MUMBAI, May 9 (Reuters) - German truckmaker MAN AG <MANG.DE> expects that strong growth in international markets and growing demand for transportation and power will help protect its margins, a company official said on Friday.
Munich-based MAN has outsourced non-core operations, employed more temporary staff and cut costs, and expects operating profit to surpass 2 billion euros ($3 billion) for the first time this year.
"Margins are under pressure, but we have a diversified business and the demand for transport and energy are very strong," Georg Pachta-Reyhofen, executive board chairman of MAN Diesel, said on the sidelines of a news conference.
MAN, Europe's third-biggest truckmaker, has said that any global economic downturn would not pose a risk to its operating margin of at least 6.5 percent.
"Our business is much more oriented to Asia and Europe, and we have a very strong business in the upcoming markets here."
MAN recently opened a truck factory in Poland, which exports to Russia, and expects to also export to Asia and Africa from India, where it has a venture with Force Motors Ltd <FORC.BO>.
It is also in talks with potential partners in China.
MAN plans to raise capacity for trucks to 140,000 units in 2010, not including its production in India, where it will make 24,000 heavy trucks by 2010, of which half will be exported.
MAN has been in talks on cooperation for engines and components with the Brazilian heavy truck business of Volkswagen <VOWG.DE>, which owns about 30 percent of MAN.
"We've made progress... it makes strategic sense for us," Reyhofen said, without specifying a time frame for when a decision may be made.
Competition in trucks is fierce in India, where Tata Motors Ltd <TAMO.BO> and Ashok Leyland <ASOK.BO> dominate the market of nearly half million units of commercial vehicles.
Leyland last year tied up with Nissan Motor <7201.T> for light trucks and engines to take on ventures of Mahindra & Mahindra <MAHM.BO> with Navistar <NAVZ.PK>, Eicher Motors <EICH.BO> with Volvo <VOLVb.ST> and Daimler <DAIGn.DE> with the Hero Group.
MAN also manufactures massive diesel engines that power ocean-going ships and industrial turbines and compressors, and will focus on turnkey power plants, refineries, steel makers and fertiliser makers in India, Reyhofen said.
"We see a growing industrial services market, especially in power generation and gas transportation," he said, adding that order intake grew 38 percent in 2007 to 112 million euros. ($1=.6467 Euro)
(Reporting by Rina Chandran; Editing by Ranjit Gangadharan)
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