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Scania has potential for 120,000 trucks by 2020

“Last year Scania delivered some 61,000 trucks. Our potential on a global basis
will 2020 amount to 120,000 trucks per year. Our service sales will also grow
and our ambition is for service-related products to represent 25-30 percent of
our total sales,” said Scania’s President and CEO Martin Lundstedt today,
Thursday, 19 September 2013, at the company’s Capital Markets Day in Södertälje,
Sweden.
The potential for buses is 15,000 units and for industrial and marine engines
20,000 units by 2020. Scania’s growth is based on economic activity. Although
the next few years may be tough in the European market, Scania expects that
European economies will recover in the long term. A significant part of the
volume increase by 2020 will come from markets in Asia, Eurasia and Africa.
 
“We have built a strong position in Europe for the coming years with our broad
Euro 6 engine range as well as Scania Streamline and Ecolution by Scania − that
is products and services that help lower fuel consumption for our customers and
thereby reduce environmental impact. Meanwhile, the trend towards increasing
demands for transport efficiency in emerging markets is favourable to us and we
are now focusing on expanding our presence further in key segments,” explained
Lundstedt.
 
Focusing on service business
Scania is continuing to develop its service business and strengthen its presence
in emerging markets. The rate of investment in the service network in recent
years has been about SEK 1 billion annually. Demands from customers for lower
fuel consumption and higher vehicle uptime represent great opportunities to
boost Scania´s market share on the service side and to broaden its service
portfolio.
 
“Over the past 20 years, we have developed new concepts in the service business,
and today, we have a leading position. Now we will increase this volume while
increasing our presence in new segments with a large service content. Our
ambition is to increase the share of services from 20-25 percent of Scania’s
total revenue in recent years to 25-30 percent over an economic cycle,” said
Lundstedt.
 
At the production units, Scania will raise its capacity by investing in advanced
processes at existing production units. Scania has begun boosting its technical
capacity to 120,000 vehicles, which will represent a total investment of SEK 1.5
billion over a three-year period.
 
Opportunities with the Volkswagen Group
To further strengthen the product portfolio in the long term and take advantage
of economies of scale and skill, Scania has identified opportunities for
cooperation with the Volkswagen Group. Scania, together with MAN, is examining
areas such as axles, gearboxes, commodities and hybrid drive components. A
number of the feasibility studies that have been completed have shown
interesting synergy opportunities for Scania and work continues with these
opportunities. Furthermore, exchange of knowledge and benchmarking are occurring
between the Volkswagen Group and Scania in IT, production and logistics,
including working methods and practices.
 
Since 2008, Scania has had a policy ensuring that any cooperation with related
parties is subject to corporate benefit for Scania and is handled according to
the arm’s length principle. Martin Lundstedt explained how this policy has
formed the basis of the decision making process and workflow, that the company
has implemented.
 
“At the 2014 Annual General Meeting, we will give a summary of the processes
implemented at Scania, to safeguard the interests of Scania and all its
shareholders in such cooperation projects. The focus will be on how transactions
between Scania and related parties are monitored and documented in order to make
them auditable”, Lundstedt said.
 
Scania has also assigned Scania‘s external auditors to pay special attention to
these processes, as well as the compliance with them. As earlier communicated,
at the 2014 Annual General Meeting, Scania’s auditors will thus comment upon
this.
 
Market situation
Lundstedt also commented on the market situation in the truck segment during the
third quarter of 2013.
 
“There is a replacement need and an interest among customers to invest in Euro 5
trucks before year-end. In light of this, we did not see the normal seasonal
downturn in European order bookings during July and August. In Latin America, we
had somewhat lower activity compared to the high level of the previous
quarters.”
 
For more information about the Capital Markets Day, visit www.scania.com/cmd2013
Scania is one of the world’s leading manufacturers of trucks and buses for heavy
transport applications, and of industrial and marine engines. Service-related
products account for a growing proportion of the company’s operations, assuring
Scania customers of cost-effective transport solutions and maximum uptime Scania
also offers financial services. Employing some 38,600 people, the company
operates in about 100 countries. Research and development activities are
concentrated in Sweden, while production takes place in Europe and South
America, with facilities for global interchange of both components and complete
vehicles. In 2012, net sales totalled SEK 79.6 billion and net income amounted
to SEK 6.6 billion. Scania press releases are available on
www.scania.com (http://www.scania.com/se)
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