Fifteen years after entering India, German commercial vehicle major and one of the Europe's leading truck makers MAN has decided to exit the market. There are multiple reasons are behind this decision.
A focus on fewer markets globally with premium products is a key one and the unexpected level of competition in the Indian trucking industry could be another. Autocar Professional first reported about MAN's plan to exit India, on 11th July.
The entity, MAN Trucks India, will continue to exist but as an R&D centre. Its engineers will now work on global projects only. "The manufacturing, sales and exports of the CLA range will be stopped after the existing customer orders are completed. MAN will have aftersales as an active function for the next five years as part of our focus to provide support to our customers," says a company spokesperson. The MAN Trucks India team consists of 250-300 members. Around 200 of them have been offered VSS (Voluntary Severance Scheme).
MAN is "actively seeking a third party" to sell its manufacturing plant in Pithampur, Madhya Pradesh. We learn that at least three parties have expressed interest in acquiring the plant. "MAN is extending support to all employees impacted due to this development. The India management has taken appropriate measures, besides compensation, like counselling, outplacement services and financial planning to support the affected team members during the transition," the spokesperson says.
MAN entered India through a collaboration with Force Motors in 2003. The collaboration turned into a joint venture in 2006. The JV partner's stake was bought over in 2012 for the German to start a solo drive. In May 2017, the company had introduced its latest EVO range equipped with a BS-IV engine.
The announcement by MAN comes a little over a year after another global OEM, General Motors (GM), made a similar move. In GM's case, one of its two manufacturing plants continues production, but for exports only.
India indeed is a promising market, but it can also be too challenging a market for some.