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Scania completes changeover to global product platform

Tomorrow, Thursday 12 March, Scania will be introducing its 4-series trucks on the Latin American market. In doing so, Scania becomes the only heavy truck manufacturer in the world capable of producing vehicles of the same generation throughout its global production structure.

Scania's President and CEO Leif Östling and the Executive Management of Scania Latin America will hold a press conference in São Paulo, Brazil, for roughly 200 invited journalists. Additional information will be made available at the press conference, which is to start at 2:30 p.m. Central European Time. This information will be available on Scania’s website at www.scania.com

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With the introduction of the 4-series in Latin America, Scania will have completed an investment programme that begun in the early 1990s. The objective is to use a common global production structure for trucks and buses, which is even more cost-effective than that for the previous generation, as well as to increase production capacity. Scania has invested more than USD 300 million to complete the changeover in the Latin American production system.

The changeover of truck production to the 4-series at Scania's European production units began in the autumn of 1995 and was completed during the second half of 1996. The investment programme itself continued during 1997 with the start of the changeover of bus production.

By switching to a common product platform, Scania will be increasingly capable of exploiting economies of scale with regard to suppliers as well, and it will achieve improved flexibility in meeting market fluctuations around the world.

The production of transmissions in Latin America has been concentrated to Tucumán in Argentina, whereas the production of engines, axles and cabs takes place in São Paulo, Brazil. Truck assembly is carried out in plants located in Argentina, Brazil and Mexico. Brazil is also the centre of Scania’s production of bus chassis as well as industrial and marine engines.

In conjunction with the changeover, Scania has also invested in substantial environmental improvements. In the autumn of 1997, Scania's Latin American operations were the first within Scania to receive environmental certification in accordance with ISO 14001. These measures are now being introduced in Scania's European production system.

Scania established a new sales record in Latin America in 1997: 11,500 vehicles (9,649 trucks and 1,829 buses).

A 40-year presence

Scania has a 40-year-old tradition in Latin America. Sales started in the late 1950s in Brazil, with production in that country starting in 1962. This was followed by the establishment of operations in Argentina, where component production and assembly operations began in 1976. In 1995, the first truck was assembled in Mexico. Today, Scania is now represented in all Latin American markets.

Scania’s operations in Latin America are controlled by its wholly owned company Scania Latin America (SLA) Ltda, with Head Office in São Paulo. SLA consists of an industrial unit – incorporating the production units in Argentina, Brazil and Mexico –and a commercial unit with overall responsibility for all sales in Latin America. Sales in Argentina, Chile, Brazil, Mexico and Peru are handled by wholly owned subsidiaries of SLA. The other Latin American markets have been integrated into Scania Latin America with independent representatives in each market.

For further information, please contact Magnus Hahn, Manager Financial Communications, tel. +46 8 553 835 10.

Scania is one of the world's leading manufacturers of trucks and buses for heavy transport applications, and of industrial and marine engines. With 23,800 employees and production facilities in Europe and Latin America, Scania is one of the most profitable companies in its sector. In 1997, turnover totalled SEK 39,700 million and profits after depreciation SEK 2,800 million. Scania products are marketed in about 100 countries worldwide and approximately 95% of total production is sold outside Sweden. Bus manufacture takes place in Sweden, Brazil, Denmark, France and Poland.