The group said demand for diesel engines was strong, up 29% in the year, as commercial vehicle orders topped 25%. Demand for trucks accelerated in Central and Eastern Europe.

Turbo Machinery order book remained flat at 1.5 billion euro, while demand at industrial services fell to 1.6 billion euro.

During the year, MAN sold industrial services'' steel business to CCC Steel GmbH&Co. KG, Hamburg. Following the sale, MAN holds a 33.3% stake in the new company. To support commercial vehicles'' growth strategy MAN Finance International GmbH added vehicle rental to its business by acquiring an around 25% stake in EURO-Leasing GmbH.

Earnings Guidance

For 2008, the group expects sales increase upwards of 5% on continued high demand.

Operating profit is guided higher too, said the company, which has also forecasts steady increase in orders for 2008, and particularly 10% order growth within the commercial vehicles unit.

Return on sales is expected to remain unchanged at 11.2%.

Shares fell 8.2% to 80.40 euros on Tuesday, the biggest decline in almost five years.