MAN Makes Costs, Brazil Priorities, Not Scania Linkup

(chinatrucks.com, Mar.19,2010)MAN SE, the German truckmaker that failed to take over Scania AB in 2007, will focus on reducing labor costs and expanding in Brazil this year as a merger with the rival is unlikely, Chief Financial Officer Frank Lutz said.

"Our present top strategic priority is to develop MAN’s market position without Scania as there are no positive signs from Scania” about cooperation, Lutz said in a telephone interview. “Our readiness to cooperate with Scania still exists.” Volkswagen AG owns stakes in both manufacturers.

The recession led to a 55 percent drop in deliveries at Munich-based MAN last year and a 41 percent decline at Scania. Combining the manufacturers would create a company with revenue exceeding 18 billion euros ($24.8 billion), compared with Volvo AB’s 20.6 billion euros. Volkswagen Chairman Ferdinand Piech said this month that he expects the truckmakers’ cooperation to accelerate, possibly leading to parts and technology sharing.

"It’s beyond any doubt whatsoever that MAN and Scania could reap major synergies through joint purchasing and by pooling development costs,” said Tim Schuldt, an analyst at Equinet in Frankfurt with a “buy” recommendation on MAN. “They have no other choice but to carve out their own market position if Scania shuts the door on a tie-up.”

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