27 Jul 04. Sweden’s Scania yesterday quashed speculation of a possible merger with its German rival MAN, a union which would bring together the world’s fourth and fifth largest manufacturers of heavy trucks.

“We have no immediate need for that type of alliance,” Leif Ostling, Scania chief executive, said. He said that the recent selection of a former Scania executive, Hakan Samuelsson, as MAN’s next chief executive, would not alter his attitude.

Mr Ostling’s remarks came one day after MAN’s outgoing chief executive Rudolph Ruprecht cautioned against a spin-off of the German conglomerate’s commercial vehicles division. Although he downplayed the idea of a full-blown merger, Mr Ostling said looser arrangements, such as Scania’s existing marketing agreement with Japan’s Hino or its component development deal with MAN, would be beneficial.

Scania released buoyant first-half figures yesterday showing a 28 per cent increase in booked orders for trucks and buses. Revenues for the first six months of 2004 were up 9 per cent at SKr27.2bn ($3.6bn). Net income rose 17 per cent to SKr1.8bn while earnings per share advanced from SKr8.12 to SKr9.47.Mr Ostling said much of the demand for new trucks came from western European customers who were using strong demand from eastern Europe for used trucks as an opportunity to renew their fleets. Clare MacCarthy, Copenhagen. (Source: FT)

Comment: Last year the FT reported that MAN was a merger target with VW, but, given the latter’s financial crisis this may no longer be affordable. This piece should focus our readers minds on the Support Vehicle, or lack of, announcement. A number of pundits including BATTLESPACE suggested that Oshkosh would be announced as the winner last week but, answer came there none? The reductions in troop numbers may have refocused the numbers required downwards but a more likely scenario may be a quiet announcement for Oshkosh in the holiday period to avoid flak from the other three producers, watch this space!