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Volvo, Iveco, MAN and Scania make rapid development in new emerging markets New production bases of Volvo in India and Russia, MAN in China and Iraq, and Scania in Iraq Jul. 28, 2009 No.796

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Volvo has a joint venture with Eicher Motors in India, while opening a Russian plant in early 2009
Iveco: in China, its joint venture with SAIC and Chongqing Heavy Vehicle Group launches a...
MAN establishes new bases in China, Saudi Arabia, Iraq and Brazil, while taking a 50% stake...
Scania to open a delivery center in Malasia, Taiwan and Dubai, while resuming the assembling...

Executive Summary

  Four European commercial vehicle manufacturers -Volvo, Iveco, MAN and Scania- were gloomy with a sharp drop in sales in the first quarter of 2009 from the same period of the previous year. Sales of these four companies declined 53.6% total. Volvo had a 50.1% drop in sales, Iveco 63.0%, MAN 51.4% and Scania 40.7%. These companies except Scania expect that the heavy commercial vehicle segment will halve in 2009 (Scania says that the market trend in 2009 is opaque).

  Volvo and MAN are engaged in streamlining the North American business and the bus business respectively. In addition, four European companies are rapidly developing their business in the new emerging countries.

  Volvo launched the truck & bus business with Eicher Motors in India in 2008, and opened a truck plant having an annual production capacity of 15,000 at the beginning of 2009.

  Iveco had established a joint venture with SAIC and the Chongqing Heavy Vehicle Group in 2007. The venture company launched its first high end heavy-duty truck in March 2009, in which Iveco's technology was employed.

  During last one year, MAN has signed the long-term strategic partnership agreement with China National Heavy Truck Group (CNHTC) in China; opened the Truck CKD Plant in Saudi Arabia; increased the stake in the venture company to 50% in India; and bought out the VW's truck/bus company in Brazil. In Iraq, MAN plans to start assembling commercial vehicles in 2009.

  Scania will open delivery centres in Malaysia, Taiwan and Dubai in 2009 to assemble complete vehicles. It plans to resume production of trucks and buses in Iraq.

  The trend toward commercializing hybrid vehicles is common to these four companies. Volvo launched the hybrid city bus in last autumn. Iveco is carrying out the on-road field evaluation of the hybrid version of light commercial vehicles and medium trucks. MAN plans to launch a hybrid city bus in 2010. Scania started the test run of ethanol hybrid buses, which significantly cut CO2 emission.

 

Respective sales, net sales and operating income of Volvo, Iveco, MAN and Scania

			2004	2005	2006	2007	2008	Jan.-Mar. 2008	Jan.-Mar. 2009
Volvo	Unit sales	units	201,451	225,054	230,291	246,272	261,088	68,105	34,007
	Net sales	in millions of SEK	201,496	231,191	258,835	285,405	303,667	76,561	56,121
	Operating income		14,200	18,151	20,399	22,231	15,851	6,487	(4,528)
Iveco	Unit sales	units	162,300	172,500	181,500	211,700	192,100	58,050	21,485
	Net sales	in millions of Euro	9,292	8,483	9,136	11,196	10,768	2,970	1,523
	Operating income		357	332	546	813	838	222	(12)
MAN	Unit sales	units	69,410	74,218	87,160	100,609	103,705	25,106	12,207
	Net sales	in millions of Euro	6,799	7,377	8,685	10,410	10,610	2,550	1,615
	Operating income		322	469	670	1,010	1,056	280	5
Scania	Unit sales	units	56,082	58,383	65,281	75,878	73,793	19,066	11,304
	Net sales	in millions of SEK	56,788	63,328	70,738	84,486	88,977	21,991	15,859
	Operating income		6,599	6,859	8,753	12,164	12,512	3,604	506
Total of unit sales		units	489,243	530,155	564,232	634,459	630,686	170,327	79,003

Source: Four companies' 2008 Annual Report, 1Q 2009 Interim Report
Note:	MAN is shortened form of MAN Nutzfagrzeuge. SEK stands for Swedish Krona. One SEK is about 11.8 Yen as of the middle of July 2009.

Quarterly sales of Volvo, Iveco, MAN and Scania

(units)

 

	Jan.-Mar.	Apr.-Jun.	Jul.-Sep.	Oct.-Dec.	Increase/decrease over the previous year
					Jan.-Mar.	Apr.-Jun.	Jul.-Sep.	Oct.-Dec.
2008	170,327	180,035	140,171	140,153	24.7%	12.8%	-4.1%	-27.0%
2009	79,003				-53.6%

Source: Four companies' 2008 Annual Report, 1Q 2009 Interim Report

(Reference) New vehicle registration for medium to heavy duty commercial vehicles in European markets

(units)

 

GVW	Country	2005	2006	2007	2008	Jan.-May 2008	Jan.-May 2009
3.5t＜≦16t	18 Western European Countries	394,167	400,092	404,615	406,216	181,941	123,496
	New EU Members	30,110	50,035	72,734	64,459	34,205	12,425
	Europe total	424,277	450,127	477,349	470,675	216,146	135,921
16t＜	18 Western European Countries	273,527	284,717	289,599	291,012	134,474	86,594
	New EU Members	21,028	34,868	55,347	47,122	24,575	8,563
	Europe total	294,555	319,585	344,946	338,134	159,049	95,157
Total	18 Western European Countries	667,694	684,809	694,214	697,228	316,415	210,090
	New EU Members	51,138	84,903	128,081	111,581	58,780	20,988
	Europe total	718,832	769,712	822,295	808,809	375,195	231,078

 

Source: ACEA (Association des Constructeurs Europeens d'Automobiles g.i.e.)
Notes: 1.	The eighteen West European countries are 15 old EU countries, Norway, Switzerland and Iceland.
2.	The new EU members show the data of Czech Republic, Estonia, Latvia, Lithuania, Poland, Romania (which is not included in the 2007 data), Slovakia, Slovenia, Hungary (from 2007) and Bulgaria (from 2008).
3.	World production of heavy trucks and buses (OICA summary) is shown at the end of this Report for readers' reference.

 

Volvo has a joint venture with Eicher Motors in India, while opening a Russian plant in early 2009

  Volvo's 2008 sales were up 6.0% over 2007 to 261,000. Sales in SEK were also up by 6.4%, while operating profit was down by 28.6% owing to declining sales in the latter half and lowering the factory operating ratio.

  In the first quarter of 2009, sales and net sales were down 50.1% and 26.7%, respectively, from the same period of 2008. Operating profit was red by 4.5 billion SEK (it was black by 6.5 billion SEK in the same period last year).

  Volvo expects that the 2009 sales of heavy trucks will be down by half on the year-on-year basis. Based on the forecast, Volvo will streamline its North American business under the cooperation between Mack Trucks and Volvo Trucks. It is also reducing employees around the world. As Volvo has current assets worth 25 billion SEK and an available credit of 27 billion SEK at the end of March 2009, it is confident about the liquidity.

  Volvo aggressively expanded its business in new emerging markets. This European company and Eicher Motors had established the truck/bus business in India 2008. Volvo also opened a truck plant with an annual production capacity of 15,000 in Russia in early 2009.

  When it comes to the environmental responsiveness, Volvo released a hybrid city bus in Europe, in October 2008. The bus is said to reduce the fuel consumption and CO2 emission by 30%.

Volvo's sales by brand and region

(units)

		Western Europe	Eastern Europe	North America	South America	Asia	Others	Total
Volvo Trucks	2007	41,009	18,456	16,692	10,166	9,002	4,784	100,109
	2008	41,025	17,162	15,887	12,890	13,440	5,548	105,952
Renault Trucks	2007	59,097	9,488	517	1,107	4,216	5,017	79,442
	2008	54,944	8,699	494	1,172	5,252	5,918	76,479
Nissan Diesel	2007		20	2,479	808	26,455	8,422	38,184
	2008		9	1,608	933	39,089	7,724	49,363
Mack Truck	2007	0		13,592	3,183	243	1,603	18,621
	2008	8		12,157	3,097	200	1,151	16,613
Truck Total	2007	100,106	27,964	33,280	15,264	39,916	19,826	236,356
	2008	95,969	25,878	30,146	18,092	60,725	20,341	251,151
Volvo Buses	2007	3,377	371	1,547	1,318	2,757	546	9,916
	2008	3,140	173	1,884	995	3,033	712	9,937
Total	2007	103,483	28,335	34,827	16,582	42,673	20,372	246,272
	2008	99,109	26,051	32,030	19,087	63,758	21,053	261,088

Source: Volvo Group Annual Report 2008
Notes: 1.	As Nissan Diesel has been consolidated since the second quarter of 2007, its 2007 data are the results after the second quarter.
2.	In the 2008 data of Asia, the truck total includes sales of 2,744 vehicles by VE Commercial Vehicles in India, which has been consolidated since August 2008.

Volvo's quarterly sales

(units)

 

	Jan.-Mar.	Apr.-Jun.	Jul.-Sep.	Oct.-Dec.	Increase/decrease over the previous year
					Jan.-Mar.	Apr.-Jun.	Jul.-Sep.	Oct.-Dec.
2008	68,105	72,279	58,362	62,342	39.8%	23.6%	-1.3%	-22.0%
2009	34,007				-50.1%

 

Source: 2007/2008/2009 Volvo Quarterly Reports, Annual Reports
Note:	Volvo gave a notice of dismissal to 16,255 regular or temporary employees from 2008 to the beginning of 2009. The dismissed employees are 7,670 Swedish, 2,223 French, 2,328 Americans and 4,034 in other regions. Of them, 5,800 employees retired within 2008 (Volvo Annual Report 2008).

 

Volvo's business overview

(in millions of SEK)

 

		2004	2005	2006	2007	2008	Jan.-Mar. 2008	Jan.-Mar. 2009
Unit sales (units)		201,451	225,054	230,291	246,272	261,088	68,105	34,007
Net sales	Trucks Buses Others	136,879 12,722 51,895	155,396 16,589 59,206	171,265 17,271 70,299	187,892 16,608 80,905	203,235 17,312 83,120	50,758 3,647 22,156	37,384 4,006 14,731
	Total	201,496	231,191	258,835	285,405	303,667	76,561	56,121
Operating income (loss)	Trucks Buses Others	8,989 185 5,026	11,717 470 5,964	14,828 745 4,826	15,193 231 6,807	12,167 (76) 3,760	4,432 (122) 2,177	(2,382) (95) (2,051)
	Total	14,200	18,151	20,399	22,231	15,851	6,487	(4,528)
Net income (loss)		9,355	13,106	16,318	15,028	10,016	4,215	(4,223)
Research and Development		7,233	7,557	8,354	11,059	14,348	3,334	3,463

 

Source: Volvo Group Annual Report 2008, Interim Report Q1 2009
Notes: 1.	The Commercial Vehicle division of the Volvo Group consists of Volvo Trucks (US), Mack Trucks, Renault Trucks, Nissan Diesel (bought out in March 2007; it has been consolidated since the second quarter in 2007), and Volvo Buses. Mack specializes in heavy trucks with a GVW of 16 tons or greater. Volvo and Nissan Diesel center on heavy trucks. Renault's production ranges from light trucks to heavy trucks.
2.	Nissan Diesel had net sales of 20,308 SEK from the second quarter to the fourth quarter in 2007, and an operating income of 486 million SEK (including the negative effect of 495 million SEK due to the acquisition).
3.	The Volvo Group comprises Construction Equipment, Volvo Penta (marine engines), Volvo Aero (aircraft engines) and Financial Services.

 

 

Volvo: Cooperative plan to streamline the North American business by Mack Trucks and Volvo Trucks

Mack Trucks and Volvo Trucks North America announced the cooperative plan in August 2008. They will jointly streamline the North American business. Essential features of the plan are as follows: (1) Mack's headquarters will be relocated from Allentown, Pennsylvania to Greensboro, North Caroline, where Volvo is headquartered (2009), (2) Mack's truck production will be integrated in the Macungie Plant, Pennsylvania (it was implemented in the fourth quarter of 2008 after Mack and the UAW signed the new labor-management agreement), (3) Mack will restructure the spare parts dealers network across the country to improve the competitiveness and the service quality (2009~2010), and (4) required spending will be about 60 million dollars.

Source: Volvo Group Press Release 2008.8.14, Annual Report 2008

 

Volvo's business expansion in Russia and India

Volvo opens a truck plant with an annual production of 15,000 in Kaluga, Russia

The Volvo Group spend 935 million SEK for building a truck assembling plant in Kaluga (200 km southeast of Moscow), Russia, in January 2009. The plant is going to produce 10,000 Volvo trucks and 5,000 Renault trucks for Russia and the CIS countries.

Joint truck/bus business with Eicher Motors, India

Volvo and Eicher Motors officially agreed to establish VE Commercial Vehicles Ltd., a joint venture, in May 2008. The whole truck/bus business from Eicher Motors as well as the truck sales business and truck/bus service network from Volvo will be transferred to the venture company.

The Volvo Group spent 1,840 million SEK to take a 45.6% stake in the joint venture and 8.1% in Eicher. The Group takes a total 50% stake in the joint venture, including indirect investment. The joint venture has been consolidated since August 2008. Eicher's truck/bus business posted sales of 3.3 billion SEK and an operating income of 135 million SEK in the fiscal year ending in March 2008.

Source: Volvo Group Press Release 2009.1.19

 

Volvo launches a hybrid city bus in the European market

Volvo released hybrid technology applicable for bus, truck and construction equipment in September 2008. It is concerning a parallel hybrid system using a diesel engine with a lithium ion battery as well as an energy regeneration braking system. It successfully reduced the cost by using self-manufactured parts and standardizing the platform.

In October 2008, Volvo launched the Volvo 7700 Hybrid, a hybrid city bus, in the European markets (Volvo says that the bus is the first commercialized hybrid bus in the markets). The hybrid city bus is equipped with a 5-liter diesel engine. The engine improves the fuel consumption and CO2 emission by 30% and lower PM and NOx emission by 40 to 50% compared with the base model equipped with a 9-liter engine. The Sales-Lentz, a bus service company in Luxembourg, has already placed orders for 6 buses. They will be delivered to the bus service company in autumn 2009.

Source: Volvo Group Press Releases 2008.9.18/2008.9.24

 

Iveco: in China, its joint venture with SAIC and Chongqing Heavy Vehicle Group launches a classy heavy truck first time

 

  Iveco's 2008 sales declined by 9.3% over 2007 to 192,000. Sales in Euro were down by 3.8%, while operating profit slightly increased by reducing costs.

  Sales were down by 63.0% in the January - March period of 2009. Sales in Euro also dropped by 48.7% and operating profit posted negative 12 million Euros (it had been positive 222 million Euros in the same period of last year).

  Iveco's notable movement in the new emerging markets is that the joint venture company of Iveco, SAIC and Chongqing Heavy Vehicle, which had been established in 2007, launched the first high end heavy truck based on the Iveco's technology in March 2009.

  For the environmental responsiveness, the hybrid version of light commercial vehicle Daily and medium truck Eurocargo are subjected to the on-road field evaluation.

Iveco's reginal sales

(1,000 units)

	France	Germany	UK	Italy	Spain	Other	Western Europe	Eastern Europe	Europe total	Others	Worldwide
2002	17.6	15.0	16.2	44.3	14.7	21.0	128.8	9.5	138.3	23.6	161.9
2003	17.8	14.0	13.8	38.3	14.8	20.6	119.3	9.7	129.0	17.5	146.5
2004	20.4	16.3	14.6	38.7	16.8	22.4	129.2	10.8	140.0	22.3	162.3
2005	25.6	16.8	16.6	37.9	19.3	14.8	131.0	15.8	146.8	25.7	172.5
2006	25.9	20.3	15.0	36.0	20.6	17.3	135.1	19.7	154.8	26.7	181.5
2007	29.3	22.8	14.3	38.8	21.2	21.1	147.5	31.2	178.7	33.0	211.7
2008	27.6	19.6	13.8	31.3	13.3	19.6	125.2	29.5	154.7	37.4	192.1

Source: Fiat Annual Report 2008
Note:	The data do not include the sales of affiliate companies. Some regional categories differ between before 2004 and after 2005.

Iveco's quarterly sales

(units)

 

	Jan.-Mar.	Apr.-Jun.	Jul.-Sep.	Oct.-Dec.	Increase/decrease over the previous year
					Jan.-Mar.	Apr.-Jun.	Jul.-Sep.	Oct.-Dec.
2008	58,050	59,047	39,953	35,050	21.2%	4.3%	-17.8%	-40.2%
2009	21,485				-63.0%

 

Overview of Iveco Group's business results

(in millions of Euro)

 

	2004	2005	2006	2007	2008	Jan.-Mar. 2008	Jan.-Mar. 2009
Consolidated unit sales (units)	162,300	172,500	181,500	211,700	192,100	58,050	21,485
Naveco (units)		18,000	20,000	59,300	58,900
SAIC Iveco Hongyan (units)				24,000	22,300
Other affiliated companies (units)	57,500	64,800	5,200	0	0
Unit sales by affiliated companies (units)	57,500	82,800	25,200	83,300	81,200
Total unit sales (units)	219,800	255,300	206,700	295,000	273,300
DE Production (units)	435,000	435,300
Net sales	9,292	8,483	9,136	11,196	10,768	2,970	1,523
Operating income	357	332	546	813	838	222	(12)
Net profit	109	212	565	803	779
R&D costs	231	211	174	207	246
Number of employees	30,771	24,323	24,533	26,461	27,108

 

Source: Fiat Annual Report 2008, 2009 1Q Quarterly Report
Notes: 1.	Iveco's Powertrain Division used to produce diesel engines. It was integrated in the Fiat Powertrain Technologies (FPT) in 2006. The above Iveco's business results after 2005 do not include the Powertrain Division.
2.	Naveco (Nanjing Iveco), an Iveco's affiliate, was established under the 50-50 stake between Iveco and Nanjing Automotive Corporation. SAIC Motor bought out Nanjing Automotive at the end of 2007, and Nanjing Automotive has become a subsidiary of SAIC Motor. Naveco's 2008 sales were comprised of 22,200 small vehicles and 36,700 medium vehicles (the medium vehicles have been produced by Yuejin Automotive since it was bought out in February 2007).
3.	SAIC Iveco Hongyan, an affiliate company of Iveco is a heavy-duty commercial vehicle manufacturer jointly established by Iveco, SAIC Motor Corporation and the Chongqing Heavy Vehicle Group in 2007, by taking a stake and reorganizing Chongqing Hongyan Automotive.
4.	The data of other affiliate companies include the results of Ashok Leyland, India, by 2005. The 2006 data are 5,200 Otoyol in Turkey. Since the Turkish company ended the operation in 2006, the sales of the company were zero after 2007.

 

 

Joint venture of Iveco, SAIC, Chongqing Heavy Vehicle launched a new heavy-duty truck model

SAIC Iveco Hongyan Commercial Vehicle (SIH), a joint venture of Iveco, SAIC, and Chongqing Heavy Vehicle, launched Genloyn, a new heavy-duty truck model in China, in March 2009 (equipped with a 9-liter engine). The truck is the first model released in the high-end heavy-duty truck market by the joint venture. This model has a body as a result of the fusion of the Iveco's technology and design in China. The low-fuel consumption engine made by Fiat Powertrain Technologies meets the Euro III. It will be reformed to meet the Euro IV and V as needed. It is manufactured at the new Chongqing Plant of SIH.

Source: Iveco Press Release 2009.3.12

 

Iveco begins on-road field evaluation program with hybrid Daily and Eurocargo

Iveco and FedEx Express have carried on on-road field evaluation of ten hybrid Daily vans in Milan and Turin, Italy since July 2008. The evaluation will finish in May 2010. According to the results of first six months announced in April 2009, the average travel distance of these ten vehicles was 7,900 km; the fuel consumption was improved by 26.5% from the existing models, and CO2 emission was reduced by total 7.5 tons. Iveco says that the hybrid Daily will be improved with the fuel consumption and CO2 emission by 30% at most by employing the start by an electric motor, an idle reduction mechanism, a regeneration brake, etc.

Iveco and Coca-Cola Enterprises began the on-road field evaluation of a parallel hybrid Eurocargo delivery truck from March 2009 in Brussels, Belgium. The medium truck meets the Euro V emission gas standard. It is equipped with a Tector diesel engine of the maximum output of 118 kW, an electric motor generator of the maximum output of 44 kW, 6-speed AT, a lithium ion battery of a rated capacity of 1.9 kWh, an idle reduction mechanism and a regeneration brake.

Source: Iveco Press Release 2008.7.10/2009.3.26/2009.4.6

 

MAN establishes new bases in China, Saudi Arabia, Iraq and Brazil, while taking a 50% stake in the Indian base

 

  MAN's 2008 sales marked record high with increase by 3.1% over the previous year to 103,705. MAN also refreshed the records of sales and EBIT. They were up by about 2%. Truck sales were up by 3.5% thanks to the booming TGS and TGX launched in 2007. Bus sales were down, while the operating profit returned to the black through the business reorganization in 2007 (negative 13 million Euros in 2007 and positive 19 million Euros in 2008).

  Sales of the first quarter of 2009 were down by 51.4%. Sales in Euro were down by 36.7%, and operating profit plummeted to 5 million Euros (280 million Euros in the first quarter of 2008).

  What it comes to the business expansion in the new emerging markets during the recent one year, MAN and the China National Heavy Truck Group signed the long-term strategic partnership; MAN opened a Truck CKD Plant in Saudi Arabia (the initial annual production plan is 3,000); increased the stake to 50% from 30% in a joint venture in India; and bought out VW's truck/bus company, which recorded a production of 47,000 in 2007 in Brazil. In addition, MAN plans to begin to assemble commercial vehicles from 2009 in Iraq.

  For the environmental responsiveness, MAN will begin to mass-produce hybrid low-floor city buses from 2010.

Note:

MAN AG took an additional stake in Scania in December 2008. Its shareholding ratio was 13.35% and the voting share was 17.27% before. The additional stake boosted the voting share to more than 20%. VW has become the largest shareholder of Scania since March 2008. Scania has been consolidated since July. MAN says that it is still interested in it from the long-term strategic perspective (MAN Group Press Release on December 24, 2008).

Outline of MAN Nutzfahrzeuge's business results

(in millions of Euro)

 

	2004	2005	2006	2007	2008	Jan.-Mar. 2008	Jan.-Mar. 2009
Unit sales (units)	69,410	74,218	87,160	100,609	103,705	25,106	12,207
Sales	6,799	7,377	8,685	10,410	10,610	2,550	1,615
from Germany	2,371	2,225	2,290	3,470	2,993
from outside Germany	4,336	4,574	5,087	6,940	7,617
Operating profit	322	469	670	1,010	1,056	280	5
EBIT		497	698	1,039	1,062
Net profit	192	266	323	785	n.a.
EBIT to sales ratio (%)	4.7	6.4	7.7	9.7	10.0	11.0	0.3
Number of Employees	33,810	33,368	36,052	36,591	36,251	37,274	33,820

 

Source: MAN Nutzfahrzeuge AG Annual Report 2008, MAN Group Quarterly Report Q1 2009
Notes: 1.	EBIT (Earnings before Interest and Taxes) is operating profit including results from financing.
2.	The figures of the Operating profit, EBIT and EBIT to sales ratio after 2004 are those after the adjustment of lease accounts.
3.	The MAN Group comprises MAN Nutzfahrzeuge as a core business, which manufactures and sells commercial vehicles, and whose sales accounts for about 71%, Industrial Services, Diesel Engines and Turbo Machinery.

 

MAN Nutzfahrzeuge's quarterly sales

(units)

 

	Jan.-Mar.	Apr.-Jun.	Jul.-Sep.	Oct.-Dec.	Increase/decrease over the previous year
					Jan.-Mar.	Apr.-Jun.	Jul.-Sep.	Oct.-Dec.
2008	25,106	28,201	25,612	24,786	12.1%	15.0%	15.6%	-21.4%
2009	12,207				-51.4%

Source: 2007/2008/2009 MAN Group Quarterly Reports, MAN Nutzfahrzeuge AG Annual Reports

 

MAN to promote reorganization of its bus business

MAN Nutzfahrzeuge integrated the bus business in the truck business at the beginning of 2008. Since then, it has implemented the two brand strategy of the Neoplan, a high-end bus, and the MAN, a city and long-distance bus. Among the Neoplan plants, the production of Neoplan high-end buses (long-distance buses, double deck buses, etc.) was transferred to the Plauen Plant. The Pilsting Plant reduced workers from 600 to 200. The plant will be operated by Neoplan by the middle of 2009. VISEON bus, an independent company, will take over the operation of the Pilsting Plant afterward, and produce the Neoplan brand special buses (trolley buses, airport shuttle buses, etc.) by commissioning.

Source: MAN Group Annual Report 2008, Man Nutzfahrzeuge Group Press Release 2008.7.23

 

MAN Nutzfahrzeuge' business results by division

		Trucks				Buses
		2007	2008	Jan.-Mar. 2008	Jan.-Mar. 2009	2007	2008	Jan.-Mar. 2008	Jan.-Mar. 2009
Unit sales	units	93,260	96,478	23,754	10,921	7,349	7,227	1,352	1,286
Net sales	in millions of Euro	9,023	9,088	2,236	1,341	1,387	1,522	314	274
Operating income	in millions of Euro	1,023	1,037	276	11	(13)	19	2	1
Number of employees	persons	28,274	29,026			8,121	6,984

Source: MAN Nutzfahrzeuge AG Annual Report 2008, MAN Group Interim Report Q1 2009

 

MAN's business expansion in China, Middle East, India and Brazil

MAN has a 25% stake in a major Chinese truck company to jointly develop and produce new series trucks

The MAN Group bought 25% share in Sinotruck Hong Kong with 560 million Euros in July 2009. It is controlled by CNHTC (China National Heavy Truck Group) in Shandong. The Group announced that both companies would sign the long-term strategic partnership.

Sinotruck will participate in development of the new series trucks based on the TGA truck, engine, chassis, axles, etc. licensed by MAN, planning to produce the trucks at the CNHTC Plant in China. CNHTC sold more than 100,000 heavy duty trucks in 2008, and had about 20% market share in China.

Source: Man Group Press Release 2009.7.15

MAN opens an assembly plant with a Saudi Arabian importer

MAN Nutzfahrzenuge opened a truck CKD assembling plant in January 2009 in Jeddah with Haji Husein Alireza & Co., Ltd., an importer which has dealt in MAN vehicles in Saudi Arabia for 25 years. The plant will begin with an annual production of 3,000 TGA-WW trucks and semi-trailer tractors for the Saudi Arabian market (MAN obtained a 22.7% share in the 16 ton or greater truck market in Saudi Arabia in 2007).

Source: Man Nutzfahrzeuge Group Press Release 2009.1.24

MAN, the Iraqi government and Iraqi company signed the memorandum for import and local production of commercial vehicles

MAN Nutzfahrzeuge and Terramar, an Iraqi dealer, and Iraqi Ministry of Industry signed the memorandum with respect to import and local production of commercial vehicles in July 2008. According to the plan MAN and Terramar will build truck and bus assembling lines in Iraq to assemble chassis for tippers, tankers, semitrailer tractors and bus bodies from 2009. In addition, MAN will reform and expand the existing service organizations in Northern, Middle and Southern part of the country to comply with MAN's requirements.

Source: Man Nutzfahrzeuge Group Press Release 2008.7.23

MAN increases the stake in Indian joint venture to 50%

In December 2008, Man Nutzfahrzeuge increased the stake from 30% to 50% in MAN FORCE TRUCKS, an Indian joint venture established with Force Motors. MAN has a plan to drastically expand sales of India-made trucks in the Asian and African growing markets. The joint venture has been in operation since 2006. It manufactures the MAN CLA brand heavy-duty trucks for India, Asian and African countries. These trucks' local content is about 90%.

Source: Man Nutzfahrzeuge Group Press Release 2008.12.3

MAN AG buys out Volkswagen Caminhoes e Onibus in Brazil

MAN AG bought out Volkswagen Caminhoes e Onibus, the largest truck manufacturer in Brazil, from VW in January 2009. The Brazilian company has manufactured trucks and buses since 1996. It produced 47,000 trucks and buses in total in 2007. It has sales and service channels in Brazil and neighboring countries. This buyout enables MAN to maximize the synergy with the existing production structures and expand sales in the South American markets (MAN will continue to sell the VW brand products for a time). VW is the largest shareholder having a 30% stake in MAN (It is said that three companies of VW, MAN and Scania controlled by VW are planning a joint business).

Source: Man Nutzfahrzeuge Group Press Release 2008.12.15

 

MAN to begin mass-production of hybrid low-floor city buses from 2010

MAN Nutzfahrzeuge will begin to mass-produce Lion's City Hybrid, a hybrid low-floor city bus, from 2010 (several cities in Europe are expected to employ the bus). The fuel consumption will be improved by 30% at most compared with the existing city buses. The hybrid city bus is able to run with diesel and the second generation bio fuels of biomass to liquid and gas to liquid.

Source: Man Nutzfahrzeuge Group Press Release 2008.9.23

 

Scania to open a delivery centre in Malasia, Taiwan and Dubai, while resuming the assembling in Iraq

 

  Scania's 2008 sales were down by 2.7% over the previous year to 73,793, while sales in SEK and operating profit were up by 5.3% and 2.9%, respectively. Operating profit stayed at 14.1% (14.4% in 2007).

  Sales were down by 40.7% in the first quarter of 2009. Sales in SEK declined 27.9%, and operating profit plummeted to 506 million SEK (3,604 million SEK in the same period of 2008). Scania reduced workers, implemented 4-day work week, constrained the investment in facilities and development; thereby, it places more stresses on the cash flow. Scania says that it will not change the plan to increase the production capacity to 150,000 by 2015 (announced in May 2008) despite the tight conditions.

  Responding to the rising markets, Scania will opens delivery centres for final assembling of complete vehicles in Malaysia, Taiwan and Dubai in 2009. In addition, it plans to resume production of trucks and buses in Iraq.

  For the environmental responsiveness, Scania started on-road field evaluation of ethanol hybrid buses, which reduces CO2 emission by 90% at maximum compared with diesel vehicles.

Scania's regional sales of heavy-duty trucks and buses

(units)

	2004	2005	2006	2007	2008	Jan.-Mar. 2008	Jan.-Mar. 2009
Western Europe	32,469	33,663	36,678	37,396	36,253	9,838	5,604
Central and Eastern Europe	5,696	6,087	9,258	15,249	12,992	3,789	925
Latin America	9,076	9,503	9,636	12,134	12,784	2,771	2,411
Asia	6,411	6,031	6,425	7,556	8,442	2,080	1,522
Other markets	2,430	3,099	3,284	3,543	3,322	588	842
Total	56,082	58,383	65,281	75,878	73,793	19,066	11,304

Source: Scania Annual Report 2008, Interim Report 1Q 2009

Scania's quarterly sales

(units)

 

	Jan.-Mar.	Apr.-Jun.	Jul.-Sep.	Oct.-Dec.	Increase/decrease over the previous year
					Jan.-Mar.	Apr.-Jun.	Jul.-Sep.	Oct.-Dec.
2008	19,066	20,508	16,244	17,975	8.4%	2.6%	-0.3%	-18.3%
2009	11,304				-40.7%

 

Source: 2007/2008/2009 Scania Quarterly Reports, Annual Reports
Note:	Scania and the labor union agreed to implement the 4-day work week for 6,000 clerks and 6,000 plant workers in Sweden for six months from June 2009. In return, Scania will not lay-off workers during the period. Scania also implemented various shorter working programs for some 2,000 employees in Netherland, France, Germany and others (Scania Press Release on May 15, 2009).

 

Outline of Scania's business results

(in millions of SEK)

 

	2004	2005	2006	2007	2008	Jan.-Mar. 2008	Jan.-Mar. 2009
Sales	56,788	63,328	70,738	84,486	88,977	21,991	15,859
Operating Income	6,599	6,859	8,753	12,164	12,512	3,604	506
Operating margin(%)	11.6%	10.8%	12.4%	14.4%	14.1%	16.4%	3.2%
Net income	4,316	4,665	5,939	8,554	8,890	2,513	179
Capital expenditure	2,798	3,597	3,810	4,277	5,447
Research and development	2,219	2,480	2,842	3,214	3,955	1,055	924
Number of employees	29,993	30,765	32,820	35,096	34,777	35,565	33,631

 

Source: Scania Annual Report 2008, Interim Report 1Q 2009
Notes: 1.	Scania is a manufacturer specializing in customer-tailored commercial vehicles of heavy trucks of more than GVW 16 tons and large buses. It focuses on sales in Europe, while it does not sell in North America.
2.	The capital expenditure is net capital expenditure, which does not include the cost of buyout.
3.	In January 2009, Porsche increased the shareholding to 50.76% in VW, which held a voting share of 68.60% in Scania. As a result, Porsche was required to make a TOB by the Swedish law. Porsche said that it was not interested in acquiring shares and operation of Scania. Porsche offered the lowest price for the TOB, and acquired 7.93% stake in Scania (voting share was 2.34%). The TOB ended on February 10.

 

 

Scania expands business in Malaysia, Taiwan, Dubai and Iraq

In Malaysia and Taiwan, Scania opens delivery centres, planning the centre in Dubai

In January 2009, Scania opened the delivery centre in Malaysia, which conduct final assembling and installation of instruments for truck and bus finished cars for Malaysia and Thailand. In February 2009, it also opened the delivery centre in Taipei, Taiwan, which is able to assemble 500 trucks and buses per year. In the latter half of 2009, Scania plans to open the delivery centre in Dubai to catch up with the growing Arabic markets and gulf regions.

Source: Scania Press Release on February 25, 2009

Scania and Iraqi Government signed the fundamental agreement for assembling trucks and buses

In November 2008, Scania and the Iraqi Government had signed the basic agreement for assembling trucks and buses in Iraq. Scania will use the old plant in the suburban of Baghdad, where Scania used to assemble trucks. It will begin with a production of 500 from the third quarter in 2009. The annual production capacity is expected to reach 3,000.

Source: Scania Press Release 2008.11.19

 

Scania begins on-road field evaluation of ethanol hybrid buses in Stockholm

Scania began the on-road field evaluation of six ethanol hybrid buses in May 2009. The buses are the new OmniLink low-floor bus equipped with a series hybrid system. They will be evaluated for two years on the lines of the Stockholm Public Transport (SL). Scania says that the hybrid technology is able to improve the fuel consumption by 25%, and the use of ethanol reduces CO2 emission by 90% at maximum from diesel vehicles. Scania has supplied total 400 ethanol buses to SL since 1989.

Source: Scania Press Release 2009.5.26

(Reference)

World production of Heavy Trucks and Buses (OICA's tally)

(units)

 

Heavy Trucks Buses 2007 2008 2007 2008 Austria Belgium Finland 28,097 43,516 303 25,441 43,081 376 0 1,213 0 1,286 France Germany Italy 67,395 243,642 51,114 69,761 257,396 48,232 4,336 9,085 1,449 4,151 10,038 1,344 Netherlands Portugal Spain 74,649 5,981 92,793 71,326 6,609 73,883 2,007 158 1,546 1,945 126 1,384 Sweden UK 40,364 18,436 46,858 25,565 8,806 1,355 9,889 1,774 EU 15 Countries 660,387 662,039 29,797 31,811 Czech Rep. Hungary Poland 3,168 3,566 2,324 2,726 3,067 13,381 3,182 479 3,554 3,496 629 4,500 Romania 155 277 10 11 New EU members 9,213 19,451 7,225 8,636 Serbia Russia Belarus Ukraine 420 103,932 25,548 4,637 350 102,393 26,291 9,437 149 25,604 2,160 8,654 360 25,872 2,220 9,777 Eastern & Central Europe 134,999 138,471 36,567 38,229 Turkey 34,544 36,800 16,250 18,186 Europe 219,120 241,580 68,848 74,940 Canada Mexico USA 36,640 89,544 279,117 34,970 83,560 225,156 28,419 23,800 NAFTA 405,301 343,686 28,419 23,800

Heavy Trucks Buses 2007 2008 2007 2008 Argentina Brazil Chile 4,912 137,394 10,804 7,183 167,330 4,405 721 39,087 1668 44,111 Ecuador Venezuela 20,102 10,391 20,381 9,069 43 291 S.America 183,603 208,368 39,851 46,070 Australia China India 6,633 726,024 245,996 5,438 1,066,110 201,182 344,005 44,420 447,149 44,101 Indonesia Iran 48,823 81,548 1,676 5,000 2,956 4,960 Japan Japan (Note 2) 718,901 144,182 734,902 148,332 11,516 11,660 Malaysia South Korea Taiwan 13,986 26,397 3,132 17,326 27,346 3,870 916 16,378 1,208 17,309 Thailand Vietnam 15,331 936 13,018 1,334 578 376 Asia-Pacific Asia-Pacific (Note 3) 1,806,159 1,423,312 2,152,074 1,565,504 424,489 529,719 Egypt South Africa 6,280 36,362 7,983 34,027 3,154 1,357 4,362 1,859 Africa 28,578 28,810 4,511 6,221 Total Total (Note 3) 3,262,784 2,688,065 3,589,699 3,003,129 587,109 702,672

 

Source: OICA (International Organization of Motor Vehicle Manufacturers)
Notes: 1.	The tally generally covers trucks with a GVW five to six tons or greater except Japan. Some countries' production figures include doubly-counted figures in other countries. The regional total shows the number of vehicles after the adjustment of such doubly-counted figures.
2.	For the Japanese truck production, the OICA tally counts trucks with a GVW three tons or greater. The Japanese production of trucks with a truckload of five tons or greater are shown in blue (source: JAMA data).
3.	Total of Asia-Pacific and worldwide production shown in blue is the total calculated by replacing the Japanese truck production with the production of trucks having a load capacity of five tons or greater.
4.	The figures of Korea are based on the KAMA's OICA exchange files.