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ManageMent report The performance of Mercedes passenger vehicles was well below the desired levels and was not successful in meeting its annual targets set at the commencement of the financial year. The high tariff regime continued to stifle the brand new passenger car market. High cost of financing and the conservative approach adopted by the providers of finance for vehicles during the early part of the year further affected passenger car sales. Motor car sales fell to almost a quarter of their previous numbers year-on -year. The RMV reported that 5,762 vehicles were sold between January and December 2009, compared with 20,237 vehicles sold during the corresponding period last year - a volume drop of 72%. The Company also experienced a significant shift in demand towards less expensive models. New Products The New E-Class was introduced in September. The launch was coupled with the Mercedes Benz Pageant. The model received a favourable response from the market, though price remains an obstacle to higher volume sales. Outlook We remain cautiously optimistic despite the year’s poor performance. Political stability and the end of the war are bound to have positive effects on commercial activity, driving economic growth and demand for our highlyvalued products. However, future performance in this segment remains heavily dependent on the tariff structure for luxury vehicles. Until this issue is addressed, growth will be restricted. However, there is growth potential in the tourism sector. Pre-Owned Vehicles Performance Review The main objective of this business is to open up cross-purchasing (trade-in) opportunities to drive the sale of new cars. Comprehensive refurbishment of the traded vehicles ensures a quality ownership experience, backed by a warranty and after-sales service. High prices in the year under review discouraged many Mercedes Benz owners from upgrading their vehicles, thus limiting the number of available vehicles for sale. Sales of pre-owned vehicles were also affected by expectations of a reduction in import duty on new cars. However, the last quarter saw a gradual improvement. 24 B u s i n e s s p e r F o r M a n C e Vehicles ANNUAL REPORT 2009/10 DIESEL & MOTOR ENGINEERING PLC Financial highlights 05 Operational highlights 06 Chairman & CEO's Review 10 Board of Directors 14 Group Management Committee 18
DIESEL & MOTOR ENGINEERING PLC ANNUAL REPORT 2009/10 Vehicles B u s i n e s s p e r F o r M a n C e ManageMent report Outlook The outlook for pre-owned car sales to a large extent will depend on the sales of brand new passenger vehicles, which in turn will depend on the tariff levels. Therefore, occurrence or non-occurrence of a favourable reduction in vehicle tariff will largely determine the performance of this Business unit. Passenger Vehicles: Chrysler and Jeep This Business too, was seriously affected by high duties and interest rates that prevailed. There was a drastic decline in purchases of brand new luxury petrol SUVs and sedans. For these reasons Chrysler and Jeep encountered severe competition from Japanese SUVs. Consequently, performance levels did not meet up to budgetary expectations. New Products Introduced The new Jeep Grand Cherokee Overlander 5.7-litre Hemi was launched in March. Events during the Year The restructure of Chrysler Group LLC took place during the year. This did not in anyway interrupt supply of spare parts or provision of after sales care. Outlook We expect an improvement, however, in the current year thanks to greater political stability, the end of the war and lower interest rates. Passenger Vehicles: TATA In common with the rest of the passenger car market, this business saw sales fall to around a quarter of their 2008/09 levels. The market became highly price-sensitive, a critical drawback for Dimo given our inability to offer a brand new car within the expected price range for this segment of passenger vehicles. New Products The year saw an upgrade in the product portfolio as the new Vista replaced the popular Indica Xeta model.The new Safari Dicor SUV was launched during the year. Events during the year Internationally, the new Tata Manza Luxury Sedan was launched by Tata Motors Ltd., although the bigger news was undoubtedly the launch in India of the long-awaited Nano. The Company has made plans to commence marketing this celebrated new automobile in the current financial year. Outlook Unless there is a favourable change in the tariff, growth in this sector will be minimal. Arrival of the 'Nano' from Tata is eagerly awaited, to boost the performance of this business unit. Business Performance 20 Financial Review 48 Sustainability Resides at Our Core 58 Economic Performance 70 Environmental Performance 74 25
Page 1: Annual Report 2009/10 DIESEL & MOTO
Page 4 and 5: Vision To be the leader in all the
Page 6 and 7: Contents Overview Financial Highlig
Page 8 and 9: oVerView operational hIGhLIGhTS Har
Page 10 and 11: oVerView CHairMan & Ceo’s REvIEW
Page 12 and 13: oVerView 12 C H a i r M a n & Ceo
Page 14 and 15: Overview Board of DIRECTORS ANNUAL
Page 16 and 17: Overview Group ManaGeMent COMMITTEE
Page 18 and 19: ManageMent report Business PERFORMA
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Page 28 and 29: ManageMent report We continue to ex
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Page 40 and 41: ManageMent report The Business unit
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goVernance report group STRUCTURE 1
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FINANCIAL CALENDAR Interim Financia
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annual RepoRt oF the boaRd oF diRec
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annual RepoRt oF the boaRd oF diRec
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statement oF diRectoRs’ RespoNsIb
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income stAteMeNts 136 Consolidated
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statements oF ChANGes IN eqUIty 138
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cash Flow statements Reconciliation
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notes to the Financial statements 3
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notes to the Financial statements T
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notes to the Financial statements A
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notes to the Financial statements N
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notes to the Financial statements T
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notes to the Financial statements F
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Share INFORMATION 1. Stock Exchange
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S h a r e I n f o r m aT I o n 9. T
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neTwork of BRANCHES, WORKSHOPS & SH
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h I STo r I c a l n oT e The key at
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k eY p r I n c I pa l S Principals
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co u n T rY r e p o rT Sectoral Com
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co u n T rY r e p o rT Expectation
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GloSSarY of FINANCIAL TERMS Account
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corporaTe INFORMATION Name of the C
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The creative approach we adopted fo
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f o r m o f p rox Y Instructions as
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directors - Colombo Stock Exchange

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