In Q3, the Daimler Group EBIT is positive again, amounting to 0.5 billion Euro. Excluding special reporting items Daimler EBIT 0.4 billion Euros, I will go into detail in a few minutes.
Net profit of the Daimler Group also improved in the course of the year and reached 0.1 billion Euros in the third quarter. These figures prove that our crisis management has become effective and we are moving in the right direction in an environment where we had absolute know tailwind from the market. We consider this development encouraging but of course there is still some way to go.
Both weak cash flow and net liquidity of our industrial business confirmed the positive development. More details on these figures are illustrated on the next chart. Here, you can see the development of our net industrial liquidity since year end 2008. Net industrial liquidity continuously rose from 3.1 billion Euros to 6.7 billion Euros at the end of September. The free cash flow of the industrial business in the third quarter amounted to 2 billion Euro. The positive EBIT contributed to the further improvement of free cash flow. Cash flow was also affected by an increase in liabilities due to the higher production volume after the production break in August, as well as positive accounts management.
Furthermore the industrial free cash flow in Q3 was positively impacted by tax related items. In connection with certain automotive lease transactions the group allocated tax benefits to the financial services business in the past year. These tax benefits could now been finally realized. Based on the settlement with the IRS financial services has to repay this tax benefits to the industrial business of the group. This leads to a net increase of the industrial free cash flow by 0.6 billion Euro.
Due to higher payments to suppliers and the seasonal inventory increase at the end of the year we expect from today''s perspective a negative industrial free cash flow in the fourth quarter. For full year 2009, we anticipate the free cash flow to be positive.
Now, let''s take a closer look at the development of our individual divisions. In a year-over-year comparison the third quarter EBIT of Mercedes-Benz Cars rose from 112 million Euros last year when the crisis had just started to 355 million Euros this year. It has to be considered however that last year''s results included charges of 449 million Euros from the reassessment of leased vehicles residual values.
The picture gets more meaningful, when we look at the quarterly EBIT development. Then we can see the deep dive but also a strong improvement from Q1 to Q3, 2009. The drivers of this recovery are the consistent counter measures on the cost and revenue side initiated during the first half of the year and an improved sales structure. The measures designed to enhance efficiency and improved the cost position are increasingly showing effect, especially in the areas of production as well as sales and marketing.
In addition, reduced working time and labor costs positively impacted the operating results. And very important the launch of the new E-Class has supplied fresh impetus. Since March the E-Class sedan has been launched step-by-step in the various markets and the E-Class coupe followed in May. Together with the launch of the new-generation S-class this had a favorable effect on our model mix, which is illustrated on the next chart.
In third quarter of 2009, 28% of Mercedes-Benz Cars units sales were E and S-Class vehicles compared to 17% in the first quarter. And the new E-Class station wagon will follow in November.
The new generation S-Class and especially the S-400 hybrid are very well accepted. Approximately 20% of S-Class customers order the hybrid version. And while talking about product mix we should also look at the regional mix. Our business in China is developing very positively. China is already our most important S-Class market we are advised.
At the International Motor Show in Frankfurt in September we presented various product highlights. One of these was the new E-Class station wagon. From November, 2009, it will complement the E-Class family of Mercedes-Benz. The new E-Class station wagon marks the debut of a number of technical innovations which no other car in this category offers. The number one attraction at the Frankfurt Motor Show was new Mercedes-Benz SLS. By a wide margin the SLS was voted most popular among 27 new product presentations. The reinterpretation of the legendary Gullwing model will celebrate its market launch in spring 2010.
The pioneering role has also taken on the B-Class F-CELL, the world''s first fuel cell automobile manufactured under serious production conditions. Production of the B-Class F-CELL has already commenced with a small lot. The first batch of roughly 200 vehicles will be delivered to customers in Europe and in the United States next year.
Daimler Trucks suffered from the unprecedented market contraction which led to a substantial drop in sales and consequently reported EBIT of minus 127 million Euros in the third quarter. The huge market decline in the truck business occurred later than in the passenger car business but even stronger. This is reflected in the earnings development.
Furthermore, earnings of the last four quarters have been impacted by the repositioning of business operations in Asia and NAFTA. In the third quarter, we booked charges of 13 million Euros for the repositioning of Mitsubishi Fuso and on the other hand trucks NAFTA needs less provisions for achievement of its repositioning targets.
A very important factors that have been measured taken to reduce cost and the management of Zycus within our global excellence initiatives substantially mitigated the earnings decline. Our efforts to create highly flexible cost structures over recent years are clearly paying off positively.
And it seems that the very first signs of recovery can be recognized in the truck business. An obvious upward trend is illustrated if we look at the quarterly development of incoming orders on chart number 10, although, the orders are far from being satisfying in the long-term. Especially, in parts of Asia and Latin America but also the United States and some Western European countries incoming orders moved upwards during the past month.
The rise in the United States is also partially due to slight pull forward effect regarding from the EPA ''10 emissions regulations due to become effective on January 1, 2010.
In order to further strengthen Daimler Trucks position in the big markets, we have set up projects to establish two joint ventures with Russia''s bigger truck producer Kamaz in which we hold a 10% equity interest. The goal of our joint venture is the import production and distribution of Fuso trucks in Russia and the other joint venture is aimed at producing Mercedes-Benz trucks and distributing trucks and buses of the Mercedes-Benz and Setra brand in Russia.
At the end of 2007, Daimler started a commercial vehicle initiative called Shaping Future Transportation, which focus on both environmental aspects and safety. In September, we delivered the 10,000 Mercedes-Benz truck with Active Brake Assistance.
Mercedes-Benz continues to be the only manufacturer offering this emergency braking system. Daimler Trucks North America is participating in the clean cities program in the USA for the production and sale of more than 600 trucks equipped with hybrid and natural gas drive systems. The program includes the Freightliner business class hybrid electric and natural gas vehicles as well as chassis manufactured by Freightliner Chassis Corporation for hybrid, electric, hydraulic electric and natural gas powered [inaudible] in van
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