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2/8/2016 10:50:00 AM Write a Letter to the Editor Write a letter to the Editor

VW Trucks Chief Open to IPO, Deals in Expansion Strategy

Dado Galdieri/Bloomberg News

Volkswagen AG’s heavy-truck division is exploring options for growth that could include acquisitions and an initial public offering as it seeks to reap the benefits of more independence within its rapidly reorganizing parent company.

Trucks chief Andreas Renschler said in an interview that the United States, the only major market where the unit has no significant presence, and China are among key regions for possible expansion. The strategy would challenge global industry leaders Daimler AG and Volvo AB as well as smaller rivals in emerging markets. Truck models are dramatically different in individual regions, so U.S. expansion probably would involve an acquisition. Renschler declined to comment on specific plans or targets.

“We’re keeping all options open on our way to becoming a global champion,” Renschler said in the interview in Munich. “We want to be industry leaders in terms of profitability, customer-oriented innovations and global presence, not necessarily in terms of sales volume.”

Unlike most of its passenger-car siblings, Volkswagen’s trucks unit isn’t dealing directly with fallout from the diesel-emissions scandal. Still, the crisis besetting the parent company triggered a management revamp and accelerated a push kick-started a year ago to give the automaker’s 12 brands more leeway to make their own choices, handing Renschler, who previously held the same post at Daimler, more room to maneuver.

“Shareholders would certainly welcome an IPO of VW’s trucks business as the company would start lifting value after decades of empire building” and address investor skepticism regarding conglomerates comprising passenger cars and commercial vehicles, Arndt Ellinghorst, a London-based analyst with Evercore ISI, said in a note. He estimates the combined value of VW’s truck assets at about 20 billion euros ($22.3 billion).

The company has lost almost 22 billion euros in market value since emissions cheating at its passenger-car units became public Sept. 18.

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By Christoph Rauwald
Bloomberg News

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