Vehicle manufacturer’s Latin American subsidiary reported losses
MAN Group, the German manufacturer of trucks, buses and diesel engines, reported a 6% year-on-year decline in order intake in 2015 to €14.4 billion ($16bn).
The company’s commercial vehicles subsidiary MAN Truck & Bus, however, received 9% more orders last year, generating year-on-year growth of 7%. Unit sales increased by 8% to 79,222 vehicles, MAN said in a statement.
“MAN Truck & Bus recorded an operating profit before special items of €205 million ($228.6m) – a significant increase compared with the prior-year period,” the statement said.
However, special items related to restructuring expenses worth of €185 million ($206.3m) reduced MAN Truck & Bus’s operating profit to €20 million ($22.3m).
Although the European commercial vehicles market made a recovery last year, other markets like Russia and Brazil “continue to be of great concern,” the manufacturer said.
Like its other European counterparts, the German heavyweight faced a tough year in South America, with MAN Latin America recording an operating loss of €120 million ($133.4m). Order intake at the subsidiary plunged by more than half, while unit sales almost halved to 24,472 vehicles. Weaker demand and lower volumes in Brazil, MAN said, noting that it had introduced “a large number of measures to counteract this trend.”
“We have initiated or stepped up measures to increase profitability in all divisions. Our goal is to deliver significant results from optimized products and components, as well as procurement,” said Joachim Drees, Chief Executive Officer of MAN SE.
The manufacturer will be looking at reorganising truck production and streamlining administration, Drees noted.
In the Middle East, MAN Truck & Bus saw steady performance in 2015 with “sustained growth in customer demand and customer satisfaction.”
“Despite the year 2015 being challenging for all the sectors of the economy due to the oil prices which are the barometer of growth and development, we performed at a steady level. We have maintained and improved our overall position in the Middle East region in 2015,” said Franz Freiherr von Redwitz, managing director of MAN Truck & Bus Middle East.