X

Volkswagen sets sights on global truck with play for Scania ownership

Jason Cannon February 24, 2014

Less than a week removed from tapping former Daimler Truck boss Andreas Renschler to lead its truck operations, Volkswagen has offered to buy the remaining shares of Swedish truck maker Scania for more than $9 billion.

Volkswagen AG already owns more than 60 percent of Scania.

Volkswagen also owns a 75 percent stake in German truckmaker MAN, and gaining full control of Scania would likely unlock scores of efficiency opportunities, and propel VW into the global truck market alongside Daimler and Volvo.

top_13011-010_tcm40-29869Oddly enough, Scania rejected a takeover request in 2006 from MAN, but the attempt prompted VW to seize more shares of both companies and set the stage for where we are now.

Bloomberg estimates the combination of MAN and Scania would produce a behemoth larger than Volvo, currently the world’s second-largest truckmaker. Globally, the two VW units’ nine-month deliveries totaled 154,000, compared with 139,000 for Volvo, according to Bloomberg. Volkswagen still has ground to make up with market leader Daimler, which sold 350,000 trucks over that period.

With its German neighbors already holding a sizable global lead, mostly up for grabs would be the lead in the European truck market.

Thus far, Scania has stood on the sidelines as larger companies have swallowed competitors. Volvo assumed Mack, UD and Renault and Daimler with Benz, Freightliner and Fuso. The proverbial handwriting is on the wall and Scania is the last thing standing between Volkswagen and a better integrated heavy truck division.

If this deal closes, how long do you think it will take for Scania dealerships to start popping up across the street? Considering the engineering that will need to go into a North American unit, it’s not likely to be anytime soon. Volkswagen would also have to make a firm bet that North American customers want a cabover, or pour millions more into developing something that looks like what we most commonly see on the roads.

Those considerations aside, VW will want to recoup that $9 billion investment somehow, and putting more Scania/MAN trucks on every road around the planet is the fastest way to do it.

When Scania made its first strong push stateside in the 80s, their truck lineup was impressive, but their launch barely got off the ground as they failed to establish a broad network of dealers (I think at one time Scania boasted less than 20 dealers in the U.S.) and barely cracked into the market. After less than 10 years, the company folded its tents in North America and retreated.

With cabovers creeping back into the daily conversation, I wouldn’t be surprised to see yet another German-engineered truck on the roads eventually. But they’re not printing calendars for that year yet. Bear in mind, Renschler can’t officially join VW until next February when a non-compete with Daimler expires.

It will take at least a year to sort through the paperwork of a merger, but it’s more than likely Renschler will have something to do on his first day, and that something is probably develop a new global truck strategy.

Jason Cannon is Online Managing Editor for Truck Parts & Service.

You can follow me on twitter at @By_Jason_Cannon

Poll

How would you categorize the state of your business 10 months into 2014?

Latest

Pete ‘show-truck-ready’ 389 now in production

International unveils multi-purpose disaster relief DuraStar

Gerhart Machinery hosts vintage Mack show for 25th year

Popular

McCandless Truck Center acquires Hanson International

Pete ‘show-truck-ready’ 389 now in production

October trailer orders shatter records

Successful Dealer Award

Click here to read about the award and see the nominees for this year's award.