MAN benefits from credit turmoil

MAN, the German truckmaker, has become an unlikely beneficiary of the credit squeeze as for the first time the leasing rates it offers its truck customers are more attractive than those offered by big banks.

MAN has a leasing business worth €2.5bn ($3.7bn) and it provides a leasing agreement for just less than a quarter of its trucks.

“Our customers are coming more to us because our leasing rates are cheaper than the banks’,” said Karlheinz Hornung, chief financial officer. He called the subprime crisis “worse than in 1929. We are therefore holding more cash on our balance sheet because our customers could have difficulties to finance themselves.”

MAN is still expecting growth next year after record results due this year. Hakan Samuelsson, chief executive, said that like most German industrial groups, the company had felt little impact from the subprime mortgage crisis on its operating business.

The comments came as Mr Samuelsson urged politicians across Europe to allow longer trucks to enable truckmakers to cut carbon dioxide emissions.

“With longer trucks we can achieve a reduction of 20-30 per cent through just optimising things like roll and tyre resistance and improving engines. But without more storage space we can only get a maximum of 10 per cent reduction,” he said in a meeting with journalists late on Wednesday.

Trucks in most European countries are allowed to be up to 18.5 metres long but Mr Samuelsson called for an extension to 25m. He stressed though that it was more about increasing length than increasing weight. “It doesn’t have to be the 60 tonne gigaliners.”

Unlike carmakers that are under severe pressure from the European union on emissions, truck makers have so far escaped such public focus. But companies are aware they must act quickly and are keen for their emissions to be calculated differently from those of cars.

Mr Samuelsson said orders at MAN had risen 24 per cent in the first 11 months with revenues up 14 per cent – both slightly ahead of the nine-month level – on the back of booming demand for trucks in Eastern Europe.

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