In 1910, Surahammars Bruk tried in vain to sell the capital-intensive Vagn-fabriken. The Board considered a closure, but a proposal persuaded it to think again. The proposal came from the Managing Director of Maskinfabriks-aktiebolaget Scania in Malmö, Per Alfred Nordeman.

Scania, whose product range included bicycles, had successfully begun small-scale car production early in the century. At first it bought finished engines, gearboxes and parts from France and Germany. Only in 1908, when the company had sold some 70 cars, did it introduce its own engine range. Unlike Vagnfabriken, Scania immediately managed to turn a profit in its new field of operations. In 1910, the Board decided to phase out other product areas to focus all resources on engine- and car-building. Mr Nordeman, who envied Vagnfabriken's highly respected coachwork shop, contacted Surahammar's management. In November 1910, agreement was reached to form a new company, AB Scania-Vabis, which took over all engine and car production. Meanwhile, all other operations at both Vagnfabriken and Scania were phased out. Surahammars Bruk received three-sevenths of the shares in the new company, but the Board, disheartened by 14 years of unprofitable car production, sold the shares to individual investors Per Alfred Nordeman became the first Managing Director of Scania-Vabis. Its operations were immediately successful and expansive. Scania-Vabis bought Vagnfabriken's other plant in 1912. The head office, along with Nordeman and other Scania executives, also moved to Södertälje. All development and production of engines, cars and light goods vehicles were located there, while trucks and other heavy vehicles were made in Malmö.

Before the First World War, Scania-Vabis expanded with a high degree of self-financing. By today's standards, however, its operations were relatively modest. In 1915, it delivered 151 vehicles: 76 cars, 74 trucks and one bus. Exports to Russia and elsewhere accounted for more than 30 percent of sales. The outbreak of the war halted Scania-Vabis' exports outside the Nordic countries, but the shortfall was more than offset by the fact that vehicle imports ceased and that the Swedish armed forces placed large orders.

In 1916, net profit exceeded 25 percent of sales. Shareholders were pleased by a bonus issue and, despite the expansion, sizeable dividends. During 1912-1916, the annual dividend amounted to between nine and twelve percent of the share capital. As a successful company, Scania-Vabis made large-scale investments.

In 1916 the Malmö plant was expanded and the Södertälje plant built its own foundry and a new forge. Meanwhile, the company shifted to electrically-powered equipment. The following year, Scania-Vabis began backward integration to ensure deliveries of raw materials and semi-finished goods despite wartime blockades. It purchased Vikmanshytte Bruk, which had secure ore supplies for iron and steel production, plus Bruzaholms Bruk with its large pig-iron foundry and workshops for making production machinery. These investments were financed by the Stockholm-based investment company Investor, which bought newly issued preference shares, and Stockholms Enskilda Bank, which provided loans. This turned Scania-Vabis into a company in the Wallenberg industrial and banking sphere.
 
As the war drew to a close, Per Nordeman had grandiose plans. Before the war, hauliers had rejected newfangled trucks and continued to use horses and wagons. Nordeman, strongly influenced by Henry Ford's amazing success in the US, was nevertheless convinced that hauliers would abandon their horses soon after the war. Scania-Vabis would get an early start and become one of Europe's leading standard light truck-makers.

In 1919, the company made a strategic decision to focus on standard trucks. It would immediately stop making buses, fire engines and other special-purpose vehicles and gradually phase out car production. It expanded its production capacity. A nation-wide distribution and service organisation began to take shape. These proud expansion plans did not correspond to actual developments, however. Civilian demand for trucks was delayed by a deep depression. Huge losses followed. Meanwhile, rapid wartime inflation gave way to a brutal deflationary policy. The value of loan-financed industrial firms no longer equalled their debts. Scania-Vabis saw its equity/assets ratio deteriorate. A liquidity crisis loomed.

Early in autumn 1919, the imbalance in payment flows pushed the company towards an increasingly untenable situation. In November, Mr Nordeman and other top executives were forced to resign. His dream and life's work had collapsed.