Volkswagen Trucking CEO sees rising profit on cost-cutting push

Volkswagen AG’s Traton SE expects profitability at its MAN and Scania brands to improve this year as the German truck maker cuts production costs following the bruising experience of the global supply-chain crisis.

MAN is shifting output from two factories in Austria and Germany to lower-cost Poland, putting it in a better position to break even from the second half, Traton Chief Executive Officer Christian Levin said in an interview.

“With volumes stabilizing and restructuring happening, I expect a lot from MAN,” Levin said, adding that he also sees Scania’s margins improving as supply constraints ease.

Traton has struggled with weaker-than-expected profitability despite selling a record 305,500 vehicles last year. MAN suffered from parts shortages exacerbated by the war in Ukraine, while Scania was hurt by the ramp-up of a new driveline that required sourcing over 50% new components and building relationships with new suppliers, Levin said.

“We were every month expecting to raise production, so we had full staffing and full costs, and then every month we were disappointed by not being able to manufacture the vehicles that we planned,” the CEO said.

Traton, which bought its way into the lucrative North American market with the Navistar International Corp. acquisition, has suffered several setbacks following its listing in 2019. Levin was named CEO in 2021 to make Traton fit for the electric age, improve cooperation among its brands and create a new manufacturing hub in China.

He’s also overseeing development of Traton’s €500 million ($542 million) venture with Daimler Truck Holding AG and Volvo AB to build more than 1,700 commercial vehicle charging points in Europe by 2027.