Thursday 17th Aug 2017 - Logistics & Supply Chain

How VW plans to make 200m euro supply chain savings

German motor manufacturer Volkswagen expects supply chain saving of 200 million euros a year from a takeover of MAN, the group has revealed with the launch of its formal bid for the truck maker.

The bid itself is hardly a shock, Volkswagen has been buying MAN shares for some time and on 9th May announced that it has acquired MAN shares accounting for more than 30 per cent of the voting rights. Under German company law, it is now making a mandatory public offer to all third party shareholders in MAN SE. The offer is worth 95 euros per share.

The move will open the way for greater co-operation between MAN and Scania, the Swedish truck maker. VW owns 71.8 per cent of Scania – while MAN owns 13.5 per cent.

And that means a major shake-up for supply chains in the commercial vehicle industry.

The intention is to maintain the two brands, but VW says it has identified a broad spectrum of synergies from the combination identified in the areas purchasing/procurement, research & development and production.

Last year, MAN and Scania said they were exploring co-operation in a number of areas including gearboxes, rear axles and hybrid components.

VW reckons first portion of synergies of at least 200 million euros a year is achievable mainly in the area purchasing/procurement without significant implementation costs.

Beyond that it sees significant additional benefits as it turns the two businesses into an integrated commercial vehicles group.

Exactly what that will mean for supply chain partners will become clearer when VW’s offer closes on 29th June.

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