Depending on the perspective, the recent revelations concerning Volkswagen and their not-so-clean-diesel cars was either (a) an unmitigated environmental disaster that perpetrated a massive fraud against the public or (b) a competitor’s dream as an automobile titan was rendered vulnerable. Regardless, Volkswagen was left reeling and in need of massive reform to address this new reality.
In respond to this crisis, Volkswagen is, for a huge corporate conglomerate, rapidly reorganizing its corporate structure. One of the changes has been to accelerate the independence of its 12 automaker brands, including their heavy truck lines. Volkswagen heavy trucks division is a rare bright spot. The heavy truck business is composed of the recently acquired MAN and Scania brands plus the namesake Volkswagen trucks and buses
This new company is intensifying cooperation between the Scania and MAN brands on research, development, finance, personnel and logistics. These two combined brands control 30% of the Western European commercial truck market. Additionally, Volkswagen heavy-trucks division is planning an aggressive global expansion campaign in the Chinese and North American markets.
However, expanding into new trucking markets is not easy. Each region heavily regulates the trucking industry which influences and guides developments. Therefore, the only cost effective expansion strategy is via acquisitions and partnerships with local companies. To facilitate this strategy, the company is considering an IPO.
The North American market is the largest untapped market for Volkswagen trucks. By comparison, Volvo and Daimler control significant market shares through their own local brands. To complicate matters further, the North American market is experiencing a slow-down in commercial truck sales after several years of steady growth. Volkswagen faces significant hurdles and it is trying to tackle them simultaneously. VW heavy trucks chief said on the matter, “We want to be industry leaders” in customer-oriented innovation, presence and profitability. Volkswagen has their hands full but it appears committed to the plan.