Sold to MAN, Brazil’s Volkswagen Truck Has Big Export Plans

Volkswagen Truck and Bus The acquisition of Brazil's Volkswagen Truck and Bus, which owns a factory in the state of Rio de Janeiro, by MAN, announced December 15, in the city of São Paulo, in southeastern Brazil should encourage exports by the automaker, which, as of January 2009, is going to become part of the German company, considered to be among the world's largest in the sector.

"MAN owns 130 points of sales worldwide and we are going to take advantage of that opening to conquer new markets. We are very optimistic regarding the deal. Emerging countries are our vocation, but we are going to look at all the possibilities," said the president at Volkswagen Truck and Bus, Roberto Cortes, during the announcement. "We also aim to expand the brand in markets such as Africa and the Middle East," he added.

"Now, we can open up other potential markets for Volkswagen Truck and Bus' exports and complement our product line," stated the president at MAN AG, Hakan Samuelsson. "This is important to MAN, because we are going to become market leaders in the country, where Volkswagen already maintains a huge distribution network that is internationally renowned for its competence. We are going to manufacture a surplus volume, alongside components and vehicles, and raise the company to an even higher level," he said.

MAN holds a small share of the Latin American market. In Brazil, it supplies diesel-fueled engines to shipyards and turbines, deals that generate average annual revenues of US$ 70 million. "We must grow, and Europe has limited potential," said Samuelsson, upon commenting on the choice of Brazil. Currently, Western Europe answers to 68% of the company's exports.

"We have just spoken with minister Miguel Jorge who, on behalf of president Lula, complimented MAN for the initiative which, according to him, goes to show that the company believes in the country and in its future," said Cortes.

The synergies between the two enterprises were estimated at US$ 70 million per year, beginning on the third year after the acquisition. The Volkswagen brand is going to be maintained, as a brand of the MAN group, as well as the entire operational and administrative structure.

"The deal is going to lead to a natural growth in production and sales volumes. Thus, it is not going to have an impact on the current number of job positions in any way," assured Cortes. The vehicle maker employs 5,000 people under the modular consortium system, which sustains other production-oriented partnerships in the municipality of Resende, in the state of Rio de Janeiro. Of that total, 600 are direct employees.

With revenues of US$ 2.8 billion in 2008, Volkswagen Truck and Bus has managed to expand sales by an average of 30% a year. However, the group does not expect the same rate for 2009. Sales, which totaled 46,000 units last year, should reach 54,000 this year.

For 2009, in the face of the slowdown brought about by the global economic crisis, the company estimates growth of only 5%. In 2010, however, Cortes forecasts that the same growth rates as recorded up until this year should be resumed.

Founded 250 years ago, the MAN AG group is one of the leading European makers of commercial vehicles, engines and mechanical engineering equipment, with annual sales of around 100,000 units, revenues of US$ 21 billion and over 50,000 employees worldwide.

For more than a century now, the company has manufactured trucks and buses, however its portfolio also includes diesel-fueled engines, compressors and turbines, and the organization holds a leadership position in all of its areas of operation.

A traditional manufacturer in Western Europe – which answers to 68% of sales by the company, Eastern Europe and Asia, MAN offers a wide range of options in commercial vehicles, from light, medium and heavy trucks of the TGX, TGM, TGS and TGL series, to military vehicles and bus bodies. The group also makes highway and railway engines, power generators, axles and gearboxes.

A commercial vehicle maker since 1981, and headquartered in the municipality of Resende since 1996, Volkswagen Truck and Bus has led, for six years in a row, the Brazilian market for trucks above five tons of total gross weight.

It is also the largest truck manufacturer in Brazil, and the number one auto exporter company in the state of Rio de Janeiro, present in more than 30 countries. It has remained second in the Brazilian bus sales ranking since 1993, when it launched its first chassis.

Anba

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