Daimler AG (stock-exchange symbol DAI) today presented its preliminary and unaudited results for the year 2010 for the Group and the divisions.

Daimler achieved Group EBIT (earnings before interest and taxes) of €7,274 million in 2010 (2009: minus €1,513 million), bringing the year to a very successful close.

“Daimler managed an excellent comeback last year,” stated Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, at the annual press conference in Stuttgart. “Our goal now is to maintain the level we have reached over the long term and to further improve it wherever possible. We have the right products, technologies and strategies to do so.”

Based on current estimates, Daimler expects EBIT from the ongoing business in 2011 to surpass the level of 2010 significantly.

Financial year 2010

After the prior year had been severely impacted by the financial and economic crisis, earnings in all divisions developed much more positively than had been anticipated at the beginning of 2010. This was due not only to the general market recovery, but in particular to the attractive product range as well as efficiency gains that were implemented. There was an opposing effect on EBIT from increased research and development expenditure.

Special items affecting earnings in the years 2009 and 2010 are listed in the table on page 11 and in the descriptions of the individual divisions.

The positive development of EBIT led to a significant improvement in net profit to €4,674 million in 2010 (2009: net loss of €2,644 million). Earnings per share improved accordingly to €4.28 (2009: loss per share of €2.63).

After Daimler decided not to pay a dividend last year, more than 40% of the Group’s net profit attributable to Daimler shareholders is now to be distributed. On this basis, the Board of Management and the Supervisory Board have decided to recommend to the shareholders for their approval at the Annual Meeting to be held on April 13, 2011 that a dividend of €1.85 per share be paid out. The total dividend payout will then amount to €1,971 million.

Daimler sold a total of 1.9 million vehicles in 2010. The level of the prior year, which had been very low due to the global economic and financial crisis, was thus surpassed by 22%. Group revenue increased by 24% to €97.8 billion; adjusted for exchange-rate effects, there was an increase of 19%.

The free cash flow of the industrial business increased by a significant €2.7 billion to €5.4 billion. Compared with the prior year, the net liquidity of the industrial business grew by €4.7 billion to €11.9 billion.

The size of the workforce increased slightly due to stronger demand. As of December 31, 2010, the Group employed 260,100 people worldwide (2009: 256,407). Of that total, 164,026 were employed in Germany (2009: 162,565). The number of apprentices was 8,841 (2009: 9,151).

In view of the Group’s positive economic development in the year 2010, Daimler’s Board of Management and General Employee Council have agreed that the special efforts made by the workforce in 2010 will be rewarded with a high performance participation bonus of €3,150 per entitled employee of Daimler AG. In the anniversary year of the invention of the automobile, each employee worldwide will also receive a special bonus of up to €1,000, depending on his or her length of time at the Group.

Investments to safeguard the future

Daimler increased its research and development expenditure last year to €4.8 billion (2009: €4.2 billion). Research and development spending totaled €3.1 billion at Mercedes-Benz Cars (2009: €2.7 billion) and €1.3 billion at Daimler Trucks (2009: €1.1 billion).

The main areas of research and development work were new, extremely fuel-efficient and environmentally friendly drive technologies. This included working on the optimization of conventional drive technologies and enhancing their efficiency through hybridization, as well as on electric vehicles with fuel-cell drive and battery power. Another focus was on new safety technologies.

Capital expenditure on property, plant and equipment amounted to €3.7 billion (2009: €2.4 billion). The focus was on investments in new vehicle models and new drive systems. €2.1 billion of the total volume of capital expenditure was in Germany.

The divisions in detail

Mercedes-Benz Cars, comprising the brands Mercedes-Benz, Maybach and smart, increased its unit sales by 17% to 1,276,800 vehicles last year (2009: 1,093,900). As the structure of unit sales shifted toward higher-value models, revenue increased at the significantly higher rate of 29% to €53.4 billion.

The division achieved EBIT of €4,656 million (2009: minus €500 million) and its return on sales was 8.7% (2009: minus 1.2%).

This excellent result is mainly a reflection of the high volume of unit sales following the decline in demand for cars in the previous year. Above all in the United States and China, the Mercedes-Benz Cars division was able to increase its unit sales significantly because of its attractive product range. Other factors with a positive impact on earnings were an advantageous product mix, improved pricing and increased efficiency. An additional positive effect came from lower charges from the compounding of non-current provisions (2010: €140 million; 2009: €657 million). Compared to the prior year, there was higher research and development expenditure.

Daimler Trucks increased its unit sales by 37% to 355,300 vehicles (2009: 259,300). Revenue increased by 31% to €24 billion.

The division’s EBIT amounted to €1,323 million (2009: minus €1,001 million) and its return on sales was 5.5% (2009: minus 5.5%).

This earnings improvement is primarily due to the good development of unit sales with contributions from all major markets (Europe, United States, Latin America and Japan). Earnings were boosted in 2010 also by cost-reducing actions, in particular from the repositioning of Daimler Trucks North America and Mitsubishi Fuso Truck and Bus Corporation, although the implementation of those programs still had a negative impact on earnings of €40 million in 2010 (2009: negative impact of €340 million).

In addition, EBIT for 2010 includes expenses relating to the reassessment of long-term warranty and service obligations as well as higher expenditure for research and development. There was an opposing, positive effect from income of €160 million recognized at Daimler Trucks North America in connection with the adjustment of health-care and pension plans. Lower charges from the compounding of non-current provisions also had a positive impact (2010: €58 million; 2009: €241 million).

Mercedes-Benz Vans sold 224,200 vehicles (2009: 165,600). Revenue of €7.8 billion was also a significant increase compared with the prior year (2009: €6.2 billion).

The division achieved a significant earnings improvement with EBIT of €451 million (2009: €26 million). Its return on sales of 5.8% was well above the prior-year figure of 0.4%.

The positive earnings trend resulted primarily from increased unit sales, especially in Western Europe, the United States and China, and also from better pricing. Charges from exchange-rate effects were more than offset by sustained efficiency improvements.

Daimler Buses posted unit sales of 39,100 complete buses and bus chassis (2009: 32,500). Revenue amounted to €4.6 billion (2009: €4.2 billion).

The division increased its EBIT to €215 million (2009: €183 million) and achieved a return on sales of 4.7% (2009: 4.3%).

This earnings development mainly reflects the substantial increase in deliveries of bus chassis in Latin America. There were opposing effects from lower unit sales of complete buses in Western Europe and North America.

Daimler Financial Services’ worldwide contract volume of €63.7 billion was 9% above the prior-year level. Adjusted for exchange-rate effects, it grew by 3%. New business increased compared with the prior year by 17% to €29.3 billion. Adjusted for exchange-rate effects, the increase was 11%.

This division also significantly improved its earnings to €831 million (2009: €9 million). Its return on equity was 16.1% (2009: 0.2%).

The increase in earnings after crisis year 2009 was mainly caused by lower expenses for risk provisions and higher interest margins. There were opposing, negative effects in 2010 from expenses of €82 million related to the restructuring of business operations in Germany. An additional factor was that the division disposed of non-automotive assets that were subject to leasing agreements, resulting in an expense of €9 million (2009: expense of €100 million).

The reconciliation of the divisions’ EBIT to Group EBIT reflects the proportionate share of the results of the equity-method investment in EADS, other corporate gains or losses, and the effects on earnings of eliminating intra-group transactions between the divisions.

Daimler’s proportionate share of the net loss of EADS amounted to an expense of €261 million (2009: income of €88 million). The sharp deterioration is mainly due to the additional provisions recognized at EADS in its 2009 consolidated financial statements in connection with the A400M military transport aircraft (minus €237 million). Negative exchange-rate effects were also a factor.

The income of €30 million recognized at corporate level in 2010 (2009: expense of €486 million) primarily reflects a gain of €265 million on the sale of Daimler’s 5.3% equity interest in Tata Motors and pre-tax income of €218 million related to the positive outcome of a legal dispute involving Daimler AG in October 2010. It also includes expenses totaling €125 million for the anniversary bonus and €88 million for the capital increase for the Daimler and Benz Foundation as well as additional expenses in connection with legal proceedings in 2010.

Outlook

According to current estimates, worldwide demand for motor vehicles will continue to grow this year, but no longer as dynamically as in 2010. The global car market could expand by 5 to 7%, thus reaching a new record volume. The Asian emerging markets and in particular the Chinese market will continue to play a major role. But the outlook remains mixed for the triad markets of Western Europe, the United States and Japan. The US market should continue its recovery, while the best that can be expected for car sales in Western Europe is that they remain at the prior-year level. In Germany, however, significant growth is now to be expected following the double-digit market decline in 2010. On the other hand, the Japanese car market is unlikely to equal its artificially high level of 2010, which was boosted by state incentives for car buyers.

Worldwide demand for commercial vehicles in 2011 will probably feature sharply differing market developments in the triad markets and in the other regions. Market recovery is expected to accelerate in the triad of Western Europe, the United States and Japan, especially in the segment of medium-duty and heavy-duty trucks. Market growth of 20 to 25% is anticipated for the NAFTA region. Demand for trucks in Europe should increase by 15 to 20%. Following the expiry of state incentive schemes in autumn 2010, moderate volume growth is expected for the Japanese market for medium and heavy-duty trucks. Demand for trucks outside the triad will be primarily determined by the Chinese market. Since the state incentive program expired in China at the end of 2010, demand is expected to decline this year.

In view of the continuation of generally good market prospects as well as numerous model changes and new products, Mercedes-Benz Cars anticipates further growth in unit sales by the Mercedes-Benz brand. Thanks to its up-to-date and competitive model range, the division will profit also in the year 2011 from the strong demand for the

E-Class models and from the market success of the S-Class. Another factor is that the new version of the CLS coupe has been delivered to customers since late January 2011. As of March, the new generation of the C-Class sedan and station wagon and the new SLK roadster will provide additional sales impetus. The C-Class coupe will follow in June, the new version of the M-Class will be launched in September, and the roadster version of the Mercedes-Benz SLS AMG will follow in the fourth quarter. In November, the new B-Class will be launched – the first model of four new vehicles in the compact-car segment.

Furthermore, the highly efficient four, six and eight-cylinder engines and the eco-start-stop technology will be introduced in additional models. With the new generation of the C-Class, for example, the C 220 CDI will be available with fuel consumption of just 4.4 liters per 100 kilometers and CO2 emissions of 117 g/km.

For the smart brand, due to the full availability of the new-generation smart fortwo, unit sales are anticipated in the magnitude of the year 2010.

Daimler Trucks assumes that it will increase its unit sales substantially again in 2011. Expectations for unit sales are based on the numerous new products, including the new Atego and the Atego BlueTec Hybrid, both of which were voted Truck of the Year 2011. The new version of the Axor is the first truck of its class in the upper performance range in Germany to be fitted with Mercedes PowerShift transmission as standard equipment. PowerShift optimizes fuel consumption and enhances driving comfort. BLUETEC technology, which has already proven its worth for several years in Europe, was successfully introduced in new engines in the United States and Canada in 2010. The division assumes that with these new engines, it will profit even more from the replacement of aging vehicles that is expected in North America. In November 2010, the all-new Canter light-duty truck was launched, setting new standards in terms of economy, environmental compatibility, safety and design. The Fuso Canter Eco Hybrid is Number 1 for fuel efficiency among trucks up to 5 tons in Japan, and is now available also in Australia, Ireland and Hong Kong.

The wide range of safety technology was expanded for Mercedes-Benz trucks with the second generation of Active Brake Assist, which can initiate an emergency braking procedure also before stationary obstacles if required.

At Mercedes-Benz Vans, the positive sales trend should continue this year. On the product side, demand will be boosted by new generations of the Vito and Viano and additional BlueEFFICIENCY models. Production in Argentina will change over by the end of the year 2011 to the current Sprinter model generation, thus significantly upgrading the product range in South American markets. Furthermore, the Sprinter will be launched in China this year. By means of local production, it is intended to significantly increase unit sales in that market with great potential for the future. In this context, the 50:50 joint venture Fujian Daimler Automotive will produce a bus version of the Sprinter in addition to the Vito and Viano starting in 2011.

Daimler Buses assumes it will maintain its globally leading position for buses above 8 tons with innovative and high-quality new products. The division expects to achieve unit sales similar to the high levels of 2010. But due to the limited scope for growth of its key markets of Western Europe and Latin America, any increase will be rather moderate.

Daimler Financial Services anticipates further growth in 2011 in the financing and leasing business as well as with insurance and fleet management. The division is continually expanding its product offering and combines individual financial services elements into attractive mobility solutions.

The bassumes that its total unit sales will rise and that revenue will grow at a more moderate rate in 2011. The growth will probably be driven by all the automotive divisions.

These growth opportunities are connected with challenges. The year 2011 will feature high expenditure for new products and technologies and to penetrate new markets. The revival of the world economy is likely to lead to rising prices for oil and other raw materials that are important for Daimler. On the exchange-rate side, volatility will remain high. However, the risks arising for Daimler’s business from severe fluctuations in exchange rates have already been largely hedged for 2011.

On the basis of current assessments, Daimler expects to post EBIT from the ongoing business in 2011 significantly in excess of the level of the year 2010.

In the coming years, the earnings of the individual divisions and thus of the entire Group are to be improved, and return targets are to be achieved on a sustainable basis. The Group intends to profit to an above-average extent from the anticipated growth of automotive markets.

As of the year 2013, Daimler aims to achieve on a sustained basis an annual average return on sales for its automotive business of 9% over market and product cycles. This is based on target returns on sales for the individual divisions of 10% for

Mercedes-Benz Cars, 8% for Daimler Trucks, 9% for Mercedes-Benz Vans and 6% for Daimler Buses. For the Daimler Financial Services division, the Group has set a target return on equity of 17%.

In the years 2011 and 2012, Daimler will spend a total of €20.4 billion on research and development activities (€10.3 billion) and investment in property, plant and equipment (€10.1 billion). This is approximately €5.3 billion more than in the years 2009 and 2010. Among other things, substantial amounts are planned for the expansion of production capacities in the United States, China, India and Hungary.

Against the backdrop of rising production volumes and the targeted productivity advances, Daimler assumes that the total number of persons employed by the Group will increase slightly in 2011.

Table: Earnings in both years were affected by special items, which are listed in the following table:

* Expenses relating to the EADS A400M military transport aircraft are not included in the calculation of EBIT from the ongoing business.

Russian Technologies, Daimler AG, the European Bank for Reconstruction and Development (EBRD), Troika Dialog, and Kamaz yesterday jointly announced the successful signing of a deal under which Russian Technologies, Daimler AG, and the EBRD each have increased equity stakes in the Russian heavy-truck manufacturer Kamaz. On February 11, 2010, the strategic partners had signed a memorandum of understanding (MoU) governing the increase of the equity stakes. Its implementation has now led to a further strengthening of the strategic partnership.

Under the terms of the deal, Russian state corporation Russian Technologies acquired a 12.12% stake in Kamaz. Russian Technologies’ share in Kamaz following the deal has increased to 49.9%.

Separately, Daimler AG, acting as a strategic partner, has acquired a 1% stake in Kamaz. The European Bank for Reconstruction and Development (EBRD), in close partnership with Daimler AG, has acquired a stake in Kamaz as a part of the long-term strategic plan agreed with the company’s main shareholders and management.

Sergey Chemezov, General Director at Russian Technologies, said: “This is a landmark deal for Russia’s auto industry: despite current market volatility, the signatories to the strategic partnership signed in December 2008 have agreed to increase their participation in Kamaz, bringing greater amounts of foreign expertise and investment to Russia’s auto industry and providing a timely example of the ongoing internationalization of Russia’s economy.”

Commenting the deal, Andreas Renschler, Daimler Board of Management member responsible for Daimler Trucks and Daimler Buses said: “This deal increasing Daimler’s stake in Kamaz indicates a broadening of our companies’ partnership, greater technological cooperation and a long-term commitment to collaboration. The Russian market remains one of the most promising strategic areas for Daimler and one where we anticipate significant growth over time.”

Alain Pilloux, the EBRD’s Managing Director for Industry, Commerce and Agribusiness, said: “This is an historic chance to show the investment community how one of the Russian industrial giants can partner with a strategic investor to modernise its products, compete internationally, save energy and promote environmental sustainability.”

Sergey Kogogin, General Director of Kamaz, added: “We readily welcome increased stakes of strategic shareholders like Russian Technologies and Daimler together with the EBRD. This kind of gradual, step-by-step attainment of a greater share in the company signals a sincere interest in long-term partnership, a commitment to increased transfer of technology, as well as the desire to develop business and pursue a broader range of joint projects. All of which bodes very well for the future evolution of our business.”

Ruben Vardanian, Chairman of the Board of Directors of Troika Dialog, said: “It’s very gratifying that Russian Technologies, Daimler and EBRD have evolved into such reliable, long-term partners for Kamaz. This deal is the logical progression of the strategic partnership agreed in December 2008, and the fact that the group of strategic partners has agreed to increase its participation demonstrates their strong belief in the Russian auto industry and its future prospects. Troika has been honoured to advise on each stage of this landmark process, and to remain as one of Kamaz’s shareholders in a broader shareholder structure following today’s transactions.”

Daimler AG sees further growth opportunities for Mercedes-Benz Cars in terms of unit sales, revenue and earnings in the coming years. Daimler has set itself the goal of delivering sustainable profits from operating activities at Mercedes-Benz Cars.

Meeting with investors and analysts in Beijing, Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, stated: “From today’s perspective, assuming there is no further downturn of the world economy, we expect Mercedes-Benz Cars to achieve its targeted return on sales of 10 percent in the second half of 2012 and to maintain it as of full-year 2013.”

The Chairman of the Board of Management sees the positive business development of Mercedes-Benz Cars in recent months as the result of the sustainable progress made with the “Gofor10” efficiency program, the strong product portfolio and the good momentum of the brand with the three-pointed star. Another factor is that Daimler did its strategic homework during the financial and economic crisis, laying the foundations for future success.

These efforts will also be reflected by the results of the second quarter of 2010. Zetsche: “From today’s perspective, we expect Mercedes-Benz Cars’ EBIT in the second quarter of this year to be higher than in the first quarter.” The division’s EBIT for the first quarter of 2010 amounted to €806 million.

In April 2010, Mercedes-Benz Cars already sold 12 percent more vehicles than in the same month of last year, and further substantial growth is also indicated for May and June. There are additional significant advantages in the second quarter from better pricing, a better product mix and the optimized cost structure. Return on sales in the second quarter could therefore also be higher than the first quarter’s seven percent. Mercedes-Benz Cars’ second-quarter production output of well over 300,000 vehicles will be close to the volumes achieved before the start of the financial and economic crisis.

According to Zetsche, the half-year results cannot be annualized for full-year 2010 because in the second half of this year, Mercedes-Benz Cars will spend more on CO2-related research and development and will have higher capital expenditure for new vehicle models, with a corresponding impact on earnings. “Nonetheless, I can say that Mercedes-Benz Cars’ EBIT for the year 2010 will be at the upper end of our forecast of €2.5 billion to €3 billion,” stated Zetsche in Beijing.

Zetsche believes China is increasingly becoming the center of gravity of the automotive industry. “China is becoming more and more important also for Daimler. This year, China has already become Mercedes-Benz Cars’ third-largest sales market after Germany and the United States.” The division anticipates sales of more than 100,000 vehicles in China this year (2009: 67,000). China is already the biggest market worldwide for the Mercedes-Benz S-Class and R-Class model series.

Due to the increasing importance of the Chinese market, Daimler has now for the first time organized a company event for investors and analysts in Beijing.

By the end of 2012 business activities in Germany by Daimler Financial Services AG and Mercedes-Benz Bank AG will be restructured. Headquarters of Daimler Financial Services will move from Berlin to Stuttgart and will be located along with the head office of Mercedes-Benz Bank. As a result, all central functions within the financial-services business for the German market as well as the global business will operate under one roof.

“With this strategic restructuring of Daimler Financial Services and Mercedes-Benz Bank in Germany we will achieve an important streamlining of our structures and processes and ensure a leading competitive position for our company in the long-term,” said Klaus Entenmann, Chairman of the Board of Management of Daimler Financial Services AG. The proximity to the Daimler Group’s headquarters is of strategic advantage to Daimler Financial Services. In addition, cost optimization in the amount of €50 million per year will be achieved in the mid-term.

Mercedes-Benz Bank, the German subsidiary company of Daimler Financial Services, will set up a new Service-Center by the end of 2012. In this location, operations for the automotive financial-services business will be consolidated which are currently located at eight business centers as well as in Mercedes-Benz Bank’s central office in Stuttgart.

The greater area of Berlin is the favorite location for the new Service-Center. “By concentrating our German locations we will bundle our know-how, simplify our processes and reduce our costs significantly. In addition we will extend service hours and improve availability for our dealers and customers,” said Peter Zieringer, Chairman of the Board of Management of Mercedes-Benz Bank AG. Processing of the direct banking business will continue to operate from Saarbrücken.

As a result of the concentration of locations the number of jobs at Daimler Financial Services and Mercedes-Benz Bank in Germany will decrease by 250 to 1.600 positions until the end of 2012. Daimler Financial Services and Mercedes-Benz Bank will offer fair conditions to all employees who are affected by the restructuring. To this end, negotiations will be started with the workers’ council.

After the consolidation of locations approximately 700 jobs will be located in Stuttgart. More than 550 jobs will be located at the new Service-Center in the greater area of Berlin. That is an increase of 150 jobs in that region. In a next step, the Service-Center will take over also European tasks. This will create approximately 150 additional jobs. As a result, Berlin will continue to be a major location for the financial-services division of Daimler in the future. 250 jobs will be located in Saarbrücken. A field force of about 100 consultants will continue to offer on-site support for dealers and customers across Germany. “With our decisions we are safeguarding sustainable jobs in Germany and ensuring a leading position for our company in the future,” said Entenmann.

Mercedes-Benz Bank gained market share last year despite facing a difficult economic situation. The Stuttgart-based automotive bank increased the financing and leasing contracts’ share of Daimler vehicle sales to private and commercial customers by six percentage points to 53 percent. The deposit volume in the direct banking business has more than doubled to €12.6 billion. Mercedes-Benz Bank gained 130,000 new customers, increasing its total number of customers by 12 percent to 1.2 million.

“We overcame the challenges of the most difficult year in our company’s history and made a substantial profit. We gained many new customers and retained our existing ones, thus further improving our competitive position. As a result, we are confident about this year as well,” said Peter Zieringer, CEO of Mercedes-Benz Bank, at a press conference in Stuttgart.

In spite of a decline in vehicle sales, the financial services provider brought almost as many cars and commercial vehicles onto the road with its leasing and financing deals last year as in the record year of 2008. At about 316,000 units, this figure was only three percent lower than in the previous year. The automotive bank even boosted its car business, increasing the number of its leased and financed Mercedes-Benz passenger vehicles by two percent, to about 258,000 units. “We successfully supported the automobile retailers and showed that we know how to support sales effectively,” said Zieringer. “Our business model has therefore proven to be robust even in difficult times.”

Mercedes-Benz Bank was also successful because it offered new all-in-one packages combining a leasing contract and motor insurance, all at a fixed monthly rate. The successful market launch of the new E-Class also had a positive effect, and Mercedes-Benz Bank supported the vehicle launch with a broad range of financing solutions and insurance offers.

Sales of commercial vehicles declined by 28 percent in Germany due to the recession and the associated steep drop in demand for transportation services. In view of this difficult situation, the number of commercial vehicles financed and leased through Mercedes-Benz Bank dropped by 22 percent to 59,000 units. The total volume of new business with passenger cars and commercial vehicles declined by ten percent, to €8.1 billion. As a result, the total contract volume decreased in 2009 by six percent compared to the previous year, to €16.1 billion.

Strategic groundwork for a successful future

The successful expansion of its deposit business to €12.6 billion enabled Mercedes-Benz Bank last year to lay the strategic groundwork for further strengthening its business model. Despite the widespread economic crisis, the automotive bank’s high level of liquidity means that it can buttress Daimler sales by providing affordable loans to Mercedes-Benz dealers and private and commercial customers. This opens up new business opportunities for the company in a time when many other banks are withdrawing from the automobile-related credit business. “Our consistent lending policy is allowing us to now advance into these gaps,” said Zieringer. Customer demand for reliable lenders has risen, “giving us the opportunity to permanently increase our market share without facing higher risks,” said Zieringer.

Besides successfully expanding its deposit business, Mercedes-Benz Bank further strengthened its international activities. Among other things, it established a branch in the UK in 2009 and took over the refinancing of the local dealership business of approximately €500 million. Together with the branch established in Spain in 2008, the branch in the UK opens up new growth opportunities outside of Germany.

Outlook

Mercedes-Benz Bank is prepared to once again contend with a challenging economic environment in 2010. However, due to its improved competitive situation and good liquidity, the company is optimistic about the coming months. It expects deposit volume in the direct banking business to remain stable this year. Mercedes-Benz Bank will do everything it can to retain its market shares in the leasing and financing business. The bank also aims to offer additional products and services to retain customers for the Mercedes-Benz brand that were won over in 2009. This year, the bank also expects to once again make a big contribution to the earnings of the parent company, Daimler Financial Services, and to further improve its profitability.

Daimler Financial Services AG and Allianz SE have concluded an agreement on their collaboration worldwide. Allianz thus becomes Daimler’s strategic partner for the international automotive insurance business.

In addition to existing collaborations in numerous markets in Eastern Europe and in Australia, Allianz will now also manage the automotive insurance business for Daimler vehicles in Italy. With this new agreement, Allianz becomes Daimler Financial Services’ preferred partner for automotive and warranty insurance whenever the latter calls for bids in its approximately 40 foreign markets.

The new agreement does not affect the existing cooperation agreement between Mercedes-Benz Bank and HDI Direkt Versicherungs AG concerning the automotive insurance business in Germany.

“Daimler has been working together with Allianz for more than 80 years now,” says Dr. Martin Schindewolf, CEO and Chairman of Daimler Insurance Services GmbH. “This agreement will allow us to further strengthen our partnership in the international automotive insurance business.” Daimler Financial Services is establishing strategic partnerships in order to further intensify its collaboration with selected insurance partners.

“We have concentrated our worldwide expertise in the Global Automotive business unit so that we can form real development partnerships with customers like Daimler Insurance Services,” says Karsten Crede, Board Member of Allianz Global Corporate & Specialty AG. “We will support Daimler’s commitment to premium quality and technological leadership by developing suitable insurance products in order to expand the brand experience of Daimler vehicles with an additional insurance-related element.”

Daimler Financial Services offers a range of automobile-related insurance products, including automotive insurance, gap insurance, payment protection insurance and extended warranty insurance, in more than 40 countries. The company’s Insurance Services unit also insures the Daimler production locations, transport and product liability risks worldwide and manages activities such as the pension plans and insurance of the Group’s employees in Germany.

smart USA Distributor LLC, a wholly-owned subsidiary of Penske Automotive Group, Inc. (NYSE:PAG), announces today the launch of its first national lease program through Daimler Financial Services (DCFS USA LLC).

“Our new lease program allows customers added flexibility with financing options and allows smart customers to enjoy leasing benefits such as low monthly payments, driving a new vehicle every two-to-three years and ease of vehicle turn-ins,” said Jill Lajdziak, President, smart USA. “Given our strong residual value performance we are in position to offer the consumer this financing alternative. This option allows consumers to have all the benefits of the smart product and excellent cost of ownership.”

The new lease program is available for all new smart models and will be offered in increments of 24, 36 and 48 months.

To support the launch of this new program, smart USA and Daimler Financial Services are combining on a special offer for qualified customers to get into a new 2009 smart fortwo pure coupe for $169* a month on a 36-month,10,000 miles-per-year lease.

“As the dedicated financial services partner we are offering a full menu of financial products designed specifically for the needs of smart drivers and the smart dealer network,” said Andreas Hinrichs, Vice President of Marketing, Daimler Financial Services. “By launching this competitive leasing program, we are able to expand our current retail financing options and provide customers with another avenue to get into this exciting vehicle.”

Since its introduction, nearly 40,000 smart fortwos have been sold. The smart fortwo offers the right balance of power, outstanding fuel efficiency, innovative safe features, environmentally friendliness and excellent value. There are 77 smart centers located in 36 states.

*Other rates/terms/tiers are available under this offer. Monthly payment is calculated using a base MSRP of $13,335 and does not include tax, license, title, registration, documentation fees, additional options, insurance or other dealer fees. Qualified customers must provide $999 down payment, $595 acquisition fee and first month’s payment at time of delivery. No security deposit required. Subject to credit approval; not all customers will qualify. Offer valid on all new 2009 models.

ABOUT the smart fortwo and smart USA

smart USA Distributor LLC, headquartered in Bloomfield Hills, Michigan, is the exclusive distributor of the smart fortwo in the United States and Puerto Rico and is a wholly owned subsidiary of Penske Automotive Group, Inc. The smart fortwo is a brand of and is manufactured by Daimler AG. This technologically advanced vehicle achieves 41 mpg on the highway and is an ultra-low emissions vehicle, as certified by the State of California Air Resources Board. The vehicle is 8.8 feet long, 5.1 feet tall and 5.1 feet wide and comes equipped with many functional and safety features found in most luxury models. smart is currently sold in 40 other countries, and more than one million smart fortwos have been sold since 1998. The 2009 smart fortwo is available in five trim levels ranging in price from $11,990* to $20,990*.

ABOUT PENSKE AUTOMOTIVE GROUP

Penske Automotive Group, Inc., (www.penskeautomotive.com) headquartered in Bloomfield Hills, Michigan, operates 310 retail automotive franchises, representing 40 different brands and 25 collision repair centers. Penske Automotive, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents, has 160 franchises in 17 states and Puerto Rico and 150 franchises located outside the United States, primarily in the United Kingdom.

Penske Automotive, through its wholly-owned subsidiary smart USA Distributor LLC (www.smartusa.com), is the exclusive distributor of the smart fortwo vehicle and related parts in the United States. smart USA supports 79 smart retail centers in the United States. Penske Automotive is a member of the Fortune 500 and Russell 1000 and has approximately 14,000 employees. smart and fortwo are registered trademarks of Daimler AG.

ABOUT DAIMLER FINANCIAL SERVICES (DCFS USA LLC)

Daimler Financial Services (DCFS USA LLC), headquartered in Farmington Hills, Mich., provides brand-specific financial services products for smart USA dealers and their customers. Daimler Financial Services also provides brand specific financial services for Mercedes-Benz automotive dealers’ inventories and their retail customers, and conducts business in the United States luxury car market as Mercedes-Benz Financial. In the U.S. trucking industry, Daimler Financial Services Americas conducts business as Daimler Truck Financial and finances Daimler Trucks North America commercial vehicles branded Freightliner and Western Star for dealers and their customers in the fleet, vocational, municipal and owner/operator segments. Daimler Financial Services (DCFS USA LLC) serves as the headquarters for operations in the United States, Canada, Mexico, Argentina and Brazil, and has approximately 1,600 employees. It is a company of the Daimler Financial Services Group, headquartered in Berlin, Germany, which operates in 40 countries with an employee base of close to 6,800. Daimler Financial Services is one of the leading financial services organizations worldwide.

Daimler Financial Services AG, headquartered in Berlin, is expanding its global presence to include the Middle East growth region. Toward this end, the company announced the official opening of Mercedes-Benz Finance Middle East and Mercedes-Benz Leasing Middle East on October 7, 2009 at a press conference in Abu Dhabi, United Arab Emirates.

Both new companies are part of a joint venture between Daimler Financial Services and the Al Fahim Group, owners of Emirates Motor Company, the authorized Mercedes-Benz distributor in the Abu Dhabi Emirate as well as Gargash Enterprises, the official distributor of Mercedes-Benz Cars in Dubai, Sharjah and the Northern Emirates.

The new companies are headquartered in Dubai and offer loans and leasing to private and business customers for new and pre-owned passenger cars and commercial vehicles, including a shari’a compliant Islamic finance product. This enables Mercedes-Benz dealers in the United Arab Emirates to now provide their customers with the complete range of financial services.

“Our presence in the United Arab Emirates is of high strategic importance for Daimler Financial Services,” said Daimler Financial Services CEO Juergen Walker at a press conference in Abu Dhabi. “It makes us the first automaker to have its own finance and leasing company in the United Arab Emirates. Once we have successfully established our business operations here, in the mid-term we will decide about offering financial services in other Middle Eastern markets as well.”

The United Arab Emirates represent the most important passenger car market in the region Middle East for Mercedes-Benz. In 2008, Mercedes-Benz sold 7,800 passenger cars and 3,100 commercial vehicles in Abu Dhabi, Dubai, Sharjah and the Northern Emirates.

Mr. Andreas Ernst, Managing Director of Mercedes-Benz Finance and Mercedes-Benz Leasing, said that the medium-term goal of the new companies was to achieve a contract volume of more than €300 million in the United Arab Emirates in three to five years: “To meet this target, we will be offering a comprehensive range of financial services from a single source to meet the needs of private or business customers. And we will support our dealerships with an electronic point-of-sale system that will result in faster loan decisions and a customer-friendly process.”

Mr. Rashed A. J. Al Fahim, Chairman of the Al Fahim Group, welcomed the formation of the joint venture and looked forward to a positive future: “We are confident and expect stronger Mercedes-Benz sales. The start of our jointly owned financial companies will further boost the attractiveness of the Mercedes-Benz brand in Abu Dhabi.”

Mr. Abdul Jabbar Gargash, Executive Director of Gargash Enterprises looked forward to the start of the new businesses: “For the first time, we can now provide our Mercedes-Benz customers in Dubai, Sharjah and the Northern Emirates with a broad range of financial services products that make owning a new or used Mercedes-Benz the easiest it has ever been.”

With its new financial services in the United Arab Emirates, Daimler Financial Services AG has further expanded its global presence. The Daimler Group’s international provider of financial services employs about 6,800 people and is represented in more than 40 countries. The company currently finances or leases one third of all vehicles produced by Daimler worldwide and manages a contract volume of €60 billion.

Emirates Motor Company

As the flagship company of the Al Fahim Group, Emirates Motor Company(EMC) symbolizes the phenomenal growth and success that the Group has achieved. As one of the Middle East’s leading distributors of Mercedes-Benz, EMC is synonymous with immaculate quality in true Mercedes-Benz tradition. EMC has been the general distributor for Mercedes-Benz in Abu Dhabi since 1962. From the beginning, dedicated customer service has played a major role in the company’s success. EMC is also the first Mercedes-Benz distributor in the Middle East to be awarded the ISO 9002 certification. EMC markets, distributes and services all Mercedes-Benz vehicles from luxury saloons to the largest trucks and provides qualified service with the constant availability of genuine parts. Operations in Abu Dhabi are carried out from purpose-built premises with a well-integrated network of showrooms, offices, parts depots and workshop.

Gargash Enterprises

Gargash Enterprises has been the authorized Mercedes-Benz distributor in Dubai since 1958 and understands the special requirements for operating in the U.A.E. Customers are guaranteed not just-premium-quality products, but also top-notch after sales services. The company employs over 1,000 staff members and has become one of the largest premium brands in the U.A.E. Gargash Enterprises is a full-service Mercedes-Benz operation with five dealerships across Dubai, Sharjah and Northern Emirates, all professionally managed to satisfy the needs of the consumer. Gargash Enterprises also delivers a car rental service through its SIXT, which operates from Dubai International Airport, Sharjah International Airport, and Ras AL Khaimah. Furthermore, through its Silver Star Rental division, established in 2006, Gargash Enterprises offers customers highly acclaimed Mercedes-Benz commercial vehicles on short and long term rental basis.