Building on the past. Preparing for the future.
Reducing the impact that the ecosystem of transport and logistics has on climate change cannot wait. Scania increased efforts further to drive the shift towards sustainable transport in 2019, whilst also continuing to grow and delivering record high volumes.
Our planet and its climate will not wait. Science dictates that we as a society must half CO2 emissions every decade to meet the global target as defined in the Paris agreement. Scania is an engineering company, so listening to science is second nature to us. The heavy duty transport industry is a major contributor to worldwide CO2 emissions, and as a consequence it holds an important key to meeting the Paris climate target. As a large player in this industry, we at Scania have taken a clear stance and decided that we want to take a leading role in driving the shift towards a sustainable transport system.
This has far-reaching implications and we know that it is not an easy journey we have ahead of us. However our commitment is firm and in 2019 we manifested this by signing the United Nations Business Ambition for 1.5 Pledge. In doing so we are stepping up and committing Scania to setting science-based targets aligned with limiting global temperature rise to 1.5°C above pre-industrial levels.
More than 95 percent of Scania’s environmental impact happens when our products are in use. As we are now committing to setting these science-based targets, they cover not only the emissions related to our own operations, but also the emissions from our trucks and buses when they are on the roads, used by our customers. Committing to a Scania-target that includes the footprint the vehicles generates, after they leave our factories, is a bold move but also absolutely necessary. We welcome the challenge, feel confident in our ambition and will work close with our customers to fulfil the target.
"Sustainability is the opportunity for both growth and innovation!"
President and CEO, Scania
At Scania, we have long been working to make sure that our customers have the most fuel efficient engines in the industry. It has always made perfect business sense for both us and our customers; it is good for both profitability and sustainability. Energy efficiency continues to be crucially important in our endeavour to minimise the impact from our products and we also continue to increase our efforts to make sure that renewable biofuel options are more broadly available. Biofuels are a key enabler to transforming the transport industry and we are sitting on this golden opportunity we could switch to, using technology available in basically all heavy commercial vehicles globally. Not tomorrow. Not in a few years. Today!
Therefore, we need to increase the production of biofuels and have a fact-based discussion about the potential. Too much time has already been wasted, this needs to happen now.
Another key transformational force in transport is different electrified solutions. Scania is working with a broad palette of solutions including both hybrids and fully electric vehicles. We are also looking in to different kinds of charging solutions such as plug-in charging, charging through hydrogen-powered fuel cells or through pantographs either standing still or whilst moving on electrified roads. We will continue to invest in electrification and whilst charging infrastructure is still largely lacking and the customer’s investment in electric vehicles on the heavy commercial side is still difficult for most customers to make without financial backing, we are clearly seeing an increased appetite for electrified solutions.
In 2019, at Busworld we launched our first series produced battery electric vehicle – the Citywide battery electric bus. In keeping with our modular approach, we will continue to develop our electric bus range with more variants.
Strong year but tougher times ahead
2019 was a year of records. We have never sold more vehicles, and our turnover and profit were higher than ever. We reached our highest market share in Europe ever.
We finalised the roll-out of our new truck generation in Latin America in 2019, marking the end of a 10-year global project. We can conclude that it has been a great success and our customers are very pleased with the performance of the truck.
In 2019, signals came of a slowdown in demand in some of our key markets, and we are entering 2020 facing headwinds after several years of a generally hot market. Our business is cyclic and our global production system, is tailored to be flexible enough to continually adapt to changes in the demand situation. In addition, we are also adapting overall cost levels to the shift in market. We do this by working together across the organisation and leaning safely against on our core values and established way of working; we call it The Scania Way.
"Scania’s modular system will play an equally important role in the future."
Rising to future challenges
As we are entering a new decade we know that it will contain some of the most radical and exciting changes that our industry has seen since the internal combustion engine replaced the horse and the steam engine one hundred years ago.
True to the Scania philosophy we continue to invest in new technologies that lay ahead of us, whilst we at the same time, are investing in measures that improve our customers’ profitability here and now.
In preparation for the larger technology shift, we have also continued with significant investments in autonomous vehicles, connectivity and electrification. We are already reaping the benefits from those investments and have solid offerings, customer collaborations or pilots in all areas.
With an increased share of components for electrified and autonomous vehicles, Scania’s modular system will play an equally important role in the future as it has in our past where it has been a true success factor. Modularisation is about ensuring a flexibility to tailor a solution to meet any customer’s request, but it is also about ensuring efficiency and economies of scale across our portfolio.
In June 2019, we celebrated TRATON GROUP’s IPO in both Stockholm and Frankfurt. By being part of the TRATON GROUP we are equipped with extra competence and muscle force to invest, and this adds competitive advantages,
not just for Scania and our customers, but also the Group as a whole.
The commitment and the family
I hope that more players in the corporate world will wake up to the fact that working with sustainability is not only about doing the right thing, and having a deeper purpose for both individuals and an organisation, it also makes perfect business sense. Sustainability is the greatest opportunity for both growth and innovation! Those who don’t understand that will be missing out.
At Scania, sustainability is not something added on top of what we already do. We have always focused on lean work models, efficiency and elimination of waste and as such sustainability is built into the organisation and operations naturally.
September 20, 2019 was a special day. It was Scania Climate Day. We stopped operations at Scania’s head office, in our global production system and in sites across the world for one hour. Our 51,000 employees participated in training sessions for climate science and the impact our own industry has on climate change. I was moved by the passion I witnessed from people in every part our organisation. Climate Day served as a confirmation that sustainability is ingrained in who we are as people, and as a company. It also showed that our purpose – to drive the shift towards sustainable transport – has really taken root.
Scania’s success in 2019 would not have been possible without the hard work and commitment of more than 51,000 people who make up our Scania family. Diversity is one of our strengths and the incredible talent we have within our company is what we build on for the future, and we are ensuring that our people are equipped with the skills they will need going forward. At the same time, our purpose is drawing exceptional new talent to Scania from across the world.
Our purpose also resonates extremely well with other stakeholders, like our partners and suppliers, and customers, who I count as part of the family. This is very important because we need all of them on our journey ahead, to work together to drive the shift towards sustainable transport.
President and CEO, Scania