Scania gears up for growth

The upheaval of transitioning to a new-generation truck platform and the supply issues of 2018 are nearing resolution, said the CEO and President of Scania AB, Henrik Henriksson, during a recent visit to Scania Australia headquarters.

"We are in a transition now that is coming to it end and that's introducing the new truck program," he said.

"During the first quarter of this year we are transforming our precision operation to run the new truck and when we have done that, basically three years of transformation from the old truck to the new one is done.

"During that time we've been running parallel programs, which I have to say has been a strategic decision to limit investments over time, but of course it put a lot of strain on our supply chain."

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Scania Australia Managing Director Mikael Jansson told Trucksales late last year that the brand achieved an all-time record in 2018 for orders, while actual registrations were constrained by supply issues of New Truck Generation models and disruption to the production of Scania's V8 engine.

Add in the turnaround of some Australia-bound ships containing Scania trucks due to customs concerns over brown marmorated stink bugs (yes, really), and Scania's sales of 894 units last year fell short of the record of 1004 units set in 2017 – a contraction of 11.0 per cent.

Mr Henriksson said the V8 issue, which was amplified in Australia due to this market's preference for the engine – also the last volume-production V8 truck engine available commercially – was nearly resolved.

"We have had one specific supply chain problem on the blocks of the V8s during last year, and we're still suffering from that," he said.

"But we are now coming up in the second and third quarter to normal production levels again, but for a market like Australia where a big part of our sales is V8s, of course it's felt down here as well. But that has definitely affected our global operation."

However, according to Henriksson, Scania's overall strategy is set to pay dividends – both globally and within the Australian market.

"When it comes to our Australian operation, we have had some challenges last year when it comes to supply because of the disturbances in the changeover we had, but we can also see that in the product range and with the services we have, we have all the fundamentals – together I would say with a very competent and capable organisation locally, we have everything we need to move our ambition up when it comes to market share [in Australia].

"We should deserve a different position [in terms of market share] and that is our ambition as well."

Scania held an overall market share of 2.1 per cent in Australia at the end of 2018, and a 6.2 per cent share of the heavy-duty segment. The latter sees the brand slot into sixth place, behind Kenworth (20.5 per cent share), Volvo (14.9 per cent), Isuzu (13.0 per cent), Mack (7.9 per cent) and Mercedes-Benz (7.6 per cent).

"I think there are expectations of Australia [by Scania AB] that continue to be raised, based on that we see that we have all the fundamentals in place now to put it into second gear and grow," said Henriksson.

"When it comes to the Australian market there are still of course a few things we need to do. We need to continue to develop our product range to suit this very demanding market but I think we have the pieces of Lego in place – it's just a matter of making sure they fit together and that we tailor make it to the customer's need."