DaimlerChrysler announced Friday that it is bringing all of its commercial vehicle components activities together under one business unit, named DaimlerChrysler Powersystems, as part of its continuing global strategy.

The unit will consolidate Mercedes-Benz, MTU and the recently acquired Detroit Diesel, as well as transmissions, axles and steering systems. With the recent takeover of DDC, DaimlerChrylser is the leader among producers of diesel engines for mid-sized and heavy-duty commercial vehicles, according to the company. The new Powersystems division is headed by the recently appointed Hans-Ulrich Maik.
DaimlerChrysler said it expects competition in the commercial vehicle sector to remain very intense, with strong market differentiation continuing in 2001. Eckhard Cordes, DaimlerChrysler board member responsible for commercial vehicles, foresees growth opportunities with vehicle-related services, which will transform commercial vehicles into a complete "system transport."
In addition to Detroit Diesel, DaimlerChrysler last year also acquired Western Star, and has a planned alliance with Caterpillar. In the past seven years, the company has more than doubled the sales of its commercial vehicles, and its goal is to increase sales to more than 600,000 units per year.
The acquisitions are part of a global commercial vehicle strategy aimed at reducing costs in development, production and marketing, according to the company. "Our international network makes it possible for us to take advantage of economies of scale through the global use of vehicle components," Cordes said. "At the same time, it also enables us to offer our customers tailor-made transport solutions."
Cordes says research and development costs for commercial engines can be reduced by approximately 50 percent per engine, by doubling the number of units produced. This translates into a 2 percent to 3 percent overall cost reduction per engine. "With the acquisition of DDC, we can now almost triple the unit production base for the heavy-duty segment," Cordes says.