There’s a lot of M&A talk taking place at the Paris Salon d’Auto – for this year, at any rate, Europe’s biggest car show. Two issues are dominating: will Carlos Ghosn choose GM or will he opt for Ford, and will MAN be successful in its bid for Scania?
With the latter deal, VW finds itself in the position of kingmaker. But, increasingly, market rumours point to the German car manufacturer as having been scooping up a fair bit of MAN stock.
What’s going on? Is VW gearing up to make a bid for MAN – no, says chief executive, Bernd Pischetsrieder. He knows nothing of those market rumours, but he does see a "good business case" for MAN and Scania to combine with VW's Brazilian heavy-truck unit. What he doesn’t like is all of the nastiness. “A hostile approach from either side would not be helpful in concluding a deal,” is his reported view.
There can be little doubt that MAN’s punt for Scania is a defensive one. Why bid over the odds, at the top of the market, and at the start of a downturn? No sense in this at all, unless a bigger dog is sniffing at you.
We can see an argument for Paccar linking up with Scania. The same logic applies – albeit less compellingly – with MAN joining the Bellevue family. You’d never discount Toyota – especially as Hino has just tied up a distribution and co-operation deal, and has therefore tidied up its to date rather bashful relationship with Scania.
But VW? It’s the nearly man of the CV biz – not a few years back, it had both Daniel Coppens – ex MB trucks and now heading VW’s French operation - and Stefano Chmielewski – now heading Renault Trucks – on its books. And it went – nowhere.
But its Latin American business is pretty good – and we presume it didn’t ship a Constellation tractor unit over to the recent IAA for the fun of it. Is VW looking to spread its wings?
Hmmm. VW’s LCV range is not bad – and neither MAN or Scania has a LCV product to put on its European forecourts. That’s bad for the dealers come the heavy truck market contractions we expect next year. VW markets its LCV range as much to the retail as to the professional buyer, and extending into a truck dealer network would -potentially - bump its volumes up quite nicely. At the heavy end, VW’s Brazilian range wouldn’t look out of place in a number of coming markets – it has already said that China, India and South Africa are target territories – and being able to draw down on the combined R&D, network and production resources of both MAN and Scania would make a whole lot of sense.
VW rejected MAN's €9.6 billion, or $12.3 billion, offer for Scania on Sept. 18, saying that it did not address Volkswagen's "industrial interest”. It’s going to be interesting to see just what that interest is: is the Kingmaker angling for the throne? Current VW CV boss Bernd Wiedemann is off at the end of this year. His replacement – current production chief Stephan Schaller - may find himself with a bigger job to do than might previously have been thought.