FRANKFURT -- DaimlerChrysler said on Monday it would restructure its trucks business and save several hundred million euros a year by sharing major parts such as engines and transmissions across different models.
The world's biggest truckmaker, whose brands include Mercedes-Benz, Freightliner, Sterling and Western Star, said it would consolidate all of its truck development units under one management from January 2004.
"It is anticipated that the potential synergy will equate to around two thirds of the material costs of a truck," the company said in a statement. "This will be due largely to the standardization of major components."
A spokesman said DaimlerChrysler expected annual cost savings of several hundred million euros by the time the truck restructuring was complete in 2006 or 2007.
In February DaimlerChrysler said it would rely on cost savings this year to improve earnings at the division. The company anticipated flat sales and revenues while demand for trucks is slack in Europe and the United States amid an economic downturn.
Keeping a lid on costs by sharing high development costs has become popular in the truck industry, which has seen a flurry of consolidation and joint ventures in recent years, and the urgency of such moves has intensified amid current weak demand.
The DaimlerChrysler unit posted adjusted operating profit of 176 million euros ($201 million) in 2002 -- a rise from 2001 but fraction of the profit it made in 2000.
The company is struggling to reap the rewards of a global strategy that over the past five years has seen the merger of Daimler-Benz with Chrysler, and the acquisition of stakes in Japan's Mitsubishi Motors Corp. and South Korea's Hyundai Motor Corp.
The company is still battling to return Chrysler to sustained profits, however, and has warned the unit will post a one billion euro operating loss in the second quarter due to tough market conditions that torpedoed the group's full-year targets.
The trucks unit is in the midst of expanding its presence in Asia. It has agreed on joint ventures with the trucks businesses at Mitsubishi and Hyundai.