The new emissions standards in Brazil will have a great impact over the German truck maker MAN SE profit, which expects a 15% fall in the first half, but has a backup plan.
Unfortunately truck operators have brought new vehicles before the stricter emission requirements became a law, downsizing demand. Operating margins expect a 8.5% drop, compared to 9.0% in 2011.
In Europe the emissions standards were adopted as Euro V from 2008, and Brazil is bringing the standards into the line this year.
“We expect the commercial vehicles market in Europe to stabilize around the 2011 level. In contrast, sales in Brazil will decline,” finance chief Frank Lutz said in a statement on Tuesday.
The local market in Brazil is expected to shrink by 10%-15%, while the revenue in the commercial business area by 5%.
MAN predicts a 7% fall this year, compared to 7.7% in 2011, but it plans to launch its own MAN brand in Brazil to benefit from the growing infrastructure spreading ahead of the 2014 World Cup and 2016 Olympic Games in Rio de Janeiro.
The company is on the top of the local market in Brazil after it bought the VW brand of heavy trucks in 2009 for $1.6 billion.