MAN Trucks Comes Strong After Hike in Profit and Sales
Published On Apr 08, 2016
After the operating profits of MAN trucks plummeted to 92 million euros last year owing to restructuring cost and low demand in Brazil, the company is foreseeing good sales and profit in the next couple years. Once the sales were down, the Germany based auto maker decided to cut 1,800 jobs and did some reshuffling in production unit to cover up for losses. The harsh decision are now paying of well and the company is expecting around eight percent operating margin till 2021.
MAN’s Chief Executive Joachim Drees said, “We are targeting an operating margin of 8 percent by 2021 (at the truck & bus division).”. There will already be a significant improvement in 2016 results if markets develop reasonably well. Banking on its collaboration with Scania after parent group Volkswagen brought both of them together, MAN’s only chance to beat competitors like Daimler and Volvo is to increase the sales margin anyhow which were at 0.2 percent last year compared Mercedes-Benz’s 7.3 percent.
Mr. Dress also said, “MAN is reorganising production at truck and component factories in Germany, Austria and Poland to avoid costly overlaps. The steps will help increase cost savings at the trucks division by 880 million euros through the end of 2017. That's the only way for us to generate the means we need to invest in the future.”
However, there is still a long road to go for MAN before it leaves its competitors behind. Nonetheless, surging profit has come as a source of hope after Volkswagen hit the emission-scandal last year and ever since the group has been treading water in each auto segment.