What are the challenges on the road to sustainable transportation? What part is MAN playing? These were the topics on the agenda when Anders Nielsen, CEO of MAN Truck & Bus, met with Dr. Kim Petrick, Partner at Bain & Company.

Anders Nielsen, CEO of MAN Truck & Bus, met with Dr. Kim Petrick, Partner at Bain & Company (photo)

A. Nielsen: Between now and 2050 the number of people living in cities will double from three to six billion. Whether we like it or not, urbanization is one of the biggest megatrends in the world. And this leads to an increased demand for transportation within and between cities. So sustainable transportation solutions will play a key role in the future, and companies like MAN Truck & Bus have a special responsibility here.

K. Petrick: In general, trucks and buses from MAN rank among the more efficient products and comply with the stringent EU emissions regulations. So there is already efficient technology available on the global market — and fossil fuels are becoming more expensive over time. That’s why I would expect efficient solutions to spread swiftly. It might take only a couple of reinvestment cycles to get the most efficient vehicles onto the roads.

A. Nielsen: I agree when it comes to Euro VI. This standard has been a great help in reducing pollutants to almost zero. But now the spotlight is on CO2 reduction. So your focus on which vehicles are on the roads is absolutely right. A maximum of 10% of our total CO2 emissions come from production operations, while 90% are generated when our products are in use. That means if we expend 5% more energy to produce a vehicle that consumes 5% less energy, it’s a win-win situation for us, for our customers, and for society. But that doesn’t prevent us from investing in efficient production sites as well. On the contrary: Our clear objective is to achieve a 25% reduction in CO2 emissions from our sites by 2020.

K. Petrick: That gives us a clear illustration of how things are interrelated. When MAN customers calculate the cost of reducing fuel consumption and thus CO2 emissions, they have to take into account not only the purchase price of a truck, but the total cost of ownership over the full product life cycle. In my experience, this calculation is generally made by customers in the premium segment. Their budgets are more flexible; they invest in more environmentally friendly equipment to save costs in the long run by using less fuel; and they train their people accordingly.

Dr. Kim Petrick (photo)

"MAN should take responsibility for driving progress towards low-emission transportation."Dr. Kim Petrick

"CO2 will be the next big challenge."Anders Nielsen

Anders Nielsen (photo)

A. Nielsen: That’s right — and we are in the premium segment. Fortunately, our customers have the same requirements as society has: They want efficient transportation. Society is looking for minimum-emission transportation, and our customers focus on the best total cost of ownership. This pushes us very much in the right direction. So our strategy is clear: We need to work on sustainable technology, such as alternative drivetrains, to provide sustainable transportation. At MAN we were ahead of the curve when it came to developing alternatives; we introduced the TGL Hybrid quite early in the game and launched series production of the Lion’s City Hybrid. Last year we went a step further, presenting our Metropolis model — a zero-emission truck in electric mode. But since there is a long way to go before zero-emission vehicles enter series production, we need to develop a roadmap for how to get there. In this process, we want to be a driver of sustainable transportation solutions by taking technology leadership.

K. Petrick: It is very important for supply to match demand. Many of MAN’s customers are aiming for a lower total cost of ownership. Over time, we will also see your customers’ customers demanding products that are delivered in a more sustainable way. So in order to set itself apart from the competition, MAN should take responsibility for actively driving progress towards low-emission transportation.

A. Nielsen: I agree with you. But the problem, of course, is that while we as a manufacturer may have a brilliant idea and push for it, if we don’t get the whole industry behind us or a critical mass of customers, we won’t succeed. The reason is that we are limited by the available infrastructure. If you take a diesel truck, it’s easy: Diesel filling stations are everywhere; the infrastructure is very well developed. But if the battery of your e-truck is low and you need a charging station, it’s not that easy or convenient. We are only just beginning to slowly establish that infrastructure.

K. Petrick: The same applies to urban infrastructure. In theory, a city is a good thing for sustainable transportation because you have far fewer kilometers to cover, but it requires smart transportation systems for goods and for people. This won’t happen automatically. The regulator may have a role to play in shifting the public costs into the private sector, for example by putting restrictions on noisy trucks in city centers, pricing or limiting road use, or establishing new public bus routes. We need public transportation to become more practical. Communities need to invest in the infrastructure to make it even more flexible, so that people appreciate its quality.