Scania is by establishing a wholly-owned truck production facility in China’s Jiangsu Province, 150 km northwest of Shanghai. Series production is scheduled to start in early 2022. This follows the company’s Scania’s acquisition of Nantong Gaokai Auto Manufacturing Ltd.
Henrik Henriksson, president and CEO, Scania, said: “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 – and thereby also contribute to the major sustainability initiatives that are being implemented.
“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,” said Henriksson.
China is the world’s single largest market for commercial vehicles and currently accounts for 40 percent of global sales. The market is dominated by national manufacturers, but the demand for modern vehicles with a higher technology content, better performance and higher availability is increasing with the need for more efficient logistics and sustainable transport. Scania estimates that its entire product range of combustion engine technology for renewable biofuels as well as electrified products will be a good fit for the Chinese market. Scania’s investments in China also include establishing research and development in the country. As a result of these investments, China will replace Brazil as Scania’s largest single market by the end of the decade.
“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. 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,” said Henriksson.
Matthias Gründler, CEO, Traton Group, which owns the Scania and MAN Truck & Bus brands, said: “The technological demands being placed on commercial vehicles are growing around the world and are increasingly converging in international markets. This trend is creating new opportunities for our brands and their products. The Traton Group intends to be a global champion in all key markets, and the construction of a Scania plant in China will move the entire group one step closer to reaching this goal.”
MAN Truck & Bus has maintained a strategic partnership with Sinotruk, one of the largest manufacturers of commercial vehicles in China, since 2009. MAN also holds a stake of 25 % plus one share in Sinotruk, an investment that enables MAN to participate in the Chinese market. In addition to the collaboration with Sinotruk in the volume segment, Traton serves the small, yet growing market of premium trucks through the export of MAN vehicles to China.