Volkswagen’s global commercial vehicle group Traton has announced its 2019 sakes result was up 4 per cent on 2018  despite a 7 per cent dip in its European order intake during the year.

Traton says it sold 242,200 MAN, Scania, and Volkswagen Caminhões e Ônibus brand commercial vehicles globally in 2019, exceeding the 2018 figure thanks to  high demand for trucks in Europe during the first half of the year and a sharp increase in demand in Brazil.

However Traton says the market for trucks cooled further in the course of the year, especially in Europe, reflected in the fact that the Group’s order intake declined during the year.

“We achieved strong sales figures in an increasingly challenging market. Our brands were ready early on for the foreseeable decline in orders in Europe,” said Andreas Renschler, CEO of Traton and member of the Board of Management of Volkswagen AG.

“Our outstanding technology, close contact with customers, and an excellent team will give us a good foundation to tackle the challenges lying ahead,” added Renschler.

All three brands helped the Group achieve its strong unit sales: MAN sold 104,900 vehicles, 2 per cent more than in the previous year. The MAN TGE van, a rebadged version of VW’s Crafter, made a major contribution to that. Scania delivered 99,500 trucks and buses up 3 per cent on 2018.

Volkswagen Caminhões e Ônibus benefited from the economic upturn in Brazil, increasing deliveries by 15 per cent to 41,900 vehicles.

Traton brands grew sales of its trucks by 2 per cent to 205,900 units globally across 2019, while deliveries of buses fell by 5 per cent to 21,500 units following stronger demand in 2018.

The company says weaker demand for trucks in Europe in the second half of the year is attributable, among other reasons, to orders being pulled forward in the first half of the year because of introduction of the digital tachograph in Europe on 15th June 2019, and pull-forward effects in the United Kingdom as a result of Brexit.

The market for commercial vehicles over six tonnes cooled down sharply, in particular in Europe, in the second half of the year.

Orders for Traton truck brands in the second half of 2019 totalled 89,500 about 12 per cent below the 101,500  orders for the first half of the year.

Traton says that MAN and Scania have already taken measures in Europe to counter the decline in the market. Production has been adjusted and the number of subcontracted employees reduced.

“We still expect a decline of 10 to 20 per cent for the European market for trucks over six tonnes in 2020. That will likely be particularly visible in the first half of 2020, since the first half of 2019 was impacted by pull-forward effects due to introduction of the digital tachograph and the Brexit debate,” Renschler said.

“Based on market expectations, the Traton brands are preparing further measures in coordination with all relevant stakeholder groups,” he added.

The company confirmed its target of an operating return on sales of between 6.5 to 7.5 per cent in 2019.

The company is still holding its cards close to its chest regarding acquisition of a larger stake in US truck maker Navistar where it currently holds approximately 17 per cent and has previously indicated  that it would seek to take a controlling interest in  the American company to give it a footprint in a giant truck market.