Volkswagen would back U.S. trucks deal, despite dieselgate
Andreas Renschler, member of the Board of Management of Volkswagen AG with responsibility for 'Commercial Vehicles' attends Volkswagen AG annual news conference in Wolfsburg, Germany, April 28, 2016. REUTERS/Fabrizio Bensch
Andreas Renschler, member of the Board of Management of Volkswagen AG with responsibility for 'Commercial Vehicles' attends Volkswagen AG annual news conference in Wolfsburg, Germany, April 28, 2016.
Reuters/Fabrizio Bensch
Volkswagen (VOWG_p.DE) is ready to make an acquisition for its trucks business in North America if the right opportunity comes along, despite the rising cost of its "dieselgate" emissions cheating scandal, the head of the trucks division told Reuters.
Andreas Renschler said his main focus remained on deepening cooperation between Volkswagen's (VW) truck brands - MAN and Scania - a process started last year and aimed at saving up to 1 billion euros ($1.1 billion) a year by 2025 from joint procurement and development of gearboxes, axles and engines.
But he said VW's absence from the lucrative North American trucks market was something he wanted to address over the longer term, as he seeks to build a global business to challenge rivals Daimler (DAIGn.DE) and Volvo (VOLVb.ST).
And he said VW management's support for such a move was as strong as before the company was engulfed in a damaging and costly scandal over cheating emissions tests last September.
"The question is whether you try to find solutions or hide away in the corner," he said. "We are looking ahead."
VW said on Wednesday it was taking another 2.2 billion euro ($2.4 billion) one-off hit in its first half results - on top of the 16.2 billion euros it has already set aside to cover the costs of its emissions test cheating, including fixing vehicles and a settlement with U.S. authorities.
Some analysts had speculated VW might sell or spin off its trucks business to help raise funds, but it made clear in a strategy overhaul in June it had no plans for major asset sales.
First-half earnings figures on Wednesday also signaled the company's recovery may be gaining momentum.
Renschler said in an interview that VW was under no pressure to do a trucks deal in the United States, adding it was important "to pick the right moment to take the right step".
He also declined to discuss potential deals. Analysts have suggested Navistar International Corp (NAV.N) or Paccar Inc (PCAR.O) as possible acquisition targets or partners.
Renschler said a public listing for VW's trucks business was not a top priority at the moment, though all options were being kept open to that end, he added, without being more specific.
The trucks business made 24.4 billion euros of sales in 2015, out of a VW group total of 213.3 billion.
TRUCK FAIR
June's strategy announcement was the start of a transformation at VW that could last 5-10 years, and in which the trucks business would play its part, Renschler said.
He said VW would use the Hanover truck fair on Sept. 21-22 to unveil a new platform to expand digital services for truck drivers and logistics operators.
The company may also announce new financial targets for MAN (MANG.DE), whose profits have been hammered by a downturn in its key Brazilian market, and the higher-margin Swedish unit Scania, Renschler said, declining to elaborate.
VW is seeking to expand cooperation with Chinese partner Sinotruk Hong Kong (3808.HK) and is open to talks about joint projects with other peers, he added.
A former Daimler executive who joined VW in February 2015, Renschler indicated he may not seek a second term when his contract expires in 2020.
"It always depends on how I feel and whether or not I want to work operationally," the 58-year-old said. "I have a five-year contract, I have promised to fulfill it."
