Renschler on a roll!
Andreas Renschler and Volkswagen Truck & Bus are really in the news! This has been a long time coming. So much was expected of Renschler when he joined the Volkswagen board on February 1, 2015. The company had waited for the long-serving Daimler executive for a year (he obviously had a restraint of trade in place). For a while, it seemed as though he wasn’t going to make a huge difference … because it was business as usual…
Well, in recent weeks, that’s all changed; Renschler and Volkswagen Truck & Bus have hardly been OUT of the news!
Three major developments are on the table, and all three are hugely significant. First and foremost, there are rumblings about the fact that the German automaker is preparing its truck business for a stock market listing. We’ve heard rumours about this for some time – and now Reuters has confirmed that these rumours are about to become reality.
The news agency has revealed that the Volkswagen Group’s supervisory board has paved the way for a potential initial public offering (IPO) of its truck business as part of a sweeping shake-up (which also included naming a new group CEO and plans to streamline its multiple car brands).
According to Renschler, preparations to tap capital markets, either through an IPO, or selling debt, will take 12 months. “We need a lot of investment and funding,” he said. “We are lifting the (trucks) group to the next level.” Volkswagen Truck & Bus recorded an operating margin of 6,9 percent last year; Renschler is eyeing nine percent by 2025.
The second development is the potential acquisition of a majority stake in United States truckmaker Navistar International Corporation. Volkswagen Truck & Bus spent US$ 256 million (R3 billion) on a 16,9-percent stake in Navistar in 2016. By all accounts, this has been a successful move. “Volkswagen Truck & Bus had ‘significant’ synergies from joint procurement with Navistar last year,” Renschler tells FOCUS.
The third development is an alliance with Hino. This alliance – which will help both truck companies fight off opposition from global truck market leaders Daimler and Volvo – is expected to help both truck companies curtail the high costs of developing self-driving vehicles and new transportation services such as ride sharing.
Reuters reports that the two truck makers will consider cooperating in areas such as diesel and gasoline-electric hybrid engines, connectivity and self-driving technologies. Adding their combined output could offer economies of scale in research and development (R&D) as well as procurement.
“We can join forces and spend R&D money only once, instead of twice or three times,” Renschler told reporters at an event in Tokyo to announce the agreement. “We see potential to save on our budgets and to combine our resources to bring products to market faster than if we were alone.”
He is upbeat about prospects for the alliance. “We are delighted to enter into the alliance with Hino Motors as we are teaming up with one of the leading truck and bus companies, whose presence is especially strong in Asia.
“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 cooperation with Hino Motors will also contribute to our strategy to become the global champion in the transport industry by providing the highest value to our customers.”
Yoshio Shimo, president and CEO of Hino Motors, is equally upbeat. “This agreement was made possible because Hino Motors and Volkswagen Truck & Bus respect each other and share the same aspiration to offer customers the highest value. Hino Motors invented the company slogan ‘Trucks and Buses that do more’.
“To do justice to that, Hino Motors will pursue regional business cooperation and joint utilisation of technologies with Volkswagen Truck & Bus to offer customers better products and, ultimately, customised total support. It will also be a strong tie-up at times of new challenges in the field of transport, due to the rapid growth of e-commerce,” he tells FOCUS.
At this stage, neither company is considering acquiring shares in the other, but who knows what the future holds in this regard?