MAN goes Brazilian

Volkswagen AG sells Brazilian truck manufacturing division to MAN AG

In a move that has caught many observers by surprise, Volkswagen AG has sold its Brazilian truck manufacturing division to MAN AG, with the deal expected to be finalised by March 2009.

Volkswagen Caminhões e Ônibus Indústria e Comércio de Veículos Comerciais Ltda will be purchased by MAN, allowing Volkswagen to concentrate on its core business of light commercial vehicles.

The news was announced by Dr Martin Winterkorn, Chairman of the Board of Management of Volkswagen AG, who says VW will concentrate on its core business, while maintaining an interest in the heavy truck and bus sector through its shareholding in both MAN and Scania.

MAN will continue to run the business under the Volkswagen brand name (VW CO) and will cooperate closely with the management and employees in Brazil.

Established in 1981, VW CO produces trucks and buses designed for use in developing countries and is the largest truck maker in Brazil, and in the 2007 financial year, with 5,000 employees working in Resende and at partner suppliers, built approximately 47,000 vehicles exported to over 30 countries. The product portfolio comprises medium- and heavy-duty trucks as well as urban buses and long-distance coaches.

"This decision is a further logical step for us in the truck business and at the same time brings our Brazilian commercial vehicle activities an attractive perspective in an alliance with a leading truck maker. It is obvious that VW CO and MAN complement each others activities very well and have significant synergy potential. We are convinced that VW CO customers and employees will benefit from this step," says Winterkorn.

Volkswagen and its shareholders will continue to benefit indirectly from the future growth and earnings potential of VW CO via the 29.9 percent stake in MAN.

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