India made MAN CLA series will be an important part of its global portfolio
In a strategic move to boost its growth, MAN Nutzfahrzeuge, leading global truck and bus manufacturer is now gunning for growth in the BRIC nations with its ‘Made in India ‘MAN CLA Series’ of trucks.
In a recent media conference, MAN has displayed an interesting line-up of the range of trucks which will be part of its global portfolio. The products showcased were manufactured in Europe, Brazil and India and the company had also announced that very soon it will add another truck which will be developed in China with its partner Sinotruk. MAN’s strategy for the BRIC nations seems to have finally paid off.
While talking to the media about the global economic downturn and the impact it had on the company, Dr Georg Pachta-Reyhofen, Chairman of the Executive Board of MAN Nutzfahrzeuge Gruppe said: “After the severe downswing, the global commercial vehicles industry now finds itself in the recovery phase. Order intake in the triad markets is gradually increasing, the boom in the BRIC countries, though paused briefly for breath but is accelerating once more. MAN Nutzfahrzeuge will further expand its share of the European core market and participate in growth in the emerging economies”.
MAN’s initial move into emerging market started with its foray into India in a joint venture with Force Motors. MAN Force Motors developed the CLA series of trucks, which apart from being sold in the domestic market are also being sold in Asian and African markets. The CLA series will form an important part of global product portfolio, says Dr Pachta.
MAN is quite upbeat about its business in Latin America. In 2008, MAN acquired Volkswagen’s truck business in Brazil. VW has established very strong presence in Brazil leading the truck market for eight consecutive years. The acquisition of VW’s truck business has given MAN a firm footing in Brazil, which is one of the strongest growing truck markets in the world. Now known as MAN Latin America, the company sells nearly 50,000 to 60,000 trucks every year.
Russia is again an important part of MAN’s global strategy. MAN has been successful in establishing itself as the market leader in the imported truck market in Russia. The focus is on construction and long-haul transport vehicles. Whereas in China, MAN has acquired a 25 percent stake plus one share in Sinotruk, a leading manufacturer of trucks in the country. MAN and Sinotruk are jointly developing a truck for Asean markets.
Focus on emerging markets
Despite tough market conditions in Europe and in many other global markets, MAN has pursued its strategy to focus and invest in emerging markets. The reason for this is that in the medium term, the demand for transport in the BRIC countries is expected to rise considerably driven by the expansion in infrastructure. This will result in increased demand for buses and trucks in these countries. In total, these countries represent 40 percent of the world’s population, while their share of global economic performance is currently around 10 percent. Annual growth rates of between five and 15 percent prior to the economic crisis clearly show the direction in which these striving economies are moving.
MAN’s initial move into emerging market started with its foray into India in a joint venture with Force Motors. MAN Force Motors developed the CLA series of trucks, which apart from being sold in the domestic market are also being sold in Asian and African markets. The CLA series will form an important part of global product portfolio, says Dr Pachta.
MAN is quite upbeat about its business in Latin America. In 2008, MAN acquired Volkswagen’s truck business in Brazil. VW has established very strong presence in Brazil leading the truck market for eight consecutive years. The acquisition of VW’s truck business has given MAN a firm footing in Brazil, which is one of the strongest growing truck markets in the world. Now known as MAN Latin America, the company sells nearly 50,000 to 60,000 trucks every year.
Russia is again an important part of MAN’s global strategy. MAN has been successful in establishing itself as the market leader in the imported truck market in Russia. The focus is on construction and long-haul transport vehicles. Whereas in China, MAN has acquired a 25 percent stake plus one share in Sinotruk, a leading manufacturer of trucks in the country. MAN and Sinotruk are jointly developing a truck for Asean markets.
Focus on emerging markets
Despite tough market conditions in Europe and in many other global markets, MAN has pursued its strategy to focus and invest in emerging markets. The reason for this is that in the medium term, the demand for transport in the BRIC countries is expected to rise considerably driven by the expansion in infrastructure. This will result in increased demand for buses and trucks in these countries. In total, these countries represent 40 percent of the world’s population, while their share of global economic performance is currently around 10 percent. Annual growth rates of between five and 15 percent prior to the economic crisis clearly show the direction in which these striving economies are moving.
Product suit
MAN now has a complete range of products to offer from its global product portfolio to suit varying market conditions. For developed markets, it has a complete range of trucks – the TGX, TGS, TGM and TGL. Starting from seven tonnes to 49 tonnes, these trucks will form the top-of-the-line offerings from MAN which will be suited for developed markets. In the next level, it has the VW series of trucks which are more suited for emerging markets like Latin America and to some extent in Africa. MAN has recently started building the TGS and TGX series of heavy duty trucks in Latin America. The company feels that the Latin American market is ready to accept these high-end trucks. The CLA series manufactured in India are best suited for emerging markets. These trucks come with MAN’s engineering, design and quality standards at a price point which is more suited to markets like India, Africa and some Asian countries. This completes the product range of MAN globally. MAN has a product to offer at every price point and for practically most of the global markets. Added to this, MAN is developing a new truck jointly with Sinotruk in China, which the company says will be in the heavy duty higher horsepower segment. Let us look at each of these markets and the products they offer, which will give a better understanding.
India
The truck joint venture MAN FORCE TRUCK Private Ltd produces heavy trucks in India for the domestic market, Asian and African markets. The vehicles in the MAN CLA range are designed for tough, challenging operating conditions. The products in the MAN CLA range include two-axle and three-axle chassis, semi-trailer tractors and trucks ready for bodies to turn them into tippers and concrete mixers with gross vehicle weights of 15 tonnes to 26 tonnes and engine outputs of 220 hp to 280 hp. With a rugged frame, economical engines and 20 inch or 22.5-inch tyres designed for poor roads, MAN is aiming at various markets in Asia and Africa. The trucks are already in operation in Indonesia, Vietnam, Uzbekistan, South Africa and Morocco.
Latin America
With the integration of VW’s truck business, MAN became one of the world’s biggest manufacturers in this sector. By the end of 2010 the heavy vehicle segment will be supplemented by more powerful trucks from the MAN brand, like the TGX range of trucks. The first orders for these vehicles have already been received. With a bigger range of products and the two strong brands, VW and MAN, the commercial vehicle manufacturer is aiming at growth in all Latin American markets. In Brazil, MAN (with VW) has a share of over 30 percent, making it the market leader in heavy-duty trucks. Since 2009, the commercial vehicle production plant in Resende in the state of Rio de Janeiro has belonged to the MAN Gruppe. The plant is a major element of the company’s global production and growth strategy.
The products offered include light, medium and heavy trucks as well as bus chassis for city, charter and long-distance transport. The weight classes range from light delivery vehicles at five tonnes gross vehicle weight to bus chassis to the Constellation trucks. The Constellation trucks range from 13 tonnes to 57 tonnes GVW with 4X2, 6X2 and 6X4 rigid chassis and 4X2 and 6X2 tractors. MAN Latin America sells vehicles in 22 countries, primarily in South America and Africa, where they are operated by mining companies, inter-city bus operators or on big farms.
Russia and Central Asia
In the past few years, MAN Nutzfahrzeuge has been so successful in establishing itself on the Russian truck market that it is now the market leader amongst the importers. The focus is on construction and long-haul transport vehicles. During this period, an extended and highly qualified service network has been built up for MAN’s customers in Russia.
In Uzbekistan in 2009, MAN founded a joint venture for assembly, sales and service of trucks for markets in Central Asia. The joint venture imports components for heavy trucks from the MAN TGA and CLA ranges from Germany and India respectively into Uzbekistan, where they are assembled. The trucks are sold and serviced via a network of independent dealers. The trucks are, for instance,semi-trailer tractors and chassis for construction vehicles. The joint venture, JV MAN AUTO-Uzbekistan, is headquartered in Tashkent, Uzbekistan.
China
In China, MAN and its partner Sinotruk are developing a new truck brand for emerging countries and growth markets. Sinotruk is one of the market leaders in China with a more than 20 percent market share. In addition, the first components from MAN are being integrated as planned into existing ranges from Sinotruk. With this partnership, MAN is participating directly in the expansion of the market leader on the world’s biggest truck market. Sinotruk has also licensed technology from the MAN TGA range, including the engines. The new products will be sold by MAN and Sinotruk.
Europe
In the European markets as well as an ever larger number of neighbouring markets, the most important drivers are the pressure of competition, rising fuel prices, increasing density of traffic and the resultant demand for greater traffic safety. For the transport operator, competitiveness is defined more and more through adherence to deadlines, few down times, and the ability to calculate the costs of their vehicles down to the cent per kilometre.
This is why a closely-meshed service network, good and rapid maintenance, mobility guarantees and precisely calculable maintenance costs are playing an increasingly big role. When operators are deciding on a purchase, they therefore look at suppliers who are able to offer efficient service agreements, mobility guarantees and telematics systems. MAN has analysed the major factors driving the costs of operating commercial vehicles and is already offering its customers a comprehensive programme to reduce the total costs of ownership (TCO).
‘Consistently Efficient’ refers to the trucks and buses of the MAN brand as well as to the services that have been tailored to meet the demands of the various sectors. The combination of the two is aiming at achieving outstanding efficiency over the entire period of the vehicle’s operation. ‘Consistently Efficient’ also includes research and development measures, which enable products and road traffic systems to become even more efficient in future. MAN’s strategic approach thus goes far beyond merely saving fuel.
Global strategy
MAN has clearly established its presence in all major truck markets globally and more particularly in the BRIC nations, which will form an important part of its global strategy. The company has developed a complete range of products at every price point to suit the demands in various developed and developing markets. What will be interesting to see is the way the company will position its products in various markets. The trucks manufactured in Europe are top-of-the-line products which will be more suited for developed markets and will have a niche demand in emerging markets as well.
The trucks manufactured in MAN Latin America are of slightly higher specifications than those manufactured in India. These will be positioned in the middle and upper segment in emerging markets. The CLA series will be positioned as a mass market truck in emerging markets like India, South Africa and some Asian countries. There is new truck which is under development in China. All this will offer MAN the flexibility to offer products in various global markets based on the specific requirements.
