
- Motorcycle riders 45 and older made up 46% of all riders in 2008. Boomers outnumber Generation Y riders by a margin of 2 to 1.
- Aging Baby Boomers nearing retirement are fueling the increase in RV demand, industry experts say. Today one in 10 vehicle-owning households in the age group of 50 to 64 own at least one RV. The average age of an RV owner is 49.
Sheryl Connelly, a manager who researches future trends for Ford, says Boomers’ tastes are still very important to carmakers. A recent example? As cars began to downsize, they retained the luxuries of their larger brethren. “Small cars used to be starter boxes, but Boomers don’t want that. They don’t want the interiors to feel like a sacrifice.”
Nonetheless, a TrueCar study of car registrations showed that Boomers still enjoy a fast ride. They want to feel hip and young, even as they get old. Case in point: The top 10 vehicles with the highest percentage of baby boomer owners are all sports cars, from the No. 1 Mazda MX-5, with 61.3% of its owners qualifying as Boomers, to the 10th-place Porsche 911, with 54.6% of its owners falling into that generation.
“These are aspirational vehicles,” says Jesse Toprak, vice president of industry trends and insights for pricing site TrueCar.com . “I think they’re bought by people who are empty nesters and they’re getting it for themselves, not the family. It’s what they’ve always wanted.”
Jacobson of Coral Springs never stopped lusting for the curves of the Corvette. (More than 59% of Corvette owners are Boomers, placing it second on TrueCar’s list of boomer vehicles.) He fell in love with a buddy’s 1967 Corvelle in high school and never wavered in his desire.
“I always wanted one, but I didn’t think I would ever spend that much money on a car,” he admits. “Then the kids were gone and there was more disposable income. I figured it was time.”
He bought his first one in 2007, a convertible, then sold it to buy his 2010 Grand Sport. He keeps it waxed and spotless, driving it mainly on weekends. He also joined America’s Corvette Club. “I love it,” he says. “It still turns heads.”
There are as many different boomer-and-their-wheels love stories as there are motorized vehicles. For every Corvette owner, there are a thousand other Boomers who prefer a Ford F series truck, the No. 1 boomer car in volume sales, or the cushier ride of the Toyota Camry, another Boomer favorite.
But a few diehards have never lost their appetite for speed. Roda, CEO of Roda Asset Management, had always owned motorcycles, but when his children were born he sold his bikes and settled down with a series of sedate cars. Two years ago, after an exciting off-road motorcycle adventure with his brother in Colorado, he knew it was time to return to two wheels.
Last December he bought a BMW F800GS, then a BMW K-1300 GT and a Suzuki DRZ. He goes on short jaunts with the bikes in the city, but he rides off-road on the weekends, racing up steep paths and down rocky trails in Miami and other states.
“It’s the way I shut work off,” he says. “When I’m riding I’m not thinking of anything else but the road. It’s the adrenaline, the challenge. And it’s superbly fun.”
For Boomers, more so than for younger riders, motorcycles are a second set of wheels — a wistful concession to the cool teens they once were. Jessica Prokup, Motorcycle Industry Council spokeswoman, says many boomer bikers were young riders who, like Roda, gave up the hobby during their family years.
“There’s a huge empty nest factor,” she says. “Once the children are gone, they go back to doing what they love.”
Wilma Colby, 62, a Davie grandmother, rode a Kawasaki when she was in her 20s, then gave up the hobby to raise her children. After a divorce, she took up riding again and purchased a Harley 1200 Sportster in 1994. Now she owns a Harley Ultra Classic and rides with a group of women every weekend. To work, she drives the sporty convertible Mazda MX-5.
“I never stopped wanting to ride,” she says. “I never forgot the feeling of the wind in my face.”
Dealers love Boomers because they have disposable income. Ace Armstrong, general manager of the Harley-Davidson dealership in North Dade, says Boomers comprise 70% of the store’s customers — and they’re big spenders.
“They buy everything we have,” he says. “The motor clothes department is big business, and the chrome accessories do well, too. It’s all about building their own bike and creating the particular image they want.”
As they age, experts say Boomers’ transportation choices will force them to balance image with comfort, desire with reality. Those who once zoomed down the highway on fast bikes will want something easier on their backs. In the motorcycle world, three-wheelers are already catching on.
And in the camping world, those who once loved to sleep in the great outdoors may long for a comfy bed. They’re trading tents for a climate-controlled RV.
“Boomers want to experience the road with all the comforts of home,” says Dick Shaefer, owner of the website boomerrver.com. “They want to enjoy the experience of camping with their microwaves and their queen-size beds.”
A perfect example is Laura Diaz, who camped with her son throughout his Boy Scout career — until it got a little hard on her body. Now Diaz’s 30-foot Sprinter sleeps eight and has two slide-outs to make the living room bigger. It also has a 26-inch flat screen, a separate toilet area and a stand-up shower that was a big attraction for the retired police officer who has had two knee replacements.
“It’s like having a house on wheels,” says Diaz, who travels with Scott, 22, and niece Samantha, 17. “I’ve always loved camping, but I didn’t want to keep sleeping in a tent.”
Daimler Vans USA recently added a shuttle van to the imported Mercedes-Benz Sprinter van lineup that includes chassis for Class A, B and C motorhomes.
The 2010 Sprinter model lineup also includes a cargo van, passenger van and cab chassis – all of which are powered by a 188-hp 3.0-liter Mercedes-Benz diesel engine that utilizes Daimler AG’s BlueTEC technology to reduce emissions.
Claus Tritt, vice president of operations for Daimler Vans USA, introduced the new model at the company’s Ladson, S.C., factory in a press event attended by MotorHome staffer Patricia Marroquin.
Daimler is rebranding the Sprinter as a Mercedes-Benz product after cutting ties earlier this year with the Dodge division of Chrysler LLC. Sprinters also are sold through Freightliner Trucks North America LLC dealers.
Equipped with many Mercedes-Benz safety and convenience features, the Sprinter shuttle van can seat up to 16 passengers.
The low-floor shuttle van has four seating configurations based on use.
Tritt pointed out that the Sprinter has an interior height of 6 feet, 4 inches and a 54.6 degree turning radius — both of which he noted are ”best of class.”
He said the Sprinter combines Mercedes-Benz design themes with commercial vehicle characteristics. “We brought sexy back to the commercial vehicle market,” he said.
Tritt said that 13 American upfitters, including Winnebago Industries Inc., Forest River Inc., Airstream Inc., Four Winds International Corp., Monaco RV LLC and Fleetwood RV build motorhomes on Sprinter chassis with GVWRs ranging from 9,900 pound to 11,030 pounds.
Sprinters, sold in the U.S. since 2001, are available through 117 Sprinter dealers, and the network is growing, Tritt said.
Mercedes-Benz USA LLC announced today (Sept. 1) that it will assume responsibility for the sales, marketing, distribution and service of Mercedes-Benz and Freightliner Sprinter commercial vehicles in the United States.
Central to the announcement is the creation of Daimler Vans USA LLC — located in Montvale, N.J. — a wholly-owned subsidiary of Daimler AG. The Dodge Sprinter will be discontinued.
Daimler Vans USA LLC combines the brand awareness and technology leadership of Mercedes-Benz with the commercial vehicle expertise of Freightliner. The Mercedes-Benz Sprinter also marks the official return of the three-pointed star to the U.S. and Canadian light-duty commercial vehicle market. Delivery of the Mercedes-Benz Sprinter to dealers and customers will begin in January 2010.
Introduced in North America in 2001, the Mercedes-Benz Sprinter has developed a successful following with more than 130,000 Sprinter vehicles sold in the U.S. and Canada. The Sprinter in the U.S. and Canada is offered in three vehicle lengths on two wheelbases with three GVWRs (gross vehicle weight rating). With a line-up of cargo vans, passenger vans and chassis cab models, it also offers two roof heights. Powered by an efficient 3.0 V-6 turbo diesel engine, standard equipment includes ADAPTIVE ESP. ADAPTIVE ESP features additional sensors that take into consideration vehicle payload, further reducing the risk of skidding and loss of control.
“The Mercedes-Benz Sprinter and Freightliner Sprinter set standards in the sector for safety, customization and environmental responsibility and we are proud to offer this product in the U.S. market under the three-pointed-Star,” said Ernst Lieb, president and CEO of Mercedes-Benz USA.
The Sprinter has been on sale in the U.S. since 2001. Manufactured in Germany and assembled in Charleston, S.C., it has established a firm commercial customer base of small business owners, fleet managers and van buyers, looking for more than just a work vehicle — powered by clean and efficient turbo diesel engines.