Scania starts building its third global production base in Rugao

The heavy duty truck market is undergoing unprecedented change. What used to be a stable and traditional industry, is now at the forefront of incorporating the latest innovations into its products and services. To meet with the climate crisis society demands that road transports will accelerate decarbonization. Scania, as a world leading brand is driving the shift toward sustainable transport solutions.

Since setting up Scania Rugao Production Base in 2020 the original scope has been expanded and the investment is much higher than planned. After more than one and a half year of structured planning and preparation, by a large, diverse and international project team, on June 10th, Scania starts the construction of one of the most modern production facilities in the industry, here in Rugao. Start of production is expected to take place in 2024.

Based on Scania’s unique modular production system, the vehicles developed and produced in Rugao will serve both the Chinese and export markets. With a localization rate above 80% and by using the latest technologies the factory will be able to offer vehicles adapted to the Chinese conditions so that customers can enjoy very competitive operational economy. These vehicles will be compliant with the most stringent emissions and fuel consumption limitation standards. The Chinese transport market is becoming increasingly specialized and customers will be able to place orders for customized vehicles with delivery times much shorter than importing complete products from abroad. This will strengthen the competitiveness of our customers in China.

Furthermore, since the production system is based on the extended modular concept Scania is prepared  to deliver customized new energy vehicles from the Rugao factory.

Christian Levin, CEO of Scania and TRATON GROUP, stated that he is very confident with the future development of the Chinese transport and logistics market and that this offers great opportunities for Scania in China.

“Since 1965, Scania has been a leader in introducing new ideas and concepts in the Chinese transport industry. Compliance and premiumization are today two clear trends in the Chinese market. The timing of the industrial investment in China is perfect and will enable Scania to capture higher sales volumes in the market.” says Mats Harborn, Scania China Group President.

Scania is globally committed to the science based targets. Consequently the Scania Rugao global third production base will from the start be a zero emission factory using green electricity and renewable fuels. Biogas made from local waste water sludge, food waste and other biowaste will be one of the main energy sources making the factory part of the circular economy.

“We hope that Rugao will be a model city in producing both biogas for industrial use, but also upgraded to fuel gas for buses and trucks”, Mats Harborn continues.

Excellent products require an excellent environment for its workers and for the flow of goods in and out of the factory. The production processes are designed to optimize resource utilization inside the factory as well as in the Chinese supplier system. The recruitment and training of workers for the factory have already begun and the first batch of production engineers are since the beginning of May in Sweden receiving training. Scania has also established cooperation with vocational schools and universities in Rugao and Nantong.

“By focusing our investment resources on value adding and sustainable contents the completely new Rugao factory is aimed to be a role model for the HDT industry and to show the way towards a sustainable future”, says Ruthger de Vries, President Scania Production Asia.

Scania recognizes that many of the technologies that are shaping the future of road transports are being developed in China. By making Rugao its third global production centre Scania will be able to integrate into Chinese innovation eco-systems in electrification, autonomous driving, intelligent connected vehicles and other areas. Combining strict quality standards with new technologies Scania is since many years developing deep and long-lasting partnerships with leading suppliers in China. Scania’s industrial presence will further help lift the levels of supply chains in China which will support the creation of supplier cluster.

Our business model, the modular system and the Scania Way together with our local presence in Jiangsu province provide world class foundation, so that Rugao can become an important building block to drive the shift to sustainable transport system.