Annual Report 2010 - Knorr-Bremse AG.

MANAGEMENT REPORT
35
mass transit networks in São Paulo, Buenos Aires, and Rio
de Janeiro.
In the South American commercial vehicle sector, the market
environment is expected to remain stable compared to
2010. The construction activities triggered by major events
will have a supporting impact on the commercial vehicle
market, which will likely be influenced by advance purchases,
given that the introduction of EURO 5 emissions
standards is planned in 2012.
In Asia/Australia Knorr-Bremse expects to see the expansion
of the transportation infrastructure continue over the
next few years. It is anticipated that growing environmental
awareness, higher energy costs, and increasing levels of
gridlock on the roads will have a positive impact on the
development of rail transportation. The focus here will be
on the passenger sector, although the rail freight market
will also benefit from this development.
In 2011 Knorr-Bremse will continue to expand its activities
in the rail vehicle sector in the Asia/Australia region. The
high pace of growth in the region’s rail fleets will also create
potential new aftermarket business. At the Rail Vehicle
Systems division’s plants in China, measures will be taken
to increase capacities in order to meet existing orders and
future customer demand.
In the commercial vehicle sector the region is expected to
see a steady level of truck production for 2011 as a whole.
In the medium term, however, Knorr-Bremse is anticipating
renewed growth since China is driving forward its vehicle
exports, particularly to Africa and South America. The
commercial vehicle markets in India and Japan look set to
show a positive development.
Based on the regional backdrops set out above, Knorr-
Bremse expects to see the business develop positively in
2011. Progress will, however, be influenced by the risks described
above for the further growth of the global economy.
Presuming that the economy continues to pick up
speed, earnings are expected to remain stable. Based on
the assumptions made for the Group, the assets, financial
status, and profitability of Knorr-Bremse AG too can be expected
to remain stable, depending on income from the
company‘s investments.
In 2011 Knorr-Bremse will continue to pursue a policy
geared to safeguarding the company‘s long-term health
and in particular will be driving forward the steps already
introduced to expand its capacities in regions where demand
is growing. These include, for example, an intensive
marketing effort in Asia and the introduction of innovative
products, as well as the selective expansion of the company‘s
fields of activity.
Extending this outlook to 2012 is difficult on account of
market volatility and the risks described above. Knorr-
Bremse currently expects to see global economic growth
accompanied by an increase in transportation volumes.
Further factors with a positive influence on the development
of business for Knorr-Bremse will include the megatrends
of ongoing urbanization and the increasing importance
of energy-efficiency and safety. Consequently,
against the backdrop of the economic context described
above, a stable earnings position can be anticipated for
2012 as well.