Lower delivery volumes hit Scania Group’s global sales revenue in the third quarter of this year, despite increased deliveries in Europe, where Scania has retained a stable 17.9% market share, the manufacturer reported this week.
In its performance summary for Q3 Scania Group revealed that, while incoming orders increased by 20% to 20,492 vehicles, global sales revenue declined by 3% to £3.79bn (SEK 46.9bn).
This decline was partly offset by Scania’s European market share increasing marginally from 17.8% to 17.9% in the first nine months of the year, despite what it described as “challenging conditions” in a contracting heavy truck market.
The group’s adjusted operating result decreased by 26% to £0.42bn (SEK 5.2bn), with an adjusted return on sales of 11.1% down from 14.7%.
Scania said the adjusted operating result had been hit by “currency headwinds, market mix and cost related to the build-up of the industrial hub in China,” referring to its £1.76bn investment in its industrial facility in Rugao in China which was launched in August this year.
Vehicle deliveries decreased by 1% to 21,545 vehicles. Of this total Zero Emission Vehicles (ZEV) amounted to 159 units - almost double the 80 ZEVs delivered in the previous quater.
The OEM said the decline in truck deliveries had been largely in Brasil, due to high interest rates, inflation and tariffs, adding that the impact of this had been ameliorated by increased deliveries in Europe and Asia.
Announcing the results, Scania Group said it had “delivered a resilient performance in the third quarter, with strong orders amid profitability pressure, impacted by lower volumes and strategic investments,” adding that its focus on China and on efficiency measures are “strengthening long-term competitiveness.”
Christian Levin, Scania and Traton Group president and chief executive, commented: “The business environment remains unstable, but Scania continues to demonstrate resilience.
“Our increasing orders show we are maintaining customer confidence while preparing the company for long-term growth.”
Scania is currently undergoing a major restructuring which has seen 750 staff in Sweden made redundant. Commenting on the redundancies, Levin said the restructuring had been driven by new technologies, regionalisation and shifting market conditions.
He added: “This was an extremely difficult decision, especially as we have been able to avoid such steps in the past. This time, however, it was necessary to strengthen our efficiency and ensure we keep delivering the best possible value for customers.”
Levin highlighted key developments during the quarter including the roll out of its Super 11 engine, which he said has been well received by customers since its launch in May.
He also pointed to the launch of Scania’s Europe-wide electric truck roadshow in August, which will run through December and cover 13 European cities.
“At a time when many customers remain uncertain about the viability of electric heavy transport, I believe that one of the best ways to make the case for electrification is to let people experience it for themselves. By bringing our trucks directly to customers, media and other stakeholders, I’m hopeful the roadshow will help overcome doubts and convince everyone of the readiness of our solutions,” Levin said.
He added: “But it is also about pushing for the enabling conditions essential for zero-emission transport, that our industry so urgently needs – from charging infrastructure to a competitive total economy for hauliers and transport buyer demand.”
Looking ahead, Levin pointed to Scania’s new industrial facility in Rugao in China, which spans 800,000 square metres and has a production capacity of 50,000 vehicles a year. The hub, which is expected to create around 3,000 jobs, will initially focus on the Chinese market and some export markets across Asia.
Levin said: “Rugao is much more than a factory – it’s a strategic innovation hub, based in an ecosystem that sets global benchmarks in digitalisation, smart manufacturing, electrification, and supply chain efficiency.
“We also have a dedicated R&D centre serving all TRATON Group brands, ensuring that the latest Chinese-originated innovations can be rapidly integrated into the TRATON modular system.”
