The Munich truck and bus manufacturer MAN remains the problem child Volkswagen-Commercial vehicle subsidiary Traton. “MAN is suffering from a particularly weak German market,” said Traton boss Christian Levin (57) on Monday. “MAN’s situation is challenging.” In the third quarter, the brand’s sales fell by 15 percent to 3.06 billion euros, and the operating return on sales fell to 5.6 (2023: 7.8) percent due to lower utilization. The MAN board is trying to counteract this by cutting costs, for example in the form of short-time work. “We decide on this from month to month,” said Levin.
Chief Financial Officer Michael Jackstein said that MAN’s return on sales this year might even be slightly below the 7.3 percent from last year. The fact that MAN is falling behind the competition in terms of sales is also due to the fact that the Munich-based company is sticking to Traton’s approach of keeping prices stable, said CEO Levin. “We are determined not to take part in any price war.” If sales levels remained constant, MAN would have significantly improved its margin. “You are doing a fantastic job,” said Levin, praising the MAN board of directors led by Alexander Vlaskamp (53).
Profit forecast confirmed
Confidence is growing for the group, however. CFO Jackstein reiterated the profit forecast: “Knowing that the final quarter will be very challenging due to the ongoing purchasing reluctance, especially in Europe, we want to continue to achieve the upper end of the range of an adjusted operating return of 8 to 9 percent.” Sales could be slightly below that Last year’s level, sales even slightly higher. Officially, there is a range of minus 5 to plus 10 percent for both indicators.
In the first nine months, Traton had already increased sales by 3 percent to 35.3 billion euros despite declining sales figures, although MAN, Scania, Volkswagen Truck & Bus and the US subsidiary Navistar, which was renamed International, sold 2 percent fewer commercial vehicles. The adjusted operating result (EBIT) improved by 11 percent to 3.26 billion euros, the operating return on sales was 9.3 (8.6) percent. This was due, among other things, to a race to catch up at Navistar, where a fire at a mirror supplier paralyzed production in the summer. In the third quarter, sales jumped by 20 percent.
While the markets in Europe and North America are weak, the truck market in South America is booming. Traton now expects sales there to increase by at least 5 percent in 2024, and a decline of a maximum of 10 percent for Europe and North America. In the first nine months, order intake stagnated at just under 190,000 trucks and buses. “October shows positive momentum in terms of incoming orders,” said CEO Levin.