CAN VW BE GLOBAL CHAMPION?

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April 18, 2018 Vol. 15 No. 8

Every conceivable media outlet from the Wall Street Journal and on down, including my own Today’s Trucking, has been sprouting stories this week about Volkswagen’s supposed coming buyout of Navistar. They stem from a comment made by Matthias Gruendler, CFO of VW’s global subsidiary, Volkswagen Truck & Bus. Speaking to reporters in Munich, according to a Reuters report, he said that acquiring a majority stake in Navistar would “make sense at some point.”

But we knew that.

VW is planning to restructure its truck operation and to access capital markets by way of forming a limited public company with a potential stock market listing, according to Reuters. However, Gruendler is reported to have said that a majority share in Navistar could be handled without using the funds from an initial public offering. The price tag, he suggested, would be between 3 and 4 billion. Euros or US dollars, we don’t know.

When VW first bought a 16.6% stake in the American truck-maker back in 2016, since expanded slightly to 16.9%, its ultimate goal was crystal clear. Already owners of Germany’s MAN, Sweden’s Scania, Volkswagen Commercial Vehicles, Volkswagen Brazil, and Rio, it aimed to grow to the point where it could compete head to head with Daimler and Volvo on the world stage. That’s why it hired CEO Andreas Renschler, previously head of commercial vehicles at Daimler. His mandate, though unstated publicly, was to engineer exactly that expansion.

At the IAA show in Hanover, Germany in September of 2016, I asked Renschler about that rather odd 16.6% figure. He cited U.S. regulatory challenges, specifically that anything above 17% would force VW to make an offer for the remaining Navistar shares. It wasn’t quite ready for that step.

LAST WEEK ANOTHER STEP on the path to a much larger global presence was announced, namely a long-term strategic partnership agreement with Toyota’s Hino Motors truck unit in a move calculated to help it compete with the other two global giants. The deal aims to “further explore each other’s capabilities to co-operate in logistics and traffic solution research, existing and new technologies as well as in procurement,” according to the Hino announcement.

“The evaluation of technology co-operation will focus on conventional powertrains, hybrid and electric powertrains, as well as connectivity and autonomous driving systems,” Hino said. “Both partners aim to enhance their respective market positions in the global transportation business and will jointly develop innovative technologies to offer customers the highest value.“

“We are delighted to enter into the [agreement] with Hino Motors as we are teaming up with one of the leading truck and bus companies, whose presence is especially strong in Asia,” said Renschler. “It is an excellent fit in terms of regional footprints and products, but also concerning common ideas on how to shape the future of transportation together. The co-operation with Hino Motors will also contribute to our strategy to become global champion in the transportation industry by providing the highest value to our customers.”

Note that phrase, “global champion”.

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Rolf Lockwood is editor emeritus of Today's Trucking and a regular contributor to Trucknews.com.