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Scania foresees a bright future

“Overall, 2003 turned out to be a rather good year, and this year has started better than expected. Our R-series has been very well received in our sales organisation,” said Leif Östling, President and CEO of Scania at today’s Annual General Meeting in Södertälje when he summarised 2003 and outlined prospects for the next few years.

Mr Östling noted that 2003 was a good year for Scania despite an initially sluggish world economy, with a generally subdued economic outlook. The total market in western Europe ended up largely unchanged. The economies and markets in eastern and central Europe performed well, as did those in the Far East and the Middle East. South America also recovered.

During 2003, there was a continued trend towards Europe as a whole becoming an increasingly integrated market. In recent years, exports of used trucks to central and eastern Europe have risen sharply, and they will increase at the same pace over the next few years.

“The flow of used vehicles has meant that the demand for new trucks in western Europe has smoothed out over the business cycle. This trend will persist during the massive build-up that central and eastern Europe are in the midst of,” Mr Östling noted.

In addition, the manufacturing sector is moving production at an ever faster pace from western Europe to central and eastern Europe. This is generating a demand for fast, flexible transport services. The eastward enlargement of the EU will accelerate this trend.

“Consequently, the demand for high-quality trucks is increasing all the time. Local manufacturers cannot keep pace technologically. We have seen this in countries like Poland, the Czech Republic and Russia – countries where Scania has a strong position today.”

The R-series, Scania’s new truck range, which was unveiled on 31 March this year, is based on Scania’s experience from the 4-series and on the many suggestions and opinions gathered during extensive testing among customers.  

“With the R-series, our demanding customers are getting the best truck Scania has built,” said Leif Östling.

Over the next few years, Scania will gradually replace its entire current product range with new products.

Sales of bus chassis during 2003 were the highest in Scania’s history. The total market for heavy buses in Europe declined, but Scania increased its sales in several of the major markets. As a result of the restructuring of bus and coach operations that Scania has implemented, these operations are well on their way towards achieving the same profitability as trucks.

China an important market – over time

In the expansive Chinese market, demand for Scania’s type of vehicles is still limited. The reason is that logistics systems and road networks are not yet as developed as in Europe and the United States. The market for western European heavy vehicles is no larger than 4,000–5,000 units per year. Scania has started to build up a sales and service organisation, with the aim of making it a long-term, profitable business.

“When the time is ripe and the volume is sufficiently large, we may conceivably establish vehicle manufacturing there,” Mr Östling explained.

Nearly 800 people participated in the Annual General Meeting.

Leif Östling’s entire speech has been posted on Scania’s web site.

Scania is one of the world's leading manufacturers of trucks and buses for heavy transport applications, and of industrial and marine engines. With 29,100 employees and production facilities in Europe and Latin America, Scania is one of the most profitable companies in its sector. In 2003, sales totalled SEK 50.5 billion and income after financial items was SEK 4.6 billion. Scania products are marketed in about 100 countries worldwide and some 95 percent of Scania’s vehicles are sold outside Sweden.

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www.scania.com

[N04014EN] H-Å Danielsson