By Madeline Chambers
WOERTH, Germany, March 24 (Reuters) - The world's biggest truck maker, DaimlerChrysler , said on Monday that it was counting on new products and greater parts sharing to raise the division's profits this year in the face of stagnant demand.
The company said its new Actros heavy duty truck, which went into production at its Woerth plant in southern Germany on Monday, would help boost the unit's performance this year, even though the weak market conditions of 2002 were showing no sign of abating.
"The commercial vehicle sector simply cannot count on support from the international markets in 2003," said Eckhard Cordes, head of DaimlerChrysler's truck unit, reiterating comments made earlier this year.
Cordes, who expects the European market to be roughly flat this year, said he was unable to predict the effect the war in Iraq may have on business this year.
"I don't know. Anything I say would be speculation and we cannot say what the effect will be," he said at a press conference.
DaimlerChrysler, emerging from restructuring at several of its truck businesses, has said it aims to lift operating profit at its commercial vehicle arm this year from 2002's level of 176 million euros ($187 million) as it continues to cut costs. It expects revenue and unit sales to be roughly flat.
Few companies or analysts expect a swift recovery in demand for commercial vehicles, a sector whose health tends to reflect closely that of the wider economy.
DaimlerChrysler's biggest global rival, Volvo , said last month it saw no major recovery in North America in the first part of 2003 and that Europe was set to face a continued, though not dramatic, downturn.
PART SHARING
DaimlerChrysler, whose truck division includes Freightliner in the U.S., Setra buses and Mercedes Benz trucks and vans, said it aimed to sell about 24,000 of the new Actros trucks this year as well as some of the older version, bringing the total to around 40,000 -- about the same level as last year.
The commercial vehicle unit sold about 485,000 trucks, vans and buses last year, including 212,000 trucks.
Cordes also said he aimed to increase cost savings by greater part sharing between commercial vehicles.
"The primary goal is to standardize vehicles, components and parts to the greatest extent possible and deploy them on a global scale," said Cordes.
"In concrete terms, this means that we'll be focusing on synergies related to a heavy Freightliner truck and an Actros," he said. He cited as an example that Freightliner and Mercedes Benz would in future have a common electronic architecture.
Keeping a lid on spending by sharing high development costs has become a priority in the truck business, which has seen a flurry of consolidation and joint ventures in recent years.
The company is also extending its presence in the fast-growing market of Asia. It has spent 710 million euros on a 43 percent stake in the Fuso truck unit of its Japanese partner Mitsubishi Motors Corp .
It is also to pay around 400 million euros for a 50-percent stake in Hyundai Motor Corp's commercial vehicle arm.
DaimlerChrysler has ended talks with China's First Automotive Works on jointly making heavy-duty trucks, but has said it is in talks with other possible partners in China, a country it has targeted as one of the most important areas for expansion in commercial vehicles.
The Asian market currently accounts for nearly half of all global commercial vehicle sales, according to DaimlerChrysler, and is also the fastest growing market in the world.