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Traton: Building a Global Commercial Vehicle Empire
Introduction & Episode Roadmap
On a crisp October morning in 2024, Christian Levin stood before investors at Traton's Capital Markets Day in Munich, a city that had become the nerve center of Europe's commercial vehicle consolidation story. Behind him, four logos—Scania, MAN, International, and Volkswagen Truck & Bus—represented nearly two centuries of accumulated industrial heritage now united under a single corporate roof. The company he led had grown sales revenue to €47.5 billion in 2024, with an adjusted operating return on sales of 9.2%, exceeding the strategic margin target of 9%.
The central question that had animated Volkswagen's boardroom for two decades remained as relevant as ever: How do you transform a collection of proud, independent truck manufacturers into a unified global powerhouse capable of challenging Daimler Truck and Volvo for supremacy in an industry undergoing its greatest transformation since Rudolf Diesel first ignited compression in a Bavarian laboratory?
As of December 31, 2024, Traton employed around 105,000 people in its commercial vehicle brands. Three groups dominate the trucking sector in western countries in terms of turnover: Daimler Trucks, followed by Traton and Volvo Trucks. Daimler Trucks, which owns Mitsubishi/Fuso trucks as well as US-based Freightliner, Western Star and Rizon, is the number one trucking company globally.
This is a story of roll-up strategy executed across continents and decades, of managing the delicate tension between brand autonomy and operational synergies, and of a €2.6 billion bet on the electrification of heavy transport. It's a story that begins not in a German boardroom, but in the ironworks of the Ruhr Valley, on the crop fields of Virginia, and in a Swedish railway wagon factory—three distinct origin myths that would eventually converge into the commercial vehicle giant we see today.
The Building Blocks: Origin Stories of the Constituent Brands
MAN: From Iron to Innovation (1758–2000s)
In the industrial heartland of Germany, the story of MAN begins with the glow of molten iron. MAN's history is a history of mergers and cooperation initiatives. Time and time again, partnerships and takeovers allowed the company to make decisive progress in the commercial vehicle business.
The tale properly starts with a letter—the kind of correspondence that would seem quaint in today's era of instant messaging, but which in 1898 represented the epitome of corporate diplomacy. It all started with an exceptionally polite letter. On April 3, 1898, Anton von Rieppel sat down at his desk to write a letter. He wrote it himself—the matter at hand was too important to dictate it to his secretary. In fact, the letter was so important that he even wrote it on a Sunday, the sacred day of rest in deeply religious Bavaria. And, of course, at Maschinenbau-Actiengesellschaft Nürnberg, of which Anton von Rieppel was the director. "It is this thought that brings me to inquire in this private, unsanctioned manner," von Rieppel wrote, "whether you may be inclined to give further consideration (...) to a merger between the two companies."
The finely worded lines were addressed to Heinrich von Buz, director of Maschinenfabrik Augsburg AG, 150 kilometers away from Nuremberg. The direct, polite letter was a success: that very year, the two companies merged into one, which soon became known as Maschinenfabrik Augsburg-Nürnberg AG all over the world. Not long after that, commercial vehicles produced by M.A.N.—the company's distinctive abbreviation was coined in 1908—were transporting goods and people around the globe.
But the true innovation that would define MAN's place in industrial history had occurred five years earlier, in a laboratory just down the road in Augsburg. In his engine, fuel was injected at the end of the compression stroke and was ignited by the high temperature resulting from the compression. From 1893 to 1897, Heinrich von Buz, director of Maschinenfabrik Augsburg in Augsburg, provided Rudolf Diesel the opportunity to test and develop his ideas.
Engineer Rudolf Diesel designed the first experimental diesel engine in 1893 in collaboration with Maschinenfabrik Augsburg, which later became MAN. In 1897, this prototype gave rise to the first functional diesel engine. The partnership between Diesel and what would become MAN represents one of history's most consequential collaborations—the diesel engine would go on to power global commerce, from ocean-going vessels to the long-haul trucks that still dominate highways today.
The technical innovation didn't stop there. In 1924, MAN presented the world's first truck with diesel direct injection, a leap forward that dramatically improved fuel efficiency and established the company as a technological leader. The 1971 takeover of BĂĽssing's truck and bus division further consolidated MAN's position in the German market.
For investors evaluating Traton today, MAN's lineage matters because it established the engineering DNA—particularly in diesel technology—that remains core to the group's competitiveness. The brand's deep roots in Germany, however, also explain its most significant structural challenge: a production footprint in one of the world's highest-cost manufacturing environments.
Scania: Sweden's Truck Champion (1891–2000s)
If MAN's origin story is one of industrial titans exchanging polite letters, Scania's begins with the pragmatic Swedish response to declining railway demand.
The older of the two, Vagnfabriks-Aktiebolaget i Södertelge (Vabis), founded on December 11, 1891 in Södertälje, initially built wagons for the expanding rail network. In 1897, the "Vagnfabrik" (wagon factory) began making vehicles and engines, and presented its first truck at the Stockholm Automobile Exhibition of 1903.
Fate brought Swedish companies Vabis and Scania together for the first time in 1901. That same year saw Sweden host its first automotive exhibition. Södertälje-based Vabis and Malmö-based Scania both presented their first passenger car prototypes in the Swedish capital, Stockholm. We don't know for sure if the two companies' employees discussed their experiences or maybe even had lunch together during the event. But we do know that they definitely did this ten years later—regularly, in fact. This is because the two Swedish vehicle manufacturers merged in 1911 under the management of Scania's director Per Alfred Nordeman to form a new company called Scania-Vabis.
What makes Scania's evolution particularly remarkable is the role of the Wallenberg family—Sweden's most influential industrial dynasty. After some economic difficulties in 1921, new capital came from Stockholms Enskilda Bank owned by the Wallenberg family, and Scania-Vabis became a solid and technically, high standing, company.
The Wallenberg connection would prove fateful decades later when Volkswagen sought to acquire Scania. But in the intervening years, Scania built something even more valuable than financial backing: a manufacturing philosophy that would become the template for Traton's entire integration strategy.
The "Bygglådan principle"—Swedish for "construction kit"—revolutionized how commercial vehicles could be manufactured. Scania has been employing the Byggladan principle since the 1930s. Back then, the cylinders were the same in all engines. The greatest advantage of the Byggladan principle is that for every intended vehicle use, a custom-fit vehicle can be built, regardless of the number of units. "Even if a customer only needs one very specific truck, we can assemble it from existing modules," Holmlöv explains proudly. This gives Scania the capability of producing niche products and short series runs competitively.
In 1969, Scania merged with Saab to form Saab-Scania, creating a Swedish industrial powerhouse. But corporate marriages don't always last. After 26 supremely successful years, Scania split from Saab in 1995. This was driven by industry policy decisions taken by Saab and US automotive manufacturer General Motors, who joined Saab-Scania in 1989. It also meant that Scania became an independent company.
That was not the only consideration favouring a tie-up with the company. Scania was one of the top truck manufacturers in Europe, and was regarded as the most profitable brand in the industry. Innovative, and a leader in the development of economical, low-emission engines, the company's product range included heavy trucks of 16 tonnes capacity and more, buses and coaches, as well as ship engines and industrial motors.
This reputation for profitability would make Scania the crown jewel in Volkswagen's truck consolidation strategy—and the hardest asset to fully acquire.
Navistar/International: American Icon (1831–2010s)
The American chapter of Traton's story stretches back further than any European predecessor—all the way to Cyrus McCormick's Virginia wheat fields.
Cyrus successfully demonstrated his Virginia Reaper in 1831, that very same year. The machine replaced six to two dozen farm hands—and jump-started the process of agricultural mechanization.
Navistar International Corporation, leading American producer of medium- and heavy-duty trucks and for many years a major manufacturer of farm and construction equipment. The company is a direct descendant of the business activities of Cyrus McCormick, particularly his invention of the mechanical reaper in 1831. Headquarters are in Chicago. International Harvester was incorporated in 1902, merging McCormick Harvesting Machine Company with four smaller machinery makers. Shortly after, the company pioneered in motorized trucks by introducing high-wheeled "auto-wagons" for farmers.
Subsequent technological development at International Harvester went beyond agricultural machinery. Talented engineer Ed Johnston designed the company's first gasoline engine (1904) and put wheels under both its first automobile (1907) and its first truck (1909). The pickup truck named "Auto-Wagon" had a load capacity of almost 400 kilograms and was the starting point for the International Truck brand, under which Navistar sells its flagship vehicles today. International Harvester set a milestone in 1915 with the company's first school bus. Today, the yellow buses remain at the heart of the US school system as its logistical footing.
But the American story also contains a cautionary tale about industrial decline. After a devastating 172-day strike in 1979–80 that left its major product areas open to competitors, Harvester encountered economic difficulties and began cutting back its manufacturing and marketing operations in a number of overseas countries. In 1982 the company sold most of its American construction-equipment business, and in 1985 it disposed of most of its farm-equipment line at home and abroad to the J.I. Case subsidiary of Tenneco Inc. Under the terms of the latter sale, Harvester was obliged to change its name, which it did in 1986 to Navistar International Corporation.
Until 1986, Navistar was known as International Harvester, a leading manufacturer of agricultural and construction machinery, with 47 manufacturing plants comprising 38 million square feet. Years of dramatic financial losses, however, forced the company to sell off these primary businesses to focus on the production of diesel trucks, a move that necessitated the lay off of thousands of workers and resulted in a reduction in sales by more than 50 percent.
The 2000s and 2010s brought further challenges, particularly around emissions compliance that led to costly engine problems and market share losses. By the time Volkswagen came calling, Navistar was a company with an iconic brand and valuable North American market position, but one that had been humbled by decades of strategic missteps.
The three origin stories—MAN's engineering heritage, Scania's manufacturing philosophy, and Navistar's American distribution network—would provide Volkswagen with the building blocks for a global truck empire. But assembling those blocks would take nearly two decades of patient maneuvering.
Volkswagen's Truck Ambitions: The Consolidation Play (2006–2015)
The Strategic Vision
In the mid-2000s, Volkswagen faced a strategic reality that demanded action. As a passenger car giant, the company lacked meaningful scale in commercial vehicles—a market where Daimler and Volvo had established commanding positions. VW's brands MAN and Scania are market leaders in Germany, Europe and South America (especially Brazil as this was where VW originally invested in heavy-truck), however, they are lacking in North America and Asia, both important markets where 60% of the global sales happen.
The logic was straightforward: heavy trucks operate differently from passenger cars in almost every respect—different technology cycles, different regulatory environments, different customer relationships. But there was one area where synergies were meaningful: procurement. Furthermore, as Volkswagens CFO Frank Witter stated: "The cars and truck segments only have synergies in procurement. Therefore, a separation of the operations makes sense."
Acquiring Scania
Volkswagen's courtship of Scania stretched across more than a decade, reflecting both the complexity of the target and the strategic patience of the acquirer.
Volkswagen Aktiengesellschaft paved the way for the strategic restructuring and expansion of its truck business in April 2000 when it acquired 18.7 percent of the shares and 34 percent of the voting rights in Scania AB. The two companies were linked by a long-standing partnership. Scania had been Volkswagen's main importer in Sweden since 1948.
But VW wasn't the only suitor. The acquisition, for US$7.5 billion (60.7 billion SEK), would have created the world's second-largest manufacturer of heavy trucks, behind DaimlerChrysler. The cash for the deal was to come from the sale of Volvo's car division to Ford Motor Company in January 1999. The merger failed, after the European Union disapproved, announcing one company would have almost 100% market share in the Nordic markets.
When Volvo's bid collapsed, it created an opening for Volkswagen—but also left a messy shareholding structure that would take years to untangle. In September 2006, the German truckmaker MAN AG launched a €10.3bn hostile offer to acquire Scania AB. Scania's CEO Leif Östling was forced to apologise after comparing the bid of MAN to a "Blitzkrieg". MAN AG later dropped its hostile offer, but in January 2008, MAN increased their voting rights in Scania to 17 percent.
On October 12, 2006, MAN SE increased its takeover bid to Scania by 400 million euros, bringing it to a total of 10 billion euros. At the same time, it bought additional shares, giving it control of about 14% of Scania AB. After the partners also rejected the revised offer, MAN withdrew the offer in January 2007, and began talks about a possible alliance between the three companies.
The breakthrough came through negotiations with Sweden's industrial aristocracy. In 2007 Volkswagen increased its share of the voting rights to 37.4 percent, becoming the second major shareholder in Scania alongside the Wallenberg family of Swedish industrialists. An agreement with the Wallenbergs to acquire their Scania shares—held through Investor AB and various charitable foundations—was reached in March 2008. With the approval of the European Commission, in July 2008 Volkswagen Aktiengesellschaft increased its share of the voting rights to around 69 percent and integrated Scania as the ninth independently operating brand within the Volkswagen Group.
The family sold its stake in Swedish truck maker Scania AB to Volkswagen AG in 2008, ending almost a century of ownership.
Full control came in 2014. On February 21, Volkswagen announced a public offer to the shareholders of Scania to tender all shares in Scania to Volkswagen at a price of SEK 200 in cash per share. On 13 May, Volkswagen reached over 90 percent of the shares and 5 June was the last of trading Scania shares on the stock exchange. Scania becomes a wholly owned subsidiary of the Volkswagen Group. The total investment to acquire Scania fully reportedly exceeded €10 billion—a staggering sum that reflected the brand's profitability and strategic value.
Acquiring MAN
While securing Scania required negotiating with Swedish industrialists, acquiring MAN demanded a different kind of corporate chess.
In 2000 Volkswagen contributed 3 billion German marks to Swedish Scania AB, controlling 34% of the voting rights and holding 18.7% of the share capital. In 2006, MAN SE presented Volkswagen and the other Scania shareholders with a takeover offer in the amount of 9.6 billion euros. A few days later, Volkswagen rejected the offer, and broached the subject of a potential truck alliance for the first time. In October 2006, Volkswagen AG announced that it had acquired 15% of MAN SE, but did not intend to take over.
The tactic was brilliant in its simplicity: Volkswagen blocked MAN's hostile bid for Scania by becoming a significant shareholder in both companies simultaneously. This created a web of cross-holdings that made any independent consolidation impossible without Volkswagen's consent.
Volkswagen acquired further MAN SE shares at the beginning of May 2011 and was obliged to submit a takeover offer, which it did at the end of the same month. Volkswagen held the majority of voting rights at 55.9% at the end of the acceptance period. As part of further share purchases, Volkswagen announced voting rights of 75.03% on June 6, 2012. Due to the resulting statutory blocking minority of 25%, Volkswagen was given sole control of MAN SE.
The investments totaled billions of euros across multiple transactions, ultimately giving Volkswagen the control necessary to begin the integration work.
For investors, the Scania and MAN acquisitions illustrate both the opportunities and challenges of roll-up strategies in concentrated industries. The deals delivered scale and geographic diversification, but required nearly two decades and massive capital deployment. The question that would define the next phase: could Volkswagen actually integrate these proud, independent brands?
Creating Traton: The Holding Company Emerges (2015–2019)
Formation of Volkswagen Truck & Bus
By 2015, Volkswagen controlled both Scania and MAN, but the companies operated independently with minimal coordination. The next phase required a structural reorganization.
In 2015, Volkswagen AG creates Volkswagen Truck & Bus GmbH to bundle its brands Scania, MAN and Volkswagen Caminhões e Ônibus. In 2016, the digital brand RIO was added and in 2018, Volkswagen Truck & Bus became TRATON GROUP.
At the beginning of July 2015, the shareholders' meeting of Truck & Bus GmbH decided to rename it Volkswagen Truck & Bus GmbH, a company based in Braunschweig. Andreas Renschler, at that time responsible for the commercial vehicles on the board of management of Volkswagen AG, became CEO. Martin Winterkorn was appointed as chairman of the supervisory board.
The timing was notable: just months after this reorganization, the Dieselgate scandal erupted at Volkswagen's passenger car division. The crisis consumed management attention and capital across the group—but also reinforced the logic of separating the truck business, which operated with different engine technology and faced different regulatory dynamics.
The Navistar Partnership
While consolidating European assets, Volkswagen kept one eye on the prize it lacked: meaningful North American presence.
In 2016, Volkswagen Truck & Bus acquired a 16.6% stake in U.S. commercial vehicle maker Navistar International Corporation. Both companies entered into a strategic technology and supply cooperation initiative and established a purchasing joint venture.
A strategic alliance has been in place between TRATON and Navistar since 2017, with both partners benefiting from the considerable value generated by enhanced purchasing power and the integration of new technologies.
The partnership structure allowed both companies to test the relationship before committing to a full merger—a "try before you buy" approach that would prove valuable when negotiations intensified.
Rebranding and IPO
The rebranding to Traton in 2018 marked a symbolic shift. On June 20, 2018, Volkswagen Truck & Bus was announced as being renamed Traton, effective from the third quarter of 2018. The name itself carried meaning—TRAnsformation, TRAnsportation, TRAdition, TONnage, and always "ON."
The IPO, originally planned for late 2018, faced multiple delays. Market conditions deteriorated, and Volkswagen postponed. Stockholm, June 28, 2019 – Nasdaq (Nasdaq: NDAQ) announces that the trading in TRATON SE's shares (short name: 8TRA) will commence today on the Nasdaq Stockholm main market. TRATON belongs to the industrial sector and is the 33rd company to be admitted to trading on Nasdaq's Nordic markets in 2019. The Company will be dual listed at Frankfurt Stock Exchange. TRATON is a subsidiary of Volkswagen AG and a leading commercial vehicle manufacturer worldwide with its brands MAN, Scania and Volkswagen Caminhões e Ônibus, and RIO.
Munich, June 27, 2019 – The placement price for the shares of TRATON SE ("TRATON") has been set at EUR 27.00 per share. In total, 57,500,000 existing ordinary bearer shares from the holdings of Volkswagen AG are being placed with investors (including 7,500,000 shares to cover over-allotments).
The gross proceeds from the sale of the TRATON shares would correspond accordingly to EUR 1.55 billion. The offering would value TRATON's entire share capital at approximately EUR 13.5 billion.
The IPO valued Traton at approximately €13.5 billion—a multiple of what Volkswagen had invested, but below some analyst expectations. More importantly, the public listing provided the currency Traton would need for its next major move.
Completing the Empire: Navistar Acquisition (2020–2021)
The pandemic year of 2020 seemed an unlikely moment for major M&A, but Traton saw opportunity in the disruption.
Traton finalized the nearly $3.7 billion deal in November 2020 to acquire all outstanding common shares of Navistar—that it did not already own—for $44.50 per share in cash. Navistar stockholders approved the sale on March 2.
The path to that final price was contentious. Traton's initial unsolicited offer faced pushback from activist shareholders. Carl Icahn and Mark Rachesky pushed for better terms, ultimately extracting $800 million more than Traton's opening bid.
MUNICH, July 1, 2021 – The TRATON GROUP is welcoming a new member of the family: Navistar. The certificate of merger that was submitted today successfully completes the closing and means that the merger between the US commercial vehicle manufacturer and TRATON is complete. The TRATON GROUP now holds all Navistar common shares. Navistar is to be delisted and deregistered with the SEC during July 2021. The addition of Navistar as the newest member of the TRATON GROUP marks the beginning of a new era. "Today is a sensational day for the TRATON GROUP and for our new colleagues at Navistar joining the global TRATON family."
Combining TRATON's leading position in the European and South American markets with Navistar's strong presence in North America lays the foundation for a premier company with a global reach and complimentary capabilities. The purchase price was approximately 3.7 billion USD.
Navistar International Corp. announced it merged with Munich-based Traton Group in a transaction valued at $3.7 billion, finalizing a strategic alliance launched in 2017. Traton now has a firm foothold in the United States, considered the biggest source of profits for the truck industry.
The strategic logic was compelling. The third-largest Class 8 manufacturer (behind Freightliner and the combined brands of Paccar), International held a 12.6% market share for 2022. The acquisition finally gave Traton what it lacked: a meaningful position in the world's most profitable truck market.
GrĂĽndler noted the smooth, quick "impressive work on both sides of the Atlantic" to push ahead on the merger despite the obstacles presented by the COVID-19 pandemic.
In September 2024, Traton completed the integration symbolically by rebranding its U.S. subsidiary. On September 25, 2024, Navistar announced its rebranding to International Motors, LLC, effective October 1, 2024. The company also introduced a new logo and corporate identity as part of the transition.
For long-term investors, the Navistar acquisition transformed Traton's geographic risk profile fundamentally. Where previously the company derived the vast majority of profits from Europe and South America—regions with slower growth and intense regulatory pressure—it now had exposure to North American trucking, historically one of the most profitable markets in global commercial vehicles.
MAN Restructuring and Integration (2020–2024)
While the Navistar integration proceeded smoothly, MAN required a different approach—one involving painful restructuring in the heart of Germany's industrial base.
In February 2020, Traton announced that it intended to absorb MAN SE by merging to simplify Traton's overall structure. As a result of the merger, MAN Truck & Bus SE, Scania AB, and Volkswagen Caminhões e Ônibus were to become wholly owned direct subsidiaries of Traton. The merging of the MAN company into Traton was completed in August 2021.
As a result of this merger, MAN Truck & Bus SE and Scania AB, in particular, will become wholly owned direct subsidiaries of TRATON SE. This enables TRATON to make the overall structure of the Group even more efficient, implement decisions more quickly, and reduce administrative expenses.
The structural simplification was straightforward; the operational improvement was not. MAN's profitability chronically lagged Scania's, despite comparable technology and shared heritage in German engineering. The issue was structural: MAN's production footprint concentrated in high-cost Germany, combined with a product lineup that included less-profitable medium-duty trucks.
The 2024 results demonstrated ongoing challenges. MAN Truck & Bus benefited in 2024 from its successful realignment program, maintaining an adjusted operating return on sales of 7.2% (2023: 7.3%), on a par with the previous year. However, customers in the European market remained cautious, particularly in Germany, MAN's home market. Furthermore, MAN says it was able to limit the decline in sales revenue to 7%, which totaled €13.7 billion (2023: €14.8 billion), notwithstanding a drop of 17% in unit sales to 96,000 vehicles (2023: 116,000).
The contrast with Scania is stark. Scania recorded sales revenue of €18.9 billion (2023: €17.9 billion) in fiscal year 2024, primarily thanks to the very strong growth in the New Vehicles business in South America. Adjusted operating return on sales climbed to 14.1% (2023: 12.7%), 1.4 percentage points higher than in the previous year. This was due to the volume-driven increase in sales revenue, a favorable price and product mix, and lower product costs. Scania improved its unit sales by 6% to 102,100 vehicles (2023: 96,700).
Scania's 14.1% margin versus MAN's 7.2% illustrates both the potential for improvement at MAN and the difficulty of achieving it. Further restructuring continues. MAN Truck & Bus has outlined a ten-year workforce restructuring plan that will see approximately 2,300 positions phased out across its German operations. According to company statements reported by Handelsblat, also covered on trade agency Electrive, the reduction is intended to be implemented without layoffs and with a "fully socially responsible" approach. The program affects three major sites: Munich (1,300 positions), Salzgitter (600) and Nuremberg (400).
The manufacturer expects to continue hiring and anticipates stabilizing its German workforce at around 13,000 employees. All production sites—Munich, Nuremberg, Salzgitter and Wittlich—are set to remain operational. MAN has committed to invest one billion euros across these locations over the next five years to support product transformation, manufacturing modernization and the rollout of next-generation powertrain technologies.
For investors, MAN represents both the biggest challenge and potentially the largest source of margin expansion within Traton. If management can narrow the gap to Scania's profitability—even partially—the earnings impact would be substantial.
The Modern Traton: Strategy & Operations (2022–Present)
Group Structure & Brand Positioning
Today's Traton represents the culmination of two decades of consolidation. Traton forms the Commercial Vehicles Business Area of the Volkswagen Group, which owns a 87.5% majority shareholding. The Commercial Vehicles Business Area formerly included the Volkswagen Commercial Vehicles brand, but following changes in the management structure of the Volkswagen Group, the Volkswagen Commercial Vehicles brand was reallocated to the Passenger Cars Business Area from 1 January 2019. In 2024, Volkswagen announced plans to reduce its ownership of Traton to 75%, selling shares its shares as free float.
Scania AB, MAN Truck & Bus SE, International Motors, LLC and Volkswagen Truck & Bus are all wholly owned subsidiaries of Traton, which also holds 25% + 1 share of Sinotruk.
Each brand occupies distinct market positions. Scania AB makes trucks for long-distance and distribution traffic, construction sites, and special areas, including autonomous trucks for enclosed areas. City and intercity buses, and coaches complete the product portfolio.
Volkswagen Truck & Bus focuses on growth markets with excellent value products, particularly in Latin America, Africa, and Asia. International serves North American customers with Class 4-8 trucks and school buses.
Leadership Under Christian Levin
The appointment of Christian Levin as CEO in October 2021 represented a strategic choice to bring Scania's manufacturing excellence to the broader group.
Christian Levin has worked in the transportation sector for nearly three decades since starting his career in 1994 as a trainee at Scania. Christian Levin has been CEO of Scania since May 2021 and CEO of TRATON SE since October 2021. Prior to this he was the COO of TRATON.
Christian Levin was born in 1967. He holds a Bachelor of Science in Business & Administration and a Master of Science in Mechanical Engineering. In 1994, Christian Levin started his career as a management trainee with Scania CV AB. He held a number of management positions at Scania, including Director of Product Marketing as well as Managing Director of Italscania. In 2010, Christian Levin was named Executive Vice President and Head of Commercial Operations of Scania CV AB. From 2016 to 2019, Christian Levin was Executive Vice President and Head of Sales & Marketing at Scania CV AB. He has been a member of the Executive Board of TRATON SE since 2019. Until April 2021, he was responsible for Research & Development as well as for Procurement (Chief Operating Officer). He is Chief Executive Officer of Scania CV AB since May 2021 and Chief Executive Officer of TRATON SE since October 2021.
When Christian Levin became CEO of the TRATON GROUP in 2021, while retaining his President and CEO positions at Scania, he expressed a clear ambition for the entire Group to leverage the wealth of knowledge accumulated by Scania over the past 70 years. Recognizing the strong heritage and success of Scania's modular system, the decision was made to adapt and evolve the modularization strategy into a cross-brand structure. In doing so, this ensures the system can effectively address the unique needs of each business and its customers, while continuing the lineage and the commonality of BygglĂĄdan.
Synergies & Common Platforms
The Traton Modular System (TMS) represents the practical manifestation of synergy ambitions.
We're making great progress toward the unified TRATON Modular System for key technical areas for trucks and buses like chassis, cabs, E/E architecture, and engines. This system lets us plan and develop key components and so-called performance steps once and use them across all our brands, boosting efficiency by up to 25%. A great example is the Common Base Engine (CBE), which was introduced at MAN 2024 after successful launches at Scania in 2022 and International in 2023. Volkswagen Truck & Bus will also adopt the CBE in 2028. The engine is far more fuel-efficient than comparable diesel engines, and the feedback from our customers has been extremely positive.
The Common Base Engine (CBE) is TRATON GROUP's long-term engine platform. Impressive in its efficiency and low in emissions, it is further reducing TRATON's emission footprint—and it marks a shift to cross-brand modularity for the Group. The future of the logistics industry belongs to battery-electric and autonomous vehicles. But that does not make the Common Base Engine (CBE) yesterday's news: depending on region and area of application, it will take these innovative technologies several years to gain wide market coverage. Until that is the case, the CBE is helping to make heavy-duty commercial vehicles more cost-efficient and to reduce their emissions. At the same time, it is laying the foundation for future projects across the entire TRATON GROUP as a modular powertrain born out of collaboration between the brands.
Compared with the engines it will replace, the CBE has a high efficiency of more than 50 percent. Fuel consumption is considerably lower and the CBE offers greater overall economy and significantly lower CO2 emissions.
The CBE can be expanded to meet specific needs, making it suitable for use all over the world: Thanks to a modular design principle, the CBE in trucks from Scania, MAN, International, and Volkswagen Truck & Bus shares more than 80% of the same components.
In 2025, Traton consolidated R&D across brands. A July 2025 milestone—the creation of a unified Group R&D organization—positions Traton to streamline innovation. By integrating Scania, MAN, International, and Volkswagen Truck & Bus under a common technical platform, the company aims to reduce development costs and accelerate time-to-market for next-generation solutions. The new International S13 Powertrain, based on a Group-wide 13-liter Common Base Engine, exemplifies this synergy.
For investors evaluating synergy realization, the Common Base Engine serves as a proof point. The successful rollout across four brands—each with different market requirements, regulatory environments, and customer expectations—demonstrates that cross-brand collaboration can deliver tangible results. The claimed 25% efficiency improvement provides a benchmark for future shared-platform initiatives.
The EV Transformation Challenge
No discussion of Traton's future is complete without addressing the industry's most consequential transition: electrification.
Munich, March 16, 2022 – The TRATON GROUP is intensifying its transition to commercial vehicles powered by alternative drives and planning to invest €2.6 billion in electric mobility research and development by 2026 to support this goal. Previously, the budget had been €1.6 billion by 2025. At the same time, TRATON is scaling back its investments in conventional drives. Christian Levin, CEO of the TRATON GROUP: "Together with its brands, the TRATON GROUP will assume a leading role in sustainable transportation. This is why we have consistently aligned our planning for the next five years to focus on battery electric drives. These drives are clearly the greenest, fastest, and most affordable solution for our customers, even for long-haul transportation, although hydrogen may prove to be a useful addition in certain niches. Since trucks are charged primarily during peaks in supply and troughs in demand, even the power load on the grid is moderate."
Christian Levin: "This is why our priority is investing in fully battery electric vehicles (BEVs). Our aim is for 50% of our long-haul trucks to be zero-emission by 2030—provided the corresponding regulatory mechanisms and infrastructure are in place." The TRATON GROUP intends to work with Daimler Truck and the Volvo Group to establish a public charging network for battery electric heavy-duty trucks and coaches as part of a joint venture. All partners already signed a binding agreement at the end of 2021, which is now subject to antitrust approvals. The plan is to install at least 1,700 high-performance green energy charging points across Europe within five years of the establishment of the joint venture.
The Milence joint venture represents a remarkable instance of competitors collaborating on infrastructure. Established in July 2022 as a joint venture between Daimler Truck, the TRATON GROUP, and the Volvo Group, Milence is dedicated to making the future of road transport fossil-free. Milence operates as an independent, stand-alone company with an initial funding of €500 million. Mission: To accelerate & support the transition to zero-emission heavy-duty vehicles in Europe. Strategic Goals: Network expansion—Milence plans to install and operate around 1,700 high-performance green energy charge points across Europe by 2027. Target markets: The initial focus will be on busy highways and TEN-T corridors in 10 key markets: the Netherlands, Belgium, Germany, France, Sweden, Denmark, Italy, Spain, UK and Poland.
Its EV models are also starting to pick up in terms of sales. In the first half of 2025, Traton sold 1,250 electric models globally, which was twice as many as during the same period last year. That puts it not far behind Volvo, another market leader. Traton is now ramping up production—MAN recently opened a new factory line that can assemble electric and diesel trucks interchangeably. That should also help bring costs down, key to success for the sector—today, the price of an electric truck can be several times higher than for diesel ones. What's more, Traton is working to install hundreds of publicly available chargers across Europe through an industry partnership called Milence.
Traton's push towards electromobility was evident in the continued development of electric truck models across its brands. Scania, in addition, made considerable progress by founding Erinion, a company specializing in charging solutions for electric commercial vehicles. Meanwhile, MAN registered strong interest in its battery electric heavy-duty trucks.
For example, an assembly plant was opened in Södertälje, Sweden, in 2023 by TRATON brand Scania, which invested 100 million euro in the factory and uses it to assemble batteries for the electric trucks of the future. The battery packs are expected to last for 1.5 million kilometres, which corresponds to the average service life of a lorry. MAN is also focussing on in-house battery production and is currently building a large-scale production hall in Nuremberg, where up to 100,000 battery units for e-buses and e-trucks are to be manufactured every year from 2025.
The commitment to battery-electric technology is notably firm compared to some competitors exploring hydrogen alternatives. Navistar parent company Traton is standing firm in its belief that battery-electric trucks are the best alternative for trucking fleets looking to decarbonize their operations, even as other equipment manufacturers invest resources in multipronged paths that incorporate multiple fueling technologies. "We don't see any real alternative to battery electric" when it comes to the transition away from diesel, Traton Vice President of Alternative Drivetrains Andreas Kammel said during an April 22 webinar on the outlook for BETs. "We don't really have an 'Option B.'"
For investors, the EV transition represents both Traton's greatest risk and opportunity. The risk: massive capital expenditure on a technology transition where the timing and pace remain uncertain, with potential for stranded assets if hydrogen or other alternatives gain traction. The opportunity: first-mover advantage in a market where the three largest Western players (Daimler, Volvo, Traton) are investing together in infrastructure, potentially creating barriers to entry for newcomers.
Financial Performance & Current State
2024 Results
The TRATON GROUP grew its sales revenue in 2024 by 1% to €47.5 billion, despite slightly lower unit sales.
The adjusted operating result of the TRATON GROUP in 2024 was €350 million higher at €4.4 billion (2023: €4.0 billion). At 9.2%, the adjusted operating return on sales not only exceeded the previous year's figure (2023: 8.6%) but was also slightly higher than the forecast range of 8.0% to 9.0%. This increase was due to effective price management, combined with improved cost discipline in the industrial business (TRATON Operations).
Dr. Michael Jackstein, CFO and CHRO of the TRATON GROUP: "We managed to lift the TRATON GROUP's sales revenue to €47.5 billion in 2024, despite slightly lower unit sales. With our adjusted operating return on sales of 9.2%, we were even able to exceed our forecast and strategic margin target of 9%. Our net cash flow in the TRATON Operations business area was €2.8 billion. As a result, we reduced once again the net financial debt of the TRATON Operations business area, including Corporate Items, by €874 million to €4.9 billion. In a market that proved challenging at times, we kept our customers supplied with very good products while creating value for our shareholders. We are proposing to increase the dividend for fiscal year 2024 to €1.70 per share, after paying out €1.50 per share for fiscal year 2023."
The brand-level performance tells the story of Traton's internal dynamics clearly:
- Scania: €18.9 billion revenue, 14.1% adjusted operating return on sales—the crown jewel
- MAN: €13.7 billion revenue, 7.2% adjusted operating return on sales—the turnaround project
- International: Strong S13 powertrain adoption, expanding North American presence
- Volkswagen Truck & Bus: Volkswagen Truck & Bus (VWTB) managed to lift its adjusted operating return on sales by 2.5 percentage points to 11.8% (H1 2023: 9.3%) thanks to substantial growth in sales revenue and improved product positioning and unit price realization in Brazil.
2025 Outlook
Across all brands and all vehicles, we expect that unit sales development will range between –5% and +5%. Sales revenue of the TRATON GROUP and of TRATON Operations should also come in within a range between –5% to +5%. The TRATON Group's adjusted operating return on sales is forecast between 7.5% and 8.5%. Net cash flow of TRATON Operations is expected to come in between €2.2 billion and €2.7 billion. Our 2025 full-year outlook is subject to future geopolitical developments, particularly in the USA, and their impact on TRATON GROUP's business.
During its Capital Markets Day 2024 in Munich, the TRATON GROUP outlined its ambitions for its medium-term business development. The adjusted operating return on sales is expected to be between 9 and 11% in 2029. The corresponding outlook for the current fiscal year 2024 is between 8 and 9%. The TRATON GROUP plans to grow its sales revenue by 20 to 40% over the period 2024 to 2029. Moreover, TRATON aims to fully repay the net financial debt of the industrial business within this time frame.
Competitive Positioning: Bulls, Bears, and Strategic Realities
Porter's Five Forces Analysis
Threat of New Entrants: LOW
The commercial vehicle industry presents formidable barriers to new entrants. MAN's diesel engine expertise traces directly to Rudolf Diesel's work in the 1890s—over a century of accumulated engineering knowledge. Traditional Titans: Incumbents like Daimler Truck (Mercedes-Benz), PACCAR (Kenworth, Peterbilt), Volvo Group (Volvo, Mack), and Traton Group (Scania, MAN) dominate the market with established dealer networks, robust service infrastructure, and brand loyalty. Their focus lies on continuous product improvement, fuel efficiency, and compliance with stricter emission regulations.
New EV-focused entrants (Tesla Semi, Nikola, etc.) face scale disadvantages and the challenge of building service networks from scratch—critical in an industry where uptime directly impacts customer profitability.
Bargaining Power of Suppliers: MODERATE
Key components like engines, axles, and electronics have limited suppliers, but Traton's scale provides leverage. The 25% efficiency boost through the unified modular system reduces supplier dependency by enabling in-house component sharing across brands. Battery suppliers represent emerging critical dependencies as EV transition accelerates.
Bargaining Power of Buyers: MODERATE-HIGH
Large fleet operators possess significant negotiating power. Total Cost of Ownership (TCO) dominates purchasing decisions, creating opportunities for manufacturers who can demonstrate superior fuel efficiency and uptime. Service networks and parts availability often matter more than initial purchase price.
Rivalry Among Existing Competitors: HIGH
The Western truck market remains consolidated but intensely competitive. Four companies dominate U.S. truck manufacturing: Daimler Trucks, Paccar, Volvo and Traton. Daimler is the biggest: It has about 40% market share, mostly through its Freightliner brand.
Traton, 90% owned by the Volkswagen group, includes MAN and Scania for the European market, as well as Navistar for the USA. The group, which sold more than 338,000 units globally in 2023, is the second-biggest market player of the global trucking industry.
Threat of Substitutes: LOW (but Changing)
For heavy freight transport, trucks remain dominant with limited substitutes. However, last-mile delivery faces increasing competition from alternative logistics models and smaller electric vehicles.
Hamilton Helmer's 7 Powers Analysis
Scale Economies: Traton's modular system and shared components across four brands create genuine scale advantages in R&D and procurement. The Common Base Engine demonstrates cost-spreading across hundreds of thousands of units annually.
Network Effects: Limited direct network effects, but service network density creates indirect advantages—customers benefit when repair capabilities are widely available.
Counter-Positioning: Traton's all-in battery-electric strategy potentially represents counter-positioning against competitors hedging with hydrogen. If BEV dominates, Traton's focused investment pays off; if hydrogen gains traction, this becomes a vulnerability.
Switching Costs: Fleet customers face meaningful switching costs in training, service relationships, and parts inventory. However, these costs are moderate compared to many B2B businesses.
Branding: Strong brand heritage across all four brands, particularly Scania's reputation for quality and MAN's engineering heritage. International's American legacy provides domestic credibility in North America.
Cornered Resource: Access to Scania's BygglĂĄdan modular manufacturing expertise represents a genuine cornered resource, accumulated over 70+ years and now being deployed across the group.
Process Power: Scania's manufacturing processes, while not secrets, represent accumulated learning that competitors cannot easily replicate. The expansion of these processes to MAN and International creates group-wide process advantages.
The Bull Case
- Synergy Realization: The 25% efficiency improvement from modular systems represents real margin expansion opportunity, particularly at MAN where the gap to Scania remains substantial
- North American Growth: International's market share can expand with Traton technology, particularly the S13 powertrain
- EV Leadership: Joint investment with competitors in charging infrastructure creates barriers while reducing individual risk
- Valuation: Trading at modest multiples relative to growth ambitions, with potential for re-rating as margin targets are achieved
- Geographic Diversification: Presence across Europe, North America, and South America provides business cycle diversification
The Bear Case
- MAN Turnaround Uncertainty: Despite years of restructuring, MAN's margin gap to Scania persists; German labor costs and regulations remain structural challenges
- EV Transition Execution Risk: €2.6 billion R&D commitment may prove insufficient; battery technology evolution could strand investments
- Chinese Competition: First Chinese and third global truck manufacturer, Sinotrucks sold 249,000 trucks in 2022. Chinese manufacturers gaining share in emerging markets
- VW Parent Risk: Volkswagen's passenger car challenges could impact Traton capital allocation or strategic focus
- Cyclicality: Commercial vehicle demand highly correlated with economic activity; recession would impact volumes significantly
Key Metrics for Ongoing Monitoring
For investors tracking Traton's progress, three KPIs merit particular attention:
1. Adjusted Operating Return on Sales by Brand The margin differential between Scania (14.1% in 2024) and MAN (7.2%) tells the story of synergy realization better than any other metric. Watch for: - MAN margin expansion toward 9-10% - International margin improvement as S13 powertrain scales - Group-wide convergence toward the 9-11% 2029 target
2. Electric Vehicle Sales Volume and Mix In the first half of 2025, Traton sold 1,250 electric models globally, which was twice as many as during the same period last year. That puts it not far behind Volvo, another market leader. The 50% zero-emission target by 2030 provides a clear benchmark. Quarterly EV sales growth and penetration rates indicate progress toward this goal.
3. Net Financial Debt Reduction Our net cash flow in the TRATON Operations business area was €2.8 billion. As a result, we reduced once again the net financial debt of the TRATON Operations business area, including Corporate Items, by €874 million to €4.9 billion. The stated goal of eliminating net debt by 2029 provides a clear trajectory. Debt reduction demonstrates that margin expansion flows through to the balance sheet rather than being consumed by excessive investment or shareholder distributions.
Conclusion: The Long Road Ahead
Twenty-five years after Volkswagen first invested in Scania, Traton stands as one of the world's leading commercial vehicle manufacturers—but one still in the middle of its strategic journey. The constituent brands bring nearly 500 years of combined heritage: MAN's connection to Rudolf Diesel's original engine, Scania's manufacturing philosophy honed since the 1930s, and International's American legacy stretching to Cyrus McCormick's 1831 reaper.
The consolidation thesis has proven sound—four brands united under common ownership and increasingly common platforms. But execution remains the primary determinant of value creation. MAN's margin expansion, the EV transition's timing, and the continued integration of Scania's manufacturing excellence across brands will determine whether Traton catches its larger competitors or remains perpetually third.
Christian Levin, CEO of the TRATON GROUP: "We look back on a year full of significant milestones and crucial groundwork. In 2024, we at the TRATON GROUP made great strides on our way toward becoming a stronger, more efficient Group. Progressing with the introduction of our TRATON Modular System was pivotal in this regard."
For long-term investors, Traton offers exposure to an essential industry—global commerce cannot function without heavy trucks—through a company with clear strategic direction and proven ability to execute complex integrations. The risks are real: cyclicality, EV transition uncertainty, and the ever-present challenge of managing proud brands under common ownership. But the opportunity is equally compelling: a company positioned to benefit from both near-term synergies and long-term industry transformation.
The story that began with Rudolf Diesel's explosion in an Augsburg laboratory, continued through Swedish railway wagons and American wheat reapers, and consolidated in Volkswagen's Munich headquarters, remains very much a work in progress. The commercial vehicle industry's transformation has only just begun.
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