“We have a challenging period ahead of us, but this will be entirely possible to achieve,” said Leif Östling, President and CEO, said at Scania’s Capital Markets Day.
About a hundred analysts, investors and journalists from various parts of Europe had travelled to Södertälje on 20 May to learn about Scania’s plans for the next several years. In addition to Leif Östling, President and CEO, five other members of the company’s Executive Board spoke at the event, presenting their views of Scania’s future based on their respective areas of responsibility.
“This will happen as it always does at Scania, in small steps. We will take advantage of the hidden resources that exist in our organisation in order to boost production by 10,000 vehicles each year,” Mr Östling said from the stage of the Marcus Wallenberg Hall.
Scania has set a sub-target of 100,000 units in 2010, which means ten vehicles per year per production employee – twice the level of 2000. When the company achieves its vision in 2015, the target is that each of these employees will produce 15 vehicles per year.
Mr Östling described the truck market as stable and said that Scania is well on the way to achieving its target for 2010. Meanwhile one must be aware that there are always external factors that may affect these plans. At present, these include the credit crisis and the impact it may have on economic conditions.
Martin Lundstedt, Group Vice President, Franchise and Factory Sales, declared that Scania will grow with the market while boosting its share of existing markets and moving into new markets, along the road to 150,000 vehicles. | 
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| Martin Lundstedt |
“We have an extremely dedicated organisation all over the world. It will be a tough but rewarding journey,” he said.
Europe including Russia will remain Scania’s main market in 2015 but South America, Asia and the Middle East are expected to have grown in importance. As an example, Mr Östling cited Iran and Iraq. When the political situation stabilises, they will be very attractive markets.
“The Scania brand is very strong in these countries,” Mr Östling said.
Given the planned increase in production, a million Scania vehicles will be operating around the world by 2015, almost double the number today. It is important for the company to remain close to the customer by having a local presence, observed Urban Erdtman, Group Vice President, Sales and Services Management.
| “In Russia, for example, the expansion of Scania’s own service organisation is continuing. Meanwhile we are extending our network by adding more independent franchisees,” he said.
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| Urban Erdtman | |
| It is also crucial to shorten the lead time between order and delivery. One way of doing so is by producing more standard vehicles that are ready for use, direct from the factory. According to Hasse Johansson, Group Vice President Research & Development, this type of solution is already being implemented. | 
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| Hasse Johansson |
Scania will continue to allocate four percent of its sales revenue to research and development, and one of its top-priority areas is fuel efficiency. This includes everything from development of new engines to driver training.
Achieving the 150,000-vehicle vision will require continuous improvements in day-to-day production. Per Hallberg, Group Vice President Production & Procurement, illustrated this with a video from Oskarshamn showing how employees no longer need to spend so much of their time fetching parts for cab assembly.
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“This does not mean working harder. Instead it is a matter of working smarter,” Mr Hallberg said.
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| Per Hallberg | |
| Today Scania’s profitability is very good. Jan Ytterberg, Chief Financial Officer, emphasised that Scania’s planned growth must occur while remaining profitable. |
| Jan Ytterberg | |
Before it was time for lunch and the subsequent tour of axle and gearbox production and the chassis assembly workshop, the Capital Markets Day presentation ended with a brief question period. Analysts were of course interested in Volkswagen, Scania’s main shareholder. Leif Östling seemed pleased with the prevailing ownership situation.
“We have a stability of ownership that we have not enjoyed since 1999, when Volvo became a shareholder in Scania. I am amazed at how well we have managed to deal with the turbulence related to the ownership issue in recent years. It shows that this is an extremely strong company,” Mr Östling said.
