Volkswagen AG’s latest offer for additional shares in MAN SE, which would give it effective operational control of the German truck and bus maker, has been rebuffed by MAN’s top management, on the grounds that the two offer prices (for ordinary and preference shares) do not ‘fairly reflect the value of MAN SE nor the synergy and profitability potential of closer co-operation between MAN SE, Scania AB, and Volkswagen AG’.
The tone of the statement suggests a degree of antagonism between the parties. But, in reality, VW has enjoyed a close level of co-operation with both MAN and Scania for more years than many financial analysts probably realise. In the case of Scania, which is already under effective VW control, the relationship with VW can be traced back some 63 years, to 1948, when the then Scania-Vabis became VW’s car importer for Sweden. Meanwhile MAN has, for well over 30 years, been party to numerous joint manufacturing and marketing ventures with VW, exploiting the fact that their respective middle/heavyweight and light commercial vehicle ranges neatly complemented each other.
With VW about to occupy the driving seat of both Scania and MAN, synergies look likely to be forced through, though initially involving only non marque-specific components, such as sheet metal, small parts and production line equipment.
In the mid-1970s, VW introduced its first up-to-3.5 tonne gvw van range, dubbed the LT, whose cab was shared by MAN’s equally new MT series of chassis-cabs, grossing 6 to 10 tonnes. The move took both companies into fresh weight categories where previously their joint German rival Mercedes-Benz had enjoyed an effective domestic monopoly.
As long ago as 2003, co-operation was mooted between MAN and Scania, irrespective of any VW involvement. It was at a time when Volvo‘s link-up with Renault Trucks brought new economies of scale and hence a competitive advantage for the two marques, enabling them to challenge market-leader Mercedes-Benz more closely in unit-cost terms. MAN and Scania felt the need for a similar boost in negotiating with suppliers. The initial proposal was for a driveline rationalisation in the heavy (16 tonnes plus) truck sector, where the Swedish and German companies competed in many markets.
Specifically, MAN heavies would use Scania (in-house manufactured) gearboxes, in place of those outsourced from ZF which, since the demise of Eaton‘s offering in Europe, had enjoyed a Tier 1 supply monopoly. Under the same co-operation plan, Scania trucks would have discarded its own drive axles, in favour of MAN’s HY series axles, incidentally based on Dana, formerly Eaton, designs from the US. But it didn’t happen. There were alleged ‘technical difficulties’, which was interpreted as meaning huge upheavals, no doubt with ZF at the forefront in pointing out such disruptions to MAN.
No one will use the word ‘merger’ and there will be no rush to share major components. Both brands are so highly respected by customers for their individual qualities… that any attempt at rationalisation would be regarded as madness by the vast majority of truck industry observers.
But now, with VW about to occupy the driving seat of both Scania and MAN, synergies look likely to be forced through, though initially involving only non marque-specific components, such as sheet metal, small parts and production line equipment. No one will use the word ‘merger’ and there will be no rush to share major components. Both brands are so highly respected by customers for their individual qualities, embodied most obviously in a) their engines and b) their cabs, that any attempt at rationalisation would be regarded as madness by the vast majority of truck industry observers.
If the global market shares of Scania and MAN are to be retained or expanded, it is to be hoped that today’s successful sharing of much vital content, including platforms and powertrains, between the group’s Audi, Seat, Skoda and VW passenger car brands, is not taken as a model for its future heavy truck operations.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Alan Bunting, with a background in engineering, has been writing on commercial vehicle and powertrain related topics since the 1960s. He has been an Automotive World contributor since 1996.
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