MAN Commercial Vehicles to beat cost cut target

(chinatrucks.com, September 25, 2009)MAN's  commercial vehicles business will exceed its 500 million euro ($736.4 million) cost savings target for this year "by a good 100 million", division chief Anton Weinmann said on Thursday.

He told a news conference that the question of whether MAN Commercial Vehicles would make an operating profit this year was extremely difficult.

"It will depend on the absolute sales volume in the second half and we cannot sufficiently forecast what this would be from today's perspective," Weinmann said.

Since a good third of the savings this year come from temporary labour-related measures that only affect this year, Weinmann wants to make them permanent in 2010 and 2011 in order to structurally reduce the group's breakeven point.

"We will do this without any forced redundancies," he explained, adding there were a range of measures to achieve this target that would be discussed with its labour leaders.

He said he had no indication that large shareholder Volkswagen (VOWG.DE) intended to integrate MAN as another brand.

"This is a decision for Volkswagen," Weinmann said, adding that its 30 percent shareholder has supported all of its strategic plans such as acquiring a 25 percent stake in China's largest heavy truck maker, Sinotruk. [ID:nLF410654]

"VW is our industrial partner," he said, indicating his positive stance towards any plans that VW and MAN Chairman Ferdinand Piech might be drafting to acquire MAN as the 11th brand in the VW empire. [ID:nLH9471] [ID:nLH458700]

Weinmann said his business would look to supply VW's former Brazilian heavy truck unit -- now a separate division called MAN Latin America -- with its own version of the D08 diesel engines to be manufactured in Brazil.

"In the medium term we want to develop joint platforms," the head of MAN Commercial Vehicles said.

Weinmann also said that after his division formed a joint venture in Uzbekistan to build as many as 1,000 trucks from pre-assembled kits called complete knockdowns (CKD), he was also considering joiining up with a local partner for CKD assembly in Russia as well to avoid heavy import tariffs.

He expressed his enthusiasm towards greater cooperation with VW's Scania (SCVb.ST) truck brand but declined to comment when asked whether the two truckmakers were actually holding talks.

Weinmann confirmed that he was in talks with German defence and automotive supplier Rheinmetall (RHMG.DE) over joint production of armoured trucks for military use.

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