Scania has taken a key strategic step towards expanding its presence in China and the wider Asian market, by breaking ground for a new global production.
Scania To Open Truck Plant in China
The new factory, which is based on Scania’s unique modular production system, will produce vehicles for both the Chinese and Asian export markets when it opens for business in late 2024/early 2025, significantly shortening delivery times to Asian customers. It will be Scania’s fourth global production base, after Södertälje in Sweden, Zwolle in the Netherlands and São Bernardo do Campo in Brazil. The Rugao facility will provide a boost of presence in Asia and also the efforts to drive the shift towards sustainable transport because it becomes a zero-emission factory, using green electricity and renewable fuels.
Biogas made from local wastewater sludge, food waste and other biowaste will be one of the main power sources, meaning that the factory runs on circular energy. In addition to this, the vehicles from Rugao will also be compliant with the most stringent emissions and fuel consumption limitation standards. The site’s output will also come to reflect the growing sophistication of the Chinese market in terms of special purpose vehicles and sustainable solutions. With a localisation rate of more than 80 per cent and use of the latest technologies, the factory will be able to offer Scania vehicles that have been adapted to Chinese market conditions, so that customers can enjoy very competitive operational economy.
President of Scania China Group, Mats Harborn, explains the commitment in Rugao is even greater than first planned. Scania expanded the scope of the project during the pandemic, which is why the actual groundbreaking is taking place a little later than first envisaged. Instead of a single assembly line, Scania is able to acquire more land so the company can now build an entire factory. Scania will be starting production sometime during 2024/25. By that time Chinese heavy vehicle standards is expected to move a step further to being really conducive to the sorts of products Scania expect to sell to the market. Mats Harborn believes the significance of this development for Scania in China and globally cannot be overstated.