Analyst: be aware of industry safety in Sinotruk, MAN deal

Shanghai, July 17 (Gasgoo.com) While Sinotruk is selling its 25 percent stake to MAN SE of Germany, which is supplying it with technology to build trucks aimed at emerging markets, analyst warns the deal of this kind may involve industry safety.

Zeng Zhiling, a senior analyst with Global Insight Inc in Shanghai, told Gasgoo that the government regulatory department should keep a close eye on such deals that see a foreign company buy a significant percentage of stakes in a stake-owned automaker. If the leading player of heavy truck industry gets controlled by a foreign company, the whole industry chain will become disordered.

In another tone Zeng said China indeed holds much greater potential than the other mature markets where Man have invested, and some of its rivals have already had a presence in the country or are looking to enter the market. Forming a Chinese JV is a more appropriate way for MAN to open the market than simply export products there.

Sinotruk is the leading producer of heavy trucks in China, holding approximately 20 per cent of the market and selling more than 100,000 heavy trucks in 2008.

Xu Minfeng, an auto analyst with Central China Securities Co, told Gasgoo that Sinotruk purchased the truck technology of Man's subsidiary Steyr as early as 1984, but now it has difficulty in upgrading those technologies. A tie-up with Man enables it to tap the latest advanced heavy truck technologies from overseas at limited cost.

MAN buys EUR560m stake in Sinotruk