Andreas Renschler’s truck empire before the IPO: How the truck business becomes Volkswagens Mustersparte

04/13/2018

Andreas Renschlers truck empire before the IPO How the truck business becomes Volkswagens Mustersparte

REUTERS

Andreas Renschler

So much is in motion in the Volkswagen Group. Several management posts, including the boss, are being retooled, the entire management structure changed, And truck board member Andreas Renschler? On the morning before the big decision in the supervisory board has time to expand his empire in Asia – by cooperating with a daughter of Toyota Show stock market chart sealed, one of the largest competitors of the parent company in the car business.

“I can do a lot of things here and build a global champion,” enthused Renschler in autumn in the interview with manager magazine. Does the head of the Volkswagen division Truck & Bus have reason to be serene? In fact, he could be one of the biggest winners of the corporate conversion.

With the integration of MAN and Scania, Renschler has already demonstrated how the targeted concentration of the numerous Group brands is grouped together. He has trimmed the temporarily difficult business to growth and yield and made it so ripe for the IPO expected in 2019, which is now being introduced as a consequence.

In the near future, the company will be transformed into a stock corporation, according to the resolution from Wolfsburg. “We are now ready to shift up a gear,” says Renschler.

MAN supplies almost half of the turnover in the truck division

A certain independence enjoyed the former manager of the truck world market leader Daimler Show stock market chart in this task already longer. For the location of the divisional company, it was possible to pilot it to Braunschweig instead of the desired destination in Frankfurt, in the interest of Volkswagen’s major shareholder, Lower Saxony. But now there is a move to Munich, where already the sub-company and formerly independent Dax member MAN sits – far away from the Wolfsburg headquarters.

At EUR 10 billion, MAN delivers almost half of Volkswagen Truck & Bus’s revenue, which rose to just under EUR 24 billion last year. Although the Munich group is still lagging a bit behind the Group’s 6.9 per cent operating profit, it has significantly increased its profitability – thanks in part to the increased cooperation with its former sister company Scania, for example the acquisition of Scania couplings.

Scania much more profitable

The Swedes, for their part, sell little more than MAN with 82,000 trucks and 8,000 buses a year, but achieve significantly higher sales and more than twice the profit of 1.3 billion euros. The long-established company Scania benefits from its specialization in more expensive heavy goods vehicles. According to Renschler, the insight into the advantage of the joint appearance on the world market now outweighs the pride in one’s own performance, which for years fed reservations about the integration with MAN.

Truck and bus sector in Brazil reduces loss

In addition to the two major truck and bus brands, which are mainly present in Europe, there is also Volkswagen Caminhões e Ônibus, the VW-branded trucks and buses from Brazil, which are marketed in MAN in some emerging markets. This sub-segment has shone last year with almost a third in sales growth, 21,000 trucks sold and 5,000 buses – but at an extremely low level, as the Brazilian market was deeply depressed in recent years and is only gradually recovering.

The result is still negative, but at least the loss in 2017 was almost halved. The market leadership in the crisis country is thus no longer such a burden on the stock market plans as before.

Rio as a digital platform of logistics

The fourth brand is new: Rio was founded last year under the aegis of MAN as a digital platform for logistics, with services networked via the cloud. This is the truck variant of networked mobility, which is also the key challenge of the future for the new CEO Herbert Diess. In autonomous driving, commercial vehicle manufacturers are already far ahead of the car loggers because robotic trucks have long been in the protected area of harbors or mines. They also experiment with electric drives.

MAN also owns the Power Engineering business segment with MAN Diesel & Turbo, which, for example, builds marine engines and gas turbines. Here, “the situation improved somewhat,” it says cautiously in the 2017 Annual Report – which still means red numbers, and uncertainty about how to integrate that stake into the stock market plans.

Road to global player – participation in Navistar, Hino partner in Japan

On the other hand, Renschler has systematically extended his antennae to the previous number 9 of the Truck World Ranking truly becoming a global player.

Since 2017, his company has been with one-sixth of Navistar involved, The US truck manufacturer, which also supplies one third of all school buses in North America, has an annual turnover of seven billion euros and nearly 70,000 vehicles sold. Last year, Navistar barely made it back to the black, but its core truck business still suffered a slight loss.

Strategically, however, it seemed the best opportunity not to leave the important market Daimler with their US subsidiary Freightliner. A cost-saving purchasing cooperation and the development of an electric truck were immediately launched.

In China, MAN already owns a quarter of the shares in the China National Heavy Duty Truck Group, which, with the Sinotruk brand, is in fourth place in the global sales ranking. Renschler wants to expand this presence in Asia.

With another Chinese vehicle manufacturer named JAC, the colleagues of the – still belonging to the core brand VW – light commercial vehicle division (Caddy, Transporter) also have an additional under Renschlers cooperation Cooperation closed,

Without equity participation, the partnership with Gaz in Russia has come down to date, from which Renschler also expects high sales potential in a rapidly growing market.

And now comes with Hino in Japan another partner added.

Although Daimler is still far away, but compared to the 32-billion-euro business of Volvo Show stock market chart, of which a good 20 billion euros from the truck division, can already be seen Volkswagens commercial vehicle subsidiary. Their operating return of 9.4 percent is also not far away.

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