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Scania Year-end Report January-December 2005

Scania had a strong year in 2005, setting new records for invoiced volume of both vehicles and services. Order bookings and vehicle deliveries each rose by 4 percent. Scania’s operating income rose by 4 percent to SEK 6,859 m. Net income increased by 8 percent to SEK 4,665 m., which resulted in earnings per share of SEK 23.33 (21.57). The Board of Directors proposes a dividend of SEK 15.00 (15.00) per share.

SCANIA, FULL YEAR 2005 – COMMENTS BY THE PRESIDENT AND CEO

Scania had a strong year in 2005, setting new records for invoiced volume of both vehicles and services. Order bookings and vehicle deliveries each rose by 4 percent. Scania’s operating income rose by 4 percent to SEK 6,859 m. Net income increased by 8 percent to SEK 4,665 m., which resulted in earnings per share of SEK 23.33 (21.57). The Board of Directors proposes a dividend of SEK 15.00 (15.00) per share.

Demand for Scania trucks improved during 2005. In western Europe, order bookings for trucks gradually increased during the year. Scania’s market share strengthened to 13.2 (13.0) percent. After a period of weakness early in the year, order bookings increased in central and eastern Europe. In Latin America, demand was unchanged for 2005 as a whole, but however rose during the fourth quarter. In Asia, order bookings fell during the year, while the fourth quarter showed a recovery. In other markets, demand increased both during the full year and in the fourth quarter.

The strong trend in order bookings for trucks during the fourth quarter will have a positive effect on deliveries during the first half of 2006. Customers’ good experiences with Scania’s truck series and strong engine range are contributing to a favourable trend in demand for Scania trucks. Order bookings are also affected by the fact that a number of European customers are accelerating investment in vehicles with Euro 3 engines before the Euro 4 environmental regulations enter into force in the autumn of 2006. This will have an effect on order bookings in the second half of 2006. Increasing transport needs in western Europe and good demand for used trucks in central and eastern Europe point towards a favourable long-term market for trucks in Europe.

Bus and coach deliveries during 2005 were higher than ever before. Order bookings were unchanged, with a stronger first half than second half. In the European market, demand increased somewhat. In Latin America, demand strengthened, with an especially clear upturn in Brazil. In Africa and Asia, order bookings declined. In Industrial and Marine Engines, Scania noted record volume in 2005.

Service-related sales and Customer Finance reached new peak levels during 2005. Scania is in a very good starting position to enlarge its service business, with a leading range of vehicles and an extensive service network with proximity to customers in Europe and elsewhere in the world. Scania is now attaching increased importance to expanding this business further as well as taking advantage of synergies.

Adjustment of the number of employees at European production units, after extra staffing in connection with the introduction of the new truck range, was concluded as planned by year-end 2005. The on-going review of the production of axles and gearboxes in Sweden is scheduled for completion during the first quarter of 2006. This review is one step in Scania’s continuous efforts to boost productivity and strengthen its competitiveness and is expected to lead to substantial cost savings.

During the fourth quarter Scania bought its distributor in Taiwan. As a result, Scania is expected to further strengthen its position as the largest non-Japanese heavy truck make in this market. During the year, Scania also acquired the Universal Auto dealership group in Belgium. As a result, Scania owns nearly 80 percent of its Belgian sales and service network. Scania is continuing to expand its Customer Finance activities and has recently started a finance company in Turkey.

Scania is gaining recognition for its work to improve the environment and road safety. In November, Scania was awarded the Premio Europa prize for being the best at offering trucks with engines that meet tougher environmental standards. Scania also received a Prince Michael International Road Safety Award. Scania was nominated for this award for its efforts to improve professional driver training, among other things through the Young European Truck Driver competition, and for its continuing work to develop vehicles that are safer on the road.

For the third consecutive year, Scania has been named the most admired truck company in Brazil. High-quality products and services, as well as customer relations in general, were decisive factors.

During 2005 Scania completed its offer for Ainax, which was accepted by 96.3 percent of Ainax’ shareholders. This means that Ainax is a subsidiary of Scania. Scania’s intention is to carry out a liquidation of Ainax during 2006.

For more information please see attached pdf.

Contact persons

Cecilia Edström, Corporate Relations tel. +46 8 5538 3557 mobile tel. +46 70 588 3557

Stina Thorman, Investor Relations tel. +46 8 5538 3716 mobile tel. +46 70 518 3716

Gunnar Boman, Corporate Communications tel. +46 8 5538 9510 mobile tel. +46 70 550 8606