MAN Truck Unit Seeks Ventures Rather Than Mergers

(Chinatrucks.com, September 28, 2009)MAN SE, Europe's third-largest truckmaker, is seeking manufacturing partnerships rather than mergers to respond to shrinking global markets, the chief executive officer of the commercial-vehicle division said.

MAN's strategy is to remain independent and confront the recession by cooperating with other truckmakers, Anton Weinmann said today in an interview in Munich. MAN is "absolutely open" to working more closely with Scania AB, he said, declining to say whether a further stake purchase is planned.

"We're experiencing an extreme collapse in the market, as well as an enormous collapse in prices, and that's pushing those in the sector to work together to restore volumes and develop common platforms and parts," Weinmann said. "We've never changed our being open to cooperation with Scania, but we've laid out our plans for MAN as a stand-alone company."

European heavy-truck registrations fell 57 percent last month, with Italy and Spain among the western markets posting the sharpest decline, propelling the eight-month drop to 48 percent, according to industry figures released today. Munich- based MAN is the second-biggest investor in Scania after a takeover battle three years ago left Volkswagen AG as the top shareholder in both commercial-vehicle makers.

"The worsening market situation would certainly be a reason to get on with brand consolidation," said Bjoern Voss, an analyst at M.M. Warburg in Hamburg.

Indian, Chinese Partnerships

Partnerships that MAN has reached in the past three years include an agreement in July to buy 25 percent of Sinotruk (Hong Kong) Ltd., China's biggest heavy-truck maker, as well as a venture with Force Motors Ltd. of India, in which MAN raised its stake in December 2008 to 50 percent from 30 percent.

The ventures abroad, in addition to helping MAN tap into rapidly expanding economies, will allow MAN to build on a cost- reduction program, Weinmann said. The truck division is already set to beat a 500 million-euro ($735 billion) savings goal for 2009 by 20 percent, he said at a news conference in Munich.

Early action on reducing on labor costs helped, with one- third of the savings coming from shortened workweeks and the remainder from not replacing people who leave, not renewing temporary contacts and scaling back some service purchases such as marketing, he said.

VW's Combination Efforts

Volkswagen, Europe's biggest carmaker, owns 29.9 percent of MAN and almost 71 percent of the voting rights at Soedertaelje, Sweden-based Scania following an effort in 2007 to combine its truck division with the commercial-vehicle manufacturers. MAN bought Volkswagen's truckmaking operations in Brazil, where it leads the market, last March.

VW may add two brands after completing the purchase of Porsche SE's sports-car business, Supervisory Board Chairman Ferdinand Piech said on Sept. 14. MAN has had no indications that Volkswagen plans to absorb it, Weinmann said today at the news conference.

"We view a strategic partnership with Scania extremely positively" with a potential to produce "higher synergies," Weinmann said.

Views:0

share: