Scania President and CEO: Capturing new business
"Operational services are major growth areas for Scania. They possess business potential way beyond the scope of traditional truck manufacturing – up to three-to-four times the value of vehicle sales," said Leif Östling at a press conference in Hanover today. "Scania is now much more than just a supplier of heavy trucks and buses. Acting as a business partner, we promote the customer's profitability as well as our own."
Speaking at the IAA commercial vehicle show in Hanover today, Mr. Östling presented Scania's views on the development of the European truck market in the years to come.
"Scania Vehicle Management opens up new business for us. It is our response to the developments on the market, which have created a new situation for the hauliers in Europe, much more competitive than ever before.
"Scania identified this trend in the early 1990s, when deregulation started of the European transport market. Together with progressive customers we looked at ways of improving profitability, despite stiffer competition. This led to the establishment of Scania Vehicle Management UK, a company specialised in tailoring truck deals to each customer's needs. Now we are implementing this concept all over Europe, with local adaptations to suit conditions in different countries.
"As a vertically integrated manufacturer, Scania has full control of the engineering process, giving us a competitive edge in the market. We can optimise the performance of a Scania vehicle for maximum operating economy and minimum impact on the environment. Our industrial and commercial systems can interact to provide solutions as closely tailored to the business needs of our customers as possible.
"With our new global product range, a stronger organisation and our vehicle management concept, Scania has the solutions necessary for our most demanding customers," concludes Leif Östling.
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Vertical integration – what's the point?
Scania is a vertically integrated manufacturer, meaning that the main components and systems are developed and produced in-house. From a vehicle management point of view, Scania's approach to vertical integration opens several unique possibilities:
"Scania has full engineering control throughout the chain, from R&D to manufacturing, marketing, sales and servicing," says Mr Östling. "Our engineers think of the vehicle as a whole, as a complete transport tool for its user.
"With the help of electronics, our rear axles and gearboxes already talk to our engines, automating the driving process and optimising performance and fuel consumption. This powertrain management system, which we call Scania Opticruise, is a milestone on the road to the truck of the future. In the future it will be able to talk to the brakes and other electronic systems.
"Scania's modular product system enables individual transport requirements to be met on a very detailed level. We are now in the process of introducing a new modular generation of engines. They all share a common combustion chamber, which we will build in several configurations. Highly advanced injection and combustion technology enables us to optimise operating economy for the customer, while minimising the environmental impact.
"Our dealers have the resources to act as professional partners to our customers, offering and developing solutions that improve business for both parties. They are in the right places, equipped with the latest in hardware and software – ready to act at any time.
"Vertical integration also has environmental implications. Full engineering control enables us to consider the whole life-cycle of the truck. We minimise the environmental impact already on the drawing board and optimise the efficiency of the truck in operation. This also reduces the environmental load during repairs, servicing, scrapping and recycling."
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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 income after financial items SEK 2,800 million. Scania products are marketed in about 100 countries worldwide and approximately 95% of total production is sold outside Sweden.