VOLKSWAGEN Group is preparing to further reduce its controlling stake in truck manufacturer Traton as its sweeping cost-cutting program extends beyond passenger-car operations and into the group’s extensive investment portfolio.
The German automotive giant currently owns 87.5 per cent of Traton – parent company of Scania, MAN, International, and Volkswagen Truck & Bus – but has reiterated plans to reduce its holding to 75 per cent plus one share.
The move would allow Volkswagen to retain outright control while substantially increasing Traton’s free float and potentially raising around €2.4 billion ($A3.9b) at current valuations.
Volkswagen’s existing Traton holding is valued at approximately €16.6 billion ($A27.1b).
The proposed sell-down comes as Volkswagen Group CEO Oliver Blume accelerates efforts to simplify the company’s sprawling structure, cut overheads, dispose of non-core assets, and concentrate investment on its central automotive businesses.
Traton CEO Christian Levin said pressure from the group’s majority shareholder to scrutinise expenditure had intensified.
“We feel increased pressure to be incredibly careful with money, with costs, with investments,” he said.
However, Mr Levin said a reduced Volkswagen holding could ultimately benefit Traton by widening its shareholder base, improving share liquidity, and potentially allowing its market valuation to better reflect its underlying financial performance.
He said attracting more active investors – including potentially private equity interests – could also bring expertise in emerging areas including artificial intelligence and technology development.
“The broader, the better,” said Mr Levin of Traton’s potential ownership base.
Volkswagen’s planned reduction would continue a gradual loosening of its grip on Traton following the truck group’s stock-market listing in 2019.
In March 2025, Volkswagen sold a further 2.2 per cent holding for €360 million ($A587m), reducing its stake from 89.7 to 87.5 per cent.
At the time, Volkswagen said the placement was intended to increase Traton’s free float and improve trading liquidity.
A further reduction to 75 per cent plus one share would be considerably larger but critically would leave Volkswagen with the voting power required to maintain control.
The move is taking shape against a much broader Volkswagen restructuring program targeting more than €6.0 billion ($A9.8b) in annual net savings by 2030.
Around 50,000 positions are already earmarked for removal across Volkswagen, Audi, Porsche, and software operation Cariad as the group tackles what Mr Blume has described as an excessive cost base.
The Volkswagen chief has identified eight major areas requiring structural change, including reductions in model and variant complexity, consolidation of vehicle platforms and electronic architectures, improved factory utilisation, and a sharper focus on investment holdings.
Portfolio rationalisation is becoming an increasingly important part of that process as Volkswagen examines the enormous number of businesses and investments accumulated across the group.
The strategy has already led to one major transaction.
In June, Volkswagen agreed to sell a 51 per cent controlling interest in Everllence, formerly MAN Energy Solutions, to US private equity group Bain Capital.
That transaction is expected to generate approximately €7.4 billion ($A12.1b) in proceeds, while Volkswagen will retain a 49 per cent interest in the industrial engine, turbomachinery, and energy technology company.
Volkswagen CFO and COO Arno Antlitz said the deal demonstrated the group’s willingness to actively manage its portfolio to reduce structural complexity, strengthen its balance sheet, and increase financial flexibility.
The Traton proposal is markedly different, however, because Volkswagen is not looking to exit the commercial vehicle group.
Instead, the company stands to release several billion dollars of capital while retaining control of an increasingly profitable business that is showing signs of improving demand across key markets.
Traton reported an adjusted operating result of €1.54 billion ($A2.5b) for the first half of 2026, up 12 per cent year-on-year despite revenue remaining broadly unchanged at €22.0 billion ($A35.9b).
Its adjusted operating return on sales improved from 6.3 to 7.0 per cent.
Second-quarter adjusted operating profit reached €957 million ($A1.56b), beating market expectations and producing an adjusted operating margin of 8.1 per cent.
Forward demand is also strengthening.
Total incoming orders rose 30 per cent to 181,944 vehicles in the first half, while truck orders increased 34 per cent to 149,323 units.
North America delivered the largest turnaround, with truck orders up 141 per cent as heavy-duty demand recovered following a period in which customers delayed purchasing decisions amid tariff uncertainty.
Truck orders increased 10 per cent in Europe and 22 per cent in South America.
The improvement prompted Traton to narrow its 2026 outlook towards the upper end of its previous guidance, with group sales and revenue now expected to range between flat and 7.0 per cent growth.
Adjusted operating return on sales is forecast at between 6.3 and 7.3 per cent.
Vehicle deliveries are also beginning to reflect the stronger order book.
Traton sold 82,900 vehicles during the second quarter of 2026, up 4.0 per cent on the corresponding period and substantially ahead of the 68,600 units delivered during the first quarter.
First-half sales reached 151,500 vehicles, just 1.0 per cent below the corresponding 2025 period despite considerable uncertainty across global commercial vehicle markets.
Volkswagen Truck & Bus led Q2 growth with deliveries up 15 per cent, while Scania increased 7.0 per cent and MAN Truck & Bus gained 3.0 per cent.
International Motors remained the weakest performer, with second-quarter deliveries falling 8.0 per cent and first-half volume down 15 per cent.
Traton nevertheless expects recovering US customer demand to become increasingly evident through the second half of this year.
Scania’s performance was assisted by the launch of its Next Era product range in China and Brazil’s government-backed Move Brazil incentive program, which also supported Volkswagen Truck & Bus.
MAN’s first-half volume increased 8.0 per cent despite subdued demand in its important German home market.
Battery-electric commercial vehicle volumes are growing quickly from a comparatively small base.
Traton delivered 1050 all-electric vehicles during the second quarter, representing a 67 per cent year-on-year increase.
First-half battery-electric sales reached 1910 units, up 53 per cent.
MAN accounted for 1100 of those vehicles, while Scania delivered 400 and International Motors 390.
The group is simultaneously increasing its focus on software and connected vehicle technology, including development of the Traton One OS operating system.
Scheduled to enter new trucks from 2028, the common software architecture is intended to support over-the-air updates, connected services and functions aimed at reducing vehicle downtime across Traton’s brands.
The combination of improving profitability, stronger orders and growing investment in electrification and software makes Traton an unusual target within Volkswagen’s restructuring program.
Rather than disposing of a struggling or peripheral operation, Volkswagen is effectively seeking to monetise part of a valuable asset while retaining control and giving Traton greater access to outside capital and expertise.
For Volkswagen, it also underlines the scale of the overhaul now under way.
As Mr Blume pushes to transform the group into a leaner, less complex and more financially disciplined organisation, even profitable operations are being examined for opportunities to release capital – and Traton’s €16.6 billion ($A27.1b) valuation perhaps makes it one of the most obvious places to look.