MAN is on its way to becoming an economically healthy company

Richard von Braunschweig The transformation is a huge challenge for all affected companies in the automotive and commercial vehicle industry, because enormous financial resources are required for the conversion to emission-neutral drives, digitalization and the entry into autonomous vehicle control. Progress costs a lot of money. Companies that, like MAN, have had a rather weak earnings situation for many years and therefore have less capital for investments than some competitors have a major disadvantage here. Even small fluctuations quickly lead to red figures, for example in the event of a change in the order situation or higher material costs. And of course, this cannot go well in the long run, especially not in the midst of a pandemic with disrupted supply chains, as we are all experiencing right now. Therefore, the significant improvement in our profitability is the first essential step towards shaping the transformation ourselves and being able to react accordingly to the challenges of the future. The sale of the plants in Plauen and Steyr was of enormous importance for this first step.

Richard von Braunschweig Yes, they are one important building block on the way to an operating return on sales of eight percent. By making the production network and logistically necessary processes more efficient, we improve the robustness of the company as a whole. MAN is on its way to becoming an economically healthy company – with an improved basis and more solid liquidity. It is the key to a stronger focus on future technologies. The better our economic profitability, the more we can develop our products and services in the direction of electromobility, automation and digitalization. And an essential lever for improving our earnings situation simply lies in a more efficient production of our products. In Krakow, we have now created the opportunity to bring together our great strength, namely high quantities and high variance, as efficiently as possible. 

Richard von Braunschweig With the realignment, we have also achieved a clear assignment and bundling of core competencies. For example, by expanding Krakow into a volume balancing plant and by expanding the component production in Banovce, we can focus on future technologies in Munich and Nuremberg. Above all, these two locations should be able to invest even more innovative power in the areas of electromobility, automation, digitalization, battery technology and alternative drives as competence and development centers.

Richard von Braunschweig The optimization of the production structure has a positive influence on the overall situation of the company, but is of course only one building block of many that are important within the strategic field of becoming a "Robust Company". In addition, there are, for example, the personnel measures agreed with the works council along the demographic curve or the improvement of throughput times in sales. Projects such as the creation of new working environments also play a role – both with regard to the goal of the "Robust Company" and the aspect of the "Strong Team". The further optimization of material and product costs in procurement and development also has a major influence on the improvement of our earnings situation. Overall, MAN is pursuing the goal of improving earnings by around EUR 1.7 billion. As I said, this is the only way we can solidly finance our second strategic thrust – Smart Innovator – and thus the future of our company.

Richard von Braunschweig The transformation is driven by social and political changes that are also forcing our customers to rethink. That is why we are also changing in order to be able to satisfy their needs in the future. The change has three main drivers: On the one hand, the legal requirements for the implementation of the climate targets, as adopted in the Paris Agreement at the end of 2015. We have responded to this by integrating sustainable value creation and decarbonization within the framework of the "Robust Company" field even more closely into our corporate strategy. The increasing sales of zero-emission vehicles is our most important lever to meet the CO2 reduction required by the EU Commission and to avoid penalties as much as possible: For example, we must reduce CO2 emissions in the new car fleet by 15 percent by 2025, and by as much as 30 percent by 2030 – all based on the reference period of trucks registered between 01.07.2019 and 30.06.2020. In addition, the EU Commission wants to significantly tighten the defined target of 30 percent by 2030 again this year – we must therefore prepare for further tension.

Richard von Braunschweig Automation and digitalization are the two other key drivers that are changing the rules of the industry. I would just like to touch on them briefly here: First automated and then autonomous driving is developing rapidly parallel to the alternative drives. In its legislation, Germany has taken the first step worldwide in this area and in the summer of 2021 created a legal framework that allows autonomous motor vehicles to be used in defined operating areas nationwide on public roads in regular operation. This has clearly confirmed the trend and the economic perspective – and thus also MAN's many years of development work. The basis for autonomous driving functions, but also for new business models, is the increasing digitalization of commercial vehicles. Sensors collect ever larger amounts of data, which are evaluated in the vehicle or in an IT infrastructure. To achieve this, the computers in the vehicles must become more intelligent – right down to trucks and buses that can make intelligent decisions independently. In addition, digitalization enables us to connect directly to the customer.

Richard von Braunschweig Earlier we talked about "Strong Team", which I think is at the heart of our strategy. This has always been an excellent thing for MAN: we are a strong team. And if we stand together, we can become even better. MAN has always been able to rely on this special sense of community in the more than 260 years of its history. At this point, I would like to call on all colleagues to continue to get actively involved and get involved – now it depends! Having a good strategy is important, but even more important are the people who bring that strategy to life and implement it. Another major advantage that makes me look to the future with confidence is that MAN does not have to go down this path alone, but has strong partners in the TRATON Group. The cooperation of the brands, for example in engines, powertrains or in the EE architecture, creates synergies that make us all faster and more efficient. 

About the person

Richard von Braunschweig, who has been with the company since 2006, took over as Head of Corporate Development (GS) on 1 September 2021. Previously, the 48-year-old lawyer was head of the GX department, which is responsible for global mergers and acquisitions, investments and licenses. From March 2021 until the sale of the MAN plant in Steyr, Richard von Braunschweig was a member of the Management Board of MAN Truck & Bus Österreich GesmbH.