Volkswagen’s supervisory board is today considering a plan to reorganize its truck business, merging its MAN and Scania brands into a single holding.
The company has been thinking about the move for some time.
Now, four weeks after Andreas Renschler took up his position as head of VW’s truck division, the former Daimler manager will defend the plan before VW’s supervisory board.
Mr. Renschler favors creating a holding company that would be managed independently of VW’s passenger car business, Europe’s largest.
The move would see the truck subsidiaries MAN, Scania and the VW commercial vehicle arm hived off from car manufacturing.
The new company should be made ready “for the capital market and for takeovers,” according to sources close to the VW group.
Mr. Renschler used to work for Daimler where he made a similar decision to restructure the truck business.
At today’s meeting, supervisory board members are expected to consider the proposal, but not make decisions. The general shareholders’ meeting of MAN would have to approve changes in structure.
VW controls more than 75 percent of MAN shares and almost all of Scania. The parent company declined to comment on the plan.
Video: Scania’s Winter test event in the Norwegian ski region of Trysil.
Mr. Renschler used to work for Daimler, where he made a similar decision to restructure its truck business. At Daimler, he helped create a truck holding company that enabled the loss-making business to return to profit.
As in the Daimler model, the proposed holding at VW would likely have close management over MAN and Scania.
Daimler exerts central control over its truck subsidiaries Mercedes-Benz, Freightliner, Barat Benz and Fuso.
The Stuttgart-based automaker develops truck engine and components centrally, when possible.
One outcome has been a “global engine” used in some Daimler models which varies by subsidiary, but is identical at its core. This reduces research and development costs, and has helped Daimler raise earnings from trucks.
At Volkswagen, the truck business is structured very differently.
Development at MAN and Scania is completely separate, a moderately successful approach.
MAN in particular has been hampered by the weak economy in Europe and staff at three factories are working reduced hours.
Scania is at risk for a high E.U. fine for price fixing, while MAN may escape without penalty, thanks to becoming a witness for the prosecution.
Video: MAN TGX D38.
Mr. Renschler, the former Daimler executive, has started to put together a team for VW’s new truck holding company.
Anders Nielsen, the former head of MAN’s commercial vehicle division, is expected to become the new head of development, according to information received by Handelsblatt.
Matthias Gründler, who Mr. Renschler recruited from Daimler, will be responsible for finance. Ulf Berkenhagen, who manages business with MAN suppliers, would be in charge of purchasing.
The holding company is expected to closely manage the truck subsidiaries, which have tens of thousands of employees.
It is not yet clear where the new management company would be located. Mr. Renschler believes it should have its headquarters outside Wolfsburg, a suggestion met with skepticism by some VW managers.
In Wolfsburg, where VW is headquartered, managers from the car department have influence.
Apparently, in developing plans for the truck holding company, Mr. Renschler had to step on many toes in the process. He is likely to want to avoid the fate of his predecessor, Leif Östling.
In Wolfsburg, Mr. Östling was little-known and failed to further the cooperation between MAN and Scania.
As well as holding its supervisory board meeting today, Volkswagen will also present last year’s figures.
Analysts are more interested in the forecast for the current business year.
“A cautious outlook could disappoint the markets,” said Michael Punzel, an analyst at DZ Bank. He expected VW’s management to describe prospects for 2015 “conservatively as usual.”
That would be in line with the picture at other carmakers.
Toyota, the world’s largest car maker, lowered its forecast for this year, due to the lull in the Japanese market, which could lead to a drop in sales.
Last year, Volkwagen came close to selling as many cars as Toyota, the world leader. Toyota sold 10.23 million cars and VW, 10.14 million. As a result, VW would not need a growth rate as high as last year’s 4 percent to become No. 1.
So far, management has only said they plan to become No. 1 by 2018.
Jose Asumendi, an analyst at JP Morgan Cazenove, said that what matters more than the number of cars VW sells is its operating profit margin for 2015. He said that could be 6 percent to 7 percent, just like last year.