MAN plans to slow investments this year and focus on reducing spending on parts, as the European crisis makes earnings fall faster than sales.
Chief Executive Officer Georg Pachta-Reyhofen said today, February 8th, that truck market in Europe will most likely remain ‘significantly below’ the recent peak of almost 400,000 vehicles sold in 2008. The company reported fourth-quarter operating profit down 23% to 308 million euro and revenue down 6.3%.
Management “is not satisfied with the results of the fiscal year and has therefore initiated appropriate improvement measures,” Pachta-Reyhofen said. “The focus will be on cutting costs and boosting efficiency,” as MAN expects “a slight decline in revenue and a disproportionately large drop in operating profit,” the company said.
During the third quarter the 17 nations sharing the euro went into recession and the sluggish demand has forced VW to scale back production, the same measure taken by Daimler and Volvo in order to avoid a build-up of inventory. As 2013 is not expected to bring a significant change, MAN relies on the upcoming domination by VW.
According to industry association ACEA demand for commercial vehicles in Europe dropped in December to the lowest level since October 2009 and new heavy truck sales fell 16% in France, 20% in Italy, 27% in Germany, 21% in the UK and 40% in Spain.