Janurary 5, 2019
MAN and Scania are two separate subsidiaries of the VW-corporation since quite some time. When acquiring VW thought truck business is resembling car business which would be advantageous for VW as well as for MAN and Scania. However before getting the full amount of profit VW saw it had to accomplish the task of coordinating the production processes of the two truck companies – starting with research and development and procurement. VW as the holding company believed monitoring and coordinating could be done in conceivable time.
That however proved to be too optimistic, the task of monitoring the cooperation was definitely much tougher than envisioned. Long decision processes, resistances of staffs and other difficulties on all three sides delayed the project substantially and finally VW realized not even the basic idea wasn’t as good as imagined. Parts for purchasing and customers for sales were all too different from car manufacturing. That convinced VW finally not to continue and to shed MAN and Scania from its list of desirable subsidiaries.
The original idea of cooperation only between MAN and Scania however survived. It had substantial economic background with main production processes on same level. That could be enhanced by higher production quantities and there are same goals in research and development and same type of customers. So the decision was made for an IPO of MAN and Scania, to create a new independent stock company called Traton.
Before the IPO however subsidiaries of MAN that were not part of the core truck business, e.g. the companies Renk AG (transmissions, gear units among others) and MAN Energy Solutions, MAN Roland (printing machines) had to be taken out.
The result will be a strictly focused truck company. The new combined volume will achieve substantial cost saving. The production of truck gearboxes and of axes have already been put together and have been assigned separately to MAN or Scania. Combined procurement will add additionally to cost saving. And a very important advantage for the new digital age will be the extensive research and development necessary especially for the future autonomous truck driving which – as all experts are convinced – will to come in the not too far future.
From economic point of view this is very sensible and has all chances to be successful. To fulfill the financial challenges orders have already been given to specialized finance institutions. In 2019 the merger is expected to be accomplished.
To serve different market aspects however the brands MAN and Scania will be kept. It will be the job of the new management to develop a promising strategy and to serve both customer groups separately. That’s where the new company can take lessons from VW (e.g. VW, Skoda, Seat etc.)
P.S.: These considerations are based on public information in the media. They are to illustrate theoretical findings. If the used assumptions prove to be different, different conclusions might be logical.
— More? See: Business Organization System Theory
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