MAN SE announced on July 15 that it has signed long-term strategic partnership agreements with Sinotruk (Hong Kong) Ltd., a Hong Kong listed subsidiary of China National Heavy-Duty Truck Group Corp. (CNHTC) since 2007. The partnership will bring together advanced technologies and engineering know-how developed by MAN in Europe and Sinotruk’s existing manufacturing platform, local expertise and extensive sales network in China, MAN said in a company press release.
Under the agreements, MAN will invest 560 million Euros in Sinotruk to become Chinese heavy-duty truck maker’s strategic shareholder owning 25 percent plus one share of its capital. The total equity investment is to be realized by purchasing Sinotruk’s ordinary stock, as well as by a capital increase. The price represents a 21 percent premium to the 60-day trading average, according to the press release. Through this equity investment in Sinotruk, MAN will be able not only to participate in the future growth of Sinotruk, but also to gain a sustainable foothold in China, which is the world’s largest and fastest growing truck market.
As part of this high-powered cooperation, MAN will license its TGA truck, engine, chassis and axles technologies as a basis for the production of a new truck series, as well as provide ongoing technical and management support to assist with production and localization efforts. This series will be manufactured at Sinotruk’s existing plants in China and will be “superior to existing products in the marketplace in terms of quality and environmental compatibility, but competitively priced”.
“Sinotruk and MAN will work together closely to shape our future and maintain our position as one of the leading heavy truck manufacturers,” Ma Chunji, chairman of Sinotruk, was quoted as saying in the press release.
To this new cooperation between the two heavy-duty truck makers, Håkan Samuelsson, CEO of MAN SE, commented: “This important partnership is based on the good relationship we have had with Sinotruk for many years. MA’s investment in Sinotruk lays the foundation for the joint development of a new heavy truck series tailored to emerging markets. We look forward to actively supporting Sinotruk’s ongoing positive development and strengthening its leading position in China.”
Sinotruk’s parent company CNHTC, headquartered in Jinan, Shandong Province, built China’s first heavy-duty truck in 1960 and purchased the truck technology of MA’s subsidiary Steyr in 1984. The company’s major products include cargo trucks and truck chassis with GVW of over 14 tons, semi-tractor trucks with trailing capacity of over 12 tons, tipper and special-purpose truck chassis, heavy-duty engines, as well as parts and components.
In 2008, CNHTC produced and sold 106,377 and 111,947 units of trucks, up 6.16 and 11.26 percent from a year earlier, according to CBU-Autostats. In the first half of this year, its heavy-duty truck sales reached 68,098 units with market share of 26.26 percent, as revealed in a company business forum held on July 11.
Based in Germany, MAN is the world’s third largest heavy-duty truck manufacturer with 250 years of history. MAN supplies trucks, buses, diesel engines and turbomachinery, as well as industrial services and holds leading market positions in all these areas.
MAN came to China for business development as early as in 1898. It now mainly produces trucks and diesel engines in the country. Its total income in China last year amounted to 617 million Euros, an increase of 22 percent from 2007, according to a report in China Securities News.