Daimler Truck (DTG) to Leverage Brazil’s Rising Truck Rental House

Daimler Truck Holding AG (DE:DTG), the proprietor of the Mercedes-Benz model, goals to leverage Brazil’s rising truck rental house by launching its first truck leasing unit within the nation, Reuters reported. Brazil’s marketplace for new vans is beneath stress attributable to larger rates of interest, robust financing, and an unfavorable financial system.

Furthermore, Brazil’s authorities has employed stricter norms on air pollution emissions, resulting in larger automobile pricing. These components have pressured customers to lease vans fairly than purchase new ones.

Germany’s Daimler Truck Holding is a multinational auto producer of vans and buses. It additionally includes a financing arm. It owns and operates a number of fashionable manufacturers, resembling Bharat Benz, Freightliner, Mercedes-Benz, Setra, Thomas Constructed Buses, and Western Star. It was part of the previous Daimler AG however was spun off right into a separate unit in 2022 when the group rebranded to Mercedes Benz Group AG (DE:MBG).

Right here’s Why Truck Rental in Brazil is Profitable for DTG

Beginning a truck rental unit in Brazil is viable for Daimler Truck because it already operates a financial institution and an insurance coverage unit within the nation. Plus, it manufactures vans and buses in Brazil that compete with the native and worldwide gamers. Among the present gamers in Brazil’s truck rental market embody Vamos, Localiza Pesados, Volvo (GB:0MHW), and Traton Group’s (DE:8TRA) Scania and VWCO manufacturers.

DTG mentioned that it might begin the rental enterprise instantly by renting out 100 vans. Additional, it plans to have 200 vans in rental circulation by the top of 2024 and might want to make investments 200 million reais (about $40.18 million) into the enterprise.

Commenting on the enterprise prospects in Brazil, Cristina Rensi, director of recent enterprise at Daimler Vans, Brazil, famous that the rental truck and bus enterprise in Brazil had solely 2% of the fleet in circulation in 2023. As a proportion of recent vans registered within the nation, 10% have been used for the rental market final 12 months, and that is anticipated to shoot as much as 14% to fifteen% in 2024.

Is Daimler Truck Inventory a Purchase?

With seven Buys versus one Maintain advice, DTG inventory has a Sturdy Purchase consensus score on TipRanks. The Daimler Truck Holding AG share worth goal of €45.57 implies 33.7% upside potential from present ranges.

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