Issue: Sep 2006


Comment on MAN interest in Scania



by Zita Zigan

There has been ongoing speculation about the potential for MAN to make a strategic acquisition in order to address concerns about long-term prospects. MAN is not alone in this respect: the global truck industry is on a relentless path of legislation-driven engine improvements that comes with consistently high R&D cost. Those manufacturers with large
production volumes are best placed to address this challenge.

MAN’s principal problem in the past has thus been a lack of scale (resulting in high unit costs), which it has sought to address in various ways. These include a drive to branch out the production base to Eastern Europe and Asia, as well as collaboration agreements with other manufacturers: on engines, a deal was struck in the US with International; on axles and transmissions, MAN was to pursue a collaboration with Scania, with MAN supplying axles and Scania supplying transmissions. The Scania deal fell through earlier this year, however. MAN will make an announcement at the IAA show regarding its intentions towards Scania.

The two companies, the combination of which would create the largest grouping in Western Europe, leapfrogging both Volvo and DaimlerChrysler.

“On balance, the acquisition of Scania by MAN would make strategic sense for both companies, offering the economies of scale deemed necessary for long-term survival in the global truck industry.”

“It could open up new possibilities in Latin America and Asia for MAN and Scania, respectively, as well as creating potential for collaboration at Euro 6 in Europe.”

“As always, in such cases, there could be a risk of some joint market share erosion if the two companies were to merge operations.”

Zita Zigan, Head of Commercial Vehicle Forecasting at J.D. Power Automotive Forecasting.


Publishers note:

Volkswagen Rejects MAN Offer for Scania

Volkswagen Aktiengesellschaft has always stated that its investment in Scania is of a strategic nature and is in the industrial interests of the Group. Acceptance of today's takeover offer for Scania announced by MAN would not be in line with these industrial interests. For this reason, the Volkswagen Group rejects the offer and is not selling its shares in Scania.

Volkswagen holds 18.7% of the equity and 34.0 % of the voting rights in Scania.

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