UK is Scania No1

Scania (Great Britain)’s performance in 2016 has given the Swedish multinational much to talk about as Andy Izatt reports

Globally Scania delivered 81,350 trucks, buses and coaches in 2016, its 125th anniversary year – an increase of 6% over 2015. The UK is its largest market and at a briefing in London last week the trade media was given an overview of developments at Scania (Great Britain). However, the evening started with a presentation by Executive Vice-President Commercial Operations Mathias Carlbaum who described Scania’s global performance and objectives.

Global perspective

“Our corporate results will be presented in March so I’m not able to go into the financial figures,” Mathias explained. “Nevertheless I will try and give some insight into our performance in different parts of the world. Deliveries last year were up 6% globally and in Europe we had 14% more of the market (51,196 vehicles delivered). The UK was our biggest worldwide in 2016. The previous year it was the second largest.
“In Latin America the total market in Brazil just three years ago was 92,000 heavy vehicles. Last year it was [wlm_nonmember][…]

[/wlm_nonmember][wlm_ismember]down to 30,000 so two thirds of the market had gone. We did achieve a share gain, but nevertheless it was difficult. However, looking at surrounding countries, Argentina is strongly back and is an important market.

“The market in China is 500,000 vehicles so it is huge. Because of economic development the infrastructure is now in place and the transport industry is moving forward. Chinese manufacturers are increasing the quality of what they’re delivering, but the European base which is primarily an importer one is now starting to grow very quickly. We saw considerable growth in 2016 and we see that trend continuing in 2017. Overall it was a strong performance by Scania in 2016.

“I would like to talk about Scania’s focus on ‘Sustainability’ – driving the shift in transport. For Scania it’s more than the environment. It’s how we conduct our business. It’s about being responsible and delivering value.

“Sustainable transport we can relate to the major global trends which are defined as organisation, digitalisation and sustainability. From that in our sector we can see the strong trends are connectivity vehicles, electrical vehicles and autonomous vehicles. All of these are not only future visions. To a greater or lesser extent, they’re happening now.

“Sustainable transport is all about moving people and goods while contributing to economic and social development without jeopardising human health and safety and not endangering anyone. We have three pillars: Energy efficiency, alternative fuels and electrification, and smart and safe transportation.

“For us at Scania we are looking for a whole value chain when it comes to resource and energy efficient operations. We are focusing both on production and sales channels. How can we optimise our energy utilisation in our whole value chain?

“We also have a strong focus in the company now on diversity and inclusion. How can we attract, keep and evolve talent? How can we recruit the right people? Health & safety, human & labour rights, anti-corruption, and community impact – these are the fundamentals that will drive partnership driven leadership that enables us to perform when it comes to sustainable transport.

“We are a very strong value based company which has three core values that we base all activities upon – respect for the individual, customer first, and eliminate waste. Eliminate waste starts with our Scania Production System, but also now applies to Scania retail.

“To make sustainable transport happen here and now we have to work together with the buyers of transport services, with our customers the transport companies and also with fuel suppliers. Fuel suppliers facilitate the infrastructure that enables us to offer our alternative fuel products.

“As I said energy efficiency is one of the three pillars of sustainable transport. Throughout the Euro emissions cycles we have reduced fuel consumption by an average of 1% per year and that will continue. However, we do have a golden opportunity now apart from working on the efficiency of engines, rolling resistance and air drag to combine this with technology to decrease cost for our customers and increase their revenue.

“An example of this is the new generation products where we use the connected information from a customer’s application, his real utilisation to optimise the specification and fuel efficiency of the coming vehicle.

“Real-time training on driver behaviour and efficient repair and maintenance of the vehicles to optimise the fuel consumption. This can be done through flexible maintenance that is customised based on real utilisation and undertaken at the right time and to the right extent for each customer.

“Then there’s alternative fuels and electrification. All Scania vehicles can run on alternative fuels and this is the range we offer and the impact on CO2 reduction – Natural Gas -20%, Biogas -90%, HVO -90%, Biodiesel -66%, Ethanol -90% and Hybrid -92%.

“German Chancellor Angela Merkel has been shown a 2km route in mid Sweden that is an electrical (gantry electrification) highway which was completed in cooperation with Siemens. Now there’s an agreement between Sweden and Germany on how to extend this trial on a larger scale in both countries.

“We have also inaugurated an electric hybrid bus operation in our home town of Södertälje. Two buses take seven minutes to recharge through inductive charging at the end stops of a 10km route. We can already provide interesting electrical solutions that we believe will be the start of something huge in the coming 10 years.

“When it comes to smart transport we have ‘platooning’ (enabling trucks to drive closely together in convoy) initiatives together with our sector colleagues. Next year we will start regular operation in Singapore. Also, Scania Growth Capital has been founded. It has been setup outside Scania with funds through Scania that will invest in start-ups working with new technology related transport.”

UK spotlight

Scania (Great Britain) Managing Director Claes Jacobsson reported a “fabulous year” in 2016. “It was one of our busiest ever with record performances in many areas,” he said. “We fully engaged with the programmes initiated by our colleagues in Sweden, including Scania 125th anniversary celebrations and press events, such as the autonomous truck demonstration we did last May. Then came the big one, the launch of the Next Generation Scania (truck) last August in Paris. That was followed by a series of customer ride and drive events in Sweden. Some 900 customers joined us to experience our new products for themselves. We know we have a busy year in front of us.”

For his part, Sales Director – Bus, Coach & Engines Tony Tomsett explained that Scania Great Britain sold 826 engines in 2016. “That makes us number one by volume in Europe for Scania engine sales,” he said. “Our order book continues to grow.

“There was an excellent increase in forward orders for the bus and coach fleet sales department over 2015. We have seen the return of orders from loyal fleet customers specifically in the bus sector. We have great products, single-deck, double-deck or even double-deck coach and all are very well received.

“We had our first order for biogas double-deckers for Reading and we have a great order for biogas buses from Nottingham City Transport. More biogas orders will be announced soon. Well-structured environmental gas statuary through the support of the Scania factory, has led to numerous forward enquiries for the Scania/ADL biogas product range.

“Our coach chassis has performed excellently in the fleet environment, attracting a number of return orders plus forward orders from both conquest and current coach fleets. Tenders continue to be well received. There’s acknowledgement from our partners within the fleet world that the total operating economy of a Scania product is a well-chosen investment for a sustained, profitable future.

“Looking at retail, Touring has been a real success story. We were celebrating selling 20 in the first year, but in the second year it was 40. Yes, that was aided by the introduction of the ‘4×2’ 49-seat exec which complemented the ‘6×2’, but it was still a strong performance. Omega placed the biggest order for 10 which were delivered in Spring 2016. Touring is going from strength to strength and gaining support.

“In 2016 we said goodbye to the OmniExpress, but we chose to celebrate that by creating the OmniExpress Finesse. It was a very highly-specified coach. We ordered 25 without customers, but all were sold before they were built – true testament to the quality of the vehicle.

“We sold 20 Irizar i6s to City Circle UK, and on the back of that a further 16 were ordered for 2017. Our relationship with Irizar is gaining strength year-on-year. We delivered close to 130 coaches to retail customers and the order intake going forward looks very much like it will exceed last year’s numbers.

“The Interlink HD was launched in 2016, a complete made product from our Finnish factory. There was an unprecedented reaction to this vehicle and we have the real expectation of selling over 50 in its first year of launch. The orders keep coming in.

“We also saw the return of the Scania iSkool. An order for Ausden Clark was taken at Euro Bus Expo for delivery in 2017 of a K360IB 6×2*4 with a 13.7m body to seat 80 in a three-plus-two configuration. A further order has been taken from another customer for later this year.

“The handover app that we introduced for the Touring has proved very successful, so much so that we’re going to do the same for the Interlink and thereafter probably for the Irizar as well. This is on top of previous inclusive products such as R&M (Repair & Maintenance), FMS (Fleet Management Services) and driver training to name a few.

“We shouldn’t forget used sales. We sold 176 units helped by the launch of the Scania Used app which we introduced last year, but it was also testament to the quality of our stock. Customers now see us as one of their first choices when they require a used vehicle.

“I can confirm that we have signed a contract with Ayats in Spain for the supply of chassis for the Eclipse double-deck coach in the UK to be sold exclusively by Ayats’ UK agent. There is already an order placed for chassis.”

Aftersales support

“2016 was a very successful year, a record year in all areas for aftersales, our fifth in succession,” said Aftersales Director Mark Grant. “We sold over 2.1m hours through the Scania network, 5.62% up on 2015. Today we employ 1,257 technicians and 318 parts staff. Parts sales were up 7.85%.

“Another key statistic is our MOT first time pass rate which is 97%. That is for every vehicle and trailer tested, whether it’s Scania or non-Scania. We categorise a PRS as a fail.

“Yes Scanias do breakdown occasionally, usually when the driver locks themselves out or something like that. Scania assistance time to arrive was 59 minutes. We have seen that rise from about 55 minutes over the past three years mainly because of traffic congestion.

“We actually completed 8,197 man days of training, 5,186 being technical and 3,011 on everything from management to mental first aid. This represents an investment of over £1.5m by the Scania network as a whole.

“Last year 49 apprentices graduated and we recruited 50 technical and 12 parts apprentices so we now have 224. Since 2008 we have actually trained over 800 apprentices with a 97% achievement rate, one of the highest in the industry. This year we’re committed to recruiting between 80 and 85 apprentices to start in September.

“We now have 30 management trainees either completed or who are still training at Loughborough University. We’re hoping that they will provide us with the managers for the future.

“We’ve opened the new technical centre at Loughborough, a £100,000 investment to deliver the highest level of technology. We can dial into a vehicle as can the factory in Sweden using state of the art technology. With highly skilled engineers based at Loughborough we believe that we can give customers the best back up in the industry.”[/wlm_ismember]