VW’s truck subsidiary MAN SE to seek further cost cutting image

The name of the game among Volkswagen Group’s affiliates lately seems to be “cost cutting,” with the latest being truck maker MAN SE – which announced it would seek to expand an already ongoing program.

Germany’s MAN SE will spread the cost cutting strategy from its core trucking business to all of its other divisions as the parent company has asked the truck maker to lift profitability. Volkswagen AG has been mulling for years the formation of a global trucking powerhouse – with the latest move in that direction being the appointment last month of ex-Daimler executive Andreas Renschler as the trucking business manager. His task is to corroborate Man with the other trucking subsidiary – Sweden’s Scania – and the namesake VW truck division to form a worldwide unit that would be able to take on global leaders Daimler and Volvo. “It’s indisputable that one needs to create and must create a truck alliance” commented MAN Chief Executive Georg Pachta-Reyhofen, with the truck maker announcing recently its trucking business posted a profit decline.

MAN’s truck and bus division, which makes up more than 50 percent of the overall sales of the company, said the operating profit nosedived 38 percent to 152 million euros ($162 million) in 2014 as the markets in Europe and emerging markets, such as Brazil, continued their slowdown. MAN’s newly announced cost reduction strategy will target new levels of savings through 2017 across the entire spectrum of the company’s business, including the diesel engine and turbine units. The plan should yield gains of at least 600 million euros during that period.

Via Reuters