Scania is undertaking a big step within its future strategy by building a wholly-owned truck production facility in Rugao, China, with production set to start early 2022.
Scania Comes to China
In Jiangsu Province, 150 km northwest of Shanghai, Scania are ready to launch, with Henrik Henriksson, President of Scania saying of this development: “Our expansion in China will be made step by step and in pace with the positive development of market conditions and the increasing demand for modern vehicles with a higher technology content that will follow. Until the end of the 2020s, we will make significant investments in order to benefit from this development as well as to establish China as the third leg in our global production structure.”
The rapid transformation into a more open and market economy-based system, which is currently taking place in China, has prompted Scania’s decision to invest in the country. In order to increase competition, China is now opening up for foreign-owned companies to carry out operations in the country, which will help to contribute to the major sustainability initiatives that are being implemented as well.
“Increasing the presence in the Chinese market is crucial for Scania and the TRATON Group’s global growth. Our operations in the country will gradually be expanded and developed into a full-scale unit in Scania’s global production and supplier structure. The goal is not only to make China our third industrial leg but also to a regional centre for sales to other Asian markets,” says Henriksson.
An Investment that Includes the Establishment of Research and Development in China
“This will strengthen the international competitiveness and ability of Scania to be leader in sustainable transport, as our presence provides increased access to leading technologies and expertise in areas such as electrified and autonomous vehicles,” argues Henriksson. As China accounts for 40 percent of global sales, as well as being the single largest commercial vehicles market, the market naturally is predominantly national manufacturers. However, with the demand for modern vehicles with a higher technology content, better performance and higher availability increasing, there is also a demand for more efficient logistics and sustainable transport. Scania’s entire product range of combustion engine technology for renewable biofuels as well as electrified products therefore represent the supply China needs for a more sustainable future.
“We are aiming for sales in China at the end of the 2020s of at least the same volume as that of our currently single largest market, Brazil,” Henriksson explains.
Scania’s establishment of its own industrial operations in China has been made possible through the acquisition of Nantong Gaokai Auto Manufacturing Ltd. This company meets Scania’s requirements with regard to, among other things, the work environment, environmental performance and systems for quality monitoring at all stages of the supply chain, as well as the need for good customer service.