Volkswagen is every bit Public Enemy Number One that John Dillinger ever was. The Environmental Protection Agency has the German automaker firmly, and deservedly, in its crosshairs over basically lying to the world about the diesel emissions spewing from its passenger cars.
The company’s emissions scandal – for which the Department of Justice is after nearly $50 billion in penalties and fines – seemed to quell growing public rumors that Volkswagen was all but sure to make a run at commercial trucking in the U.S., either through an acquisition or a grassroots campaign with MAN or Scania.
Monday, Volkswagen Trucks boss Andreas Renschler channelled his inner Mark Twain, hinting that any reports of the death of VW’s trucking aspirations are greatly exaggerated.
Renschler said in an interview in Germany the company is eying expansion in both the U.S. and China, either through acquisition, partnerships or by issuing a public offering for VW’s truck division.
Volkswagen’s truck unit isn’t involved in the emissions scandal but the billions of dollars from the fallout – which could hit north of $80 billion factoring in recalls, buybacks, repairs and make-goods – will come out of the same account. But, Christian Stadler, a professor of strategic management at Warwick Business School, says VW distancing its truck business from the embattled car business could, in the long run, be beneficial to Volkswagen.
“This is an interesting decision for Volkswagen, as keeping hold of the truck business might help it smooth out what is a tough period on the car front following the emissions scandal,” he says. “Volkswagen is too busy dealing with the emissions scandal, so by the truck division going independent, it might bring in the capital it requires.”
Since the truck market is going through a difficult period, Stadler says acquisitions “would be cheaper,” and Paccar and Navistar were clearly still viable targets.
“If Volkswagen wants to gain some market share in the U.S., these are two which might be for sale,” he adds.
Last summer, Daimler’s commercial vehicle boss Wolfgang Bernhard – a VW ex-pat – let slip the trucking world’s worst kept secret; that VW would make a bid for Paccar in 2016. At the time Volkswagen denied the rumors, calling them “rubbish“.
Yet here we sit seven months later in an open discussion with Renschler noting VW has an interest in the U.S. truck business and, from a business standpoint, such a venture could be very beneficial for a company whose largest business segment is about to be sent through the wood-chipper stateside.
And to think, it’s only February. With 10-plus months of potential rumors and more speculation, VW’s potential entry in the U.S. market will be one of the biggest headlines hanging over the industry this year.