Swedish truck maker Scania (SVKBF) has gone from strength to strength as it increases its overseas market share in heavy trucks, recovering from a dip in sales in 2008. In recent years, too, Scania has become famous for its ethanol-fueled trucks, which operate from Stockholm to Sao Paulo.
In truck circles, the key is to beat Daimler (DAI) and Volvo (VOLVY), Europe’s two largest manufacturers. And that way for Scania to do that is follow through with its quasi-merger with Volkswagen (VLKAY) and MAN (MAGOY). Already, Volkswagen has a more than 70 percent voting stake while MAN has more than 17 percent.
According to Volkswagen estimates, joining Scania with MAN could create synergies and costs savings of more than $900 million. Adding Volkswagen to that duo would create Europe’s largest truck manufacturer and see cost savings of $1.44 billion annually.
The European Commission, which must give regulatory approval before closer cooperation between the three can go ahead, kept Volkswagen from appointing three of its top executives to MAN’s board. Formal application for the not-quite merger is expected during the summer.
Scania on its own is doing quite well, having seen a 25 percent jump in sales during its first quarter for 2011 to more than $3.2 billion, something which only adds attractiveness to the three-way deal. The company is in a “silent period” and not speaking with analysts before its next reporting date, July 21.
Biofuel buses on the move
Scania did recently report that the City of Copenhagen’s bus operator bought 100 new biodiesel buses, which follows an order earlier this year from the City of Stockholm’s bus operator for 158 biofuel buses.
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