TRATON speeds Scania product cycle

Some five years after Volkswagen acquired full control of Scania, the level of co-operation between Volkswagen Nutzfahrzeuge (Volkswagen Commercial Vehicles), MAN Truck & Bus and Scania AB has found a natural rhythm, with the efficiencies gained producing benefits in terms of the speed with which Scania products and technology can evolve.

During a visit to Melbourne last month by Scania AB CEO and President, Henrik Henriksson (pictured), the global chief of the Swedish truck and bus brand said the financial clout of being part of TRATON SE (formerly Volkswagen Truck & Bug Ag), was allowing it to push harder and faster with its product development than ever before.

"Where I really see that we have a benefits, is that we just launched a new truck range, into which we invested more than Euro 2 billion," Mr Henriksson said.

"If we [Scania] were on our own today we would probably say, 'Whoa, let's just digest that investment and see how the depreciation and the balance sheet and the income statement go, and then let's wait another few years before we kick off another big one'.

"But now, since we're part of a bigger group, already a few years ago we kicked off the next generation of powertrains. And what that means is that for Scania customers we will probably have the new technology – in this case a powertrain, but it could also be battery vehicles or autonomous vehicles – three or four years earlier than if we were on our own. That for me is the key advantage."

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Back in 2015, when VW moved to integrate operations across VW commercial vehicles, Scania and MAN, TRATON chief Andreas Renschler said the group could potentially unlock Euro 650 million (A$1.02 billion) in savings over a decade through streamlining its operations and exploring a variety of synergies. However, Mr Henriksson said he believed the bigger gains extended beyond fiscal efficiencies.

"I'm not convinced about of all the synergies on the cost side, but I see a lot of synergies on the revenue side and in our relationship with our customers," he said.

"So I think that, as the CEO for Scania, this is the big benefit of this group – it is that we can bring more features and technology, things that bring our customers more profitability, to the market quicker than if we were on our own, and that we can do it now in a controlled environment where we are not worried that we will compete with each other."

The comments came just a couple of weeks before VW announced it was shelving its plans of an IPO (initial public offering) of TRATON SE shares to help fund the group's expansion outside of Europe.

The announcement came amid weakening market condition in Europe, the group's biggest market, thanks in part to concerns over US President Donald Trump considering increasing trade tariffs and the general uncertainty surrounding Brexit.

"We regret having to distance ourselves, because of currently weak market conditions, from a stock market listing of TRATON SE," said Volkswagen Group's Chief Financial Officer, Frank Witter.

It's believed the group will continue with the IPO – previously said to involve up to 25 per cent of TRATON, potentially generating Euro 5 to 6 billion (A$8 to 9.5 billion) – once those market conditions have improved.