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Marriage of convenience
Page 28
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• MAN's purchase last week of an 80% stake in Steyr's truck-making interests solves major problems for both companies — and creates some too.
For MAN, the deal provides badly-needed additional production capacity. This year the company expects to increase production by over 24% to more than 30,000 vehicles, but there is a limit to the additional production which can be squeezed from its existing truck assembly plants.
The Steyr acquisition gives MAN immediate access to a production plant with an annual capacity of around 5,000 trucks but which currently produces 3.500. It also provides MAN with a stronger presence in Steyr's traditional markets such as Austria, Switzerland, Greece and Poland. The acquisition should automatically boost MAN's European market share by around 1%.
Transfer assembly
For Steyr Daimler Puch, the sale of an 80% share in its truck-making activities secures the future of its plant. MAN plans to transfer the assembly of around 3,000 M90 17-tonne trucks per year, to manufacture cabs, to build front axles and possibly to continue production of Steyr's 13-litre M3 engine currently under development.
Steyr has borne heavy losses for several years. Though it expects to make a small profit this year, the deal frees it from committing considerable investment in a new tractive unit. The present model is unlikely to meet proposed European emission laws. And MAN has already clearly stated that it will be eventually dropped.
The terms of the deal largely follow the pattern set by the mergers between Leyland Trucks and Daf, and Ford Trucks UK and Iveco.
A new company, Steyr Nutz fahrzeug AG, will be established next month by Steyr Daimler Puch. By January MAN will have acquired 80% of this new company, which represents all Steyr's truckmaking interests. Steyr Daimler Puch will hold a 20% stake.
Neither company will reveal what the deal will cost, but MAN chairman Wilfried Lochte says: "Both parties were happy with the price."
Ernst Pranckl, Steyr Trucks managing director, told Commercial Motor: "It is the intention to move together the two distribution networks in the UK." But Lochte is less definite about MAN's plans for the products in the UK. "But we shall behave in the UK, Holland and Belgium is something that remains to be seen," he insists. "We do not intend to have a two-badge strategy in these countries."
The future for Steyr Trucks in Britain will be decided at a board meeting on 26 September. Just 21 months after announcing its intention to enter the UK market (CM 21-27 January 1988), Steyr appears likely to be swallowed up by the MAN dealer network.
Steyr Trucks parts manager John Ruane says the company has appointed 17 dealers in the UK, and two more are imminent. So far, the company has sold around 100 trucks in Britain, but orders suggest the company could deliver upwards of 200 by the end of the year, to reach break-even on trading. Meetings in the UK betwel representatives of MAN from Germany, Steyr from Austria Lohnro (which currently handles MAN imports in the UK) and Steyr Trucks UK w take place in the first half of next month to discuss the plans for distribution of truck in Britain.
Commitment
Whatever happens in the UK Steyr has made a commitmei to complete changes to the d tribution network by the end October.
MAN insists that there Ml be no duplication of vehicles between the two companies, though it plans to continue w the Steyr brand name, especially in markets where Step is strong.
While the Steyr tractive in is unlikely to continue in production, MAN has a great dt of respect for the company's medium-range cab (used by ERF in the ES6 — a deal which will continue), and a spokeman for MAN says: "V think we can integrate this c into our range." It seems uk the cab will be fitted to MM G90 range (between 6-11 toi nes) which currently sports ageing Volkswagen LT-style cab.
Steyr's military trucks bus ness will be included in the o quisition, but the company's terest in four-wheel-drive ye des will not. CM understan the companies are discussini Steyr's bus interests.