Often described as the Venice of the north, Stockholm with its waterfront stucco buildings and adorning balconies is every bit the renaissance city it has been compared to. Travelling 30km outside the city to a vast, rocky bowl dotted with industrial housing and factory plants, you would be forgiven if you thought Scania’s global headquarters in Södertälje was in an entirely new country. However, this is a company that is enjoying its very own renaissance.
Its New Truck Generation was immediately hailed as the International Truck of the Year when it received its premiere at IAA 2016 and has continued to be lauded with awards ever since, including the coveted Green Truck award in 2017.
The year also witnessed the launch of its ruggedised XT construction range and the company celebrated the upcoming 50th anniversary of its V8 engine with a new Euro 6 version created at its engine development housed minutes from the main offices in Södertälje. Indeed, when it comes to engines, Scania is also one of the best in the world.
It has continued to add to its line-up and with the launch of a plug-in hybrid truck at IAA no other manufacturer can match its range of alternative fuel engines; whether you’re looking for biogas, bioethanol, LNG… well, you get the picture.
The company has also switched gears on its production, successfully implementing a series of internal changes to ensure that it was ready for the New Truck Generation. Quickly into T&FME’s visit of the chassis plant it was obvious that this is a company which is moving away from the traditional approach to the commercial vehicles industry.
Our guide tells us that Scania has been using the Japanese philosophies of just in time and lean production for a number of years, but it is also one of the nimblest and progressive lines the magazine has seen. Senior management are encouraged to hold meetings within shared areas between the moving line of axle and cab assemblies. Crews move between stations when required to help others that may be falling behind the ticking clock which tells them how long they have to work on the chassis. It’s also an incredibly diverse line with dozens of languages spoken and women making up a considerable number of the workforce.
“We feel that the women here calm the macho-ness of the factory. They make a huge positive impact,” we are told.
When Volkswagen’s CEO Andreas Renschler said the company was prepared to float its truck and bus operation as TRATON he said the company wanted to create an agile force in commercial vehicles that had the spirit of a start-up. While those words were strung together to tempt investors, it is clear that this spirit is being encouraged where it arguably matters most; at the heart of Scania’s engine, axle and gearbox production.
Minutes away from the hustle of the factories is the Marcus Wallenberg Hall which houses a museum dedicated to Scania and serves as a reminder to all visitors of how the company has reached this point of its history. Through it you can journey from the company’s origins and vehicles from the 1891 through 1911 when Scania-Vabis was formed (from the merger of car and rail carriage manufacturer Vabis with Malmo’s fellow car- and bicycle- maker Scania) up until today’s New Truck Generation.
“In the early 1920s they understood that trucks and buses were the future for the company,” Örjan Åslund, manager, product affairs, trucks, tells T&FME inside the hall. It was a decision that proved to be remarkably prescient. “This company has been profitable ever since 1934,” he adds.
Also remarkable is that Scania is enjoying one of its best terms yet. Pushing harder than ever to get close to its markets, it is excelling despite the stuttering global economy.
“When it comes to the turnover of deliveries last year (2017), it was at an all-time high (at 90,777 including 82,472 trucks). We keep earning money,” says Åslund. “We are also growing in Asia, North Africa and Latin America.”
While the company has scored further success in the Middle East, when it comes to Europe, Mercedes remains the market leader. Aslund flattens his hands and switches each up and down to signify how Scania tussles with fellow Swedish giant Volvo for the other spots in the top tier of brands in the market.
“Volvo and Scania are going like this all the time,” he remarks as his hands move. “Mercedes and Volvo are our main competitors.” Pausing to grin, he adds, “But Germany was our biggest in 2017 (at 7,214 deliveries). ”
Everything within the truck business of Scania is currently spinning around the continuing roll-out – the largest in its history – of the New Truck Generation which began with the launch two years ago. Åslund says that the company is focused on finding ways such as tailored products and services to change the sales conversation about its newest trucks from purely being about how much they cost a fleet to how the vehicles can make an impact on revenue and profit.
“People have been selling trucks for more than 100 years by saying that they are fuel efficient; they can carry more goods; and they don’t break down. That is the traditional way,” he remarks. “We can increase on those but we can also increase on the revenue side by tailoring our solutions. Scania is changing in the market. We can see a lot of consolidation in the market with more professional buyers and they are attracted by this message. “
He continues: “We know if we help our customers to earn money, we will earn money in the end. With the introduction of a new generation we have re-defined premium. We said to offer profitability is the new premium. Scania has always focussed on customer profitability, now we have better means of doing it and achieving it by helping them with tailored solutions.”
One of the great contributions Scania has made to the heavy truck industry was the introduction of modular production by its then-technical director Sverker Sjöström who obsessed on finding a way of using a limited amount of main components to make a limitless number of truck variants. A project that started in the 1960s, the challenge was so great it took until 1980 for Scania to release its first modularised range (the GPRT). Sjöström’s legacy lives on in the production and the number of ways the latest trucks can be configured.
“It’s not just the engines but also the cabs and everything: frames, axles, gearboxes, engines. It’s an ingenious system that makes us capable of delivering tailor-made solutions for all kinds of customers in a smart way,” explains Åslund.
With a large number of options available to customers, he says that Scania breaks down its trucks into 38 different application categories to provide fleet customers a base to build their final truck upon.
“A tipper in Germany compared to a tipper in England or Taiwan will certainly look quite different as they are working under different regulations, but they always have something in common. That is why we can divide our offering into these applications. From there we can do fine-tuning due to local regulations and local demands, and what the customer needs when it comes to operations, and the environment there,” he says.
Modern trucks are more than just steel and rubber, and, like others, Scania is working in the realms of data and digitalisation. However, it has been able to benefit from timing the change to a new generation with the industry’s evolution towards emobility and connectivity services based on getting more information than ever before on how a truck is performing. Again, he says, this is helping to design trucks that meet the specific needs of customers. Even after they’ve purchased the truck.
“We can get a lot of data from our trucks today. Of course, we use it in our development processes; we know a lot about how our trucks are used and what the customers demand. But today we have better tools than ever before. Connectivity has made great contributions because it’s so important if you can nail down every aspect of the truck, we’ll certainly give you more money back in the end to the customer.
“Think about every small detail and all the mileage these trucks are doing. If you can carry some more goods, if you can say just an extra percent fuel, it all adds up to great money in the end over five years in. So, any the data that you’re gathering from the connected vehicles can be used to sharpen or better define what is needed.”
A further, crucial, advantage is being able to accurately tell when a truck should come in for maintenance and servicing – or even when it shouldn’t.
“Our latest success has been in selling services with our flexible maintenance programme. Traditionally, we have maintained trucks based on mileage per year. That is basically gone. We can now see exactly the right amount of usage and provide exactly the right amount of service and maintenance for our trucks,” Åslund explains. “We can see if a truck has done very light work, low mileage, light work…which means the oil lasts longer. So, in the end what’s the upside for the customer? It’s fewer days in the workshop. More uptime. We can even prevent breakdowns.”
Ironically, he suggests that, rather than taking away the need for human interaction, Scania wants to use the data it is retrieving from trucks from across the globe as a way of delivering a personal touch to fleets wherever they are.
“Because we have all this data, we can have a dialogue with the customer that is closer than ever before. (What we’re telling them) is not gut feeling, it’s based on actual data,” he stops to give an example. “‘Hey Bill, I have checked this out. I think the way you drive and the operation you have, I think the next truck you buy we should change your gearing…That’ll save you X percent on diesel’. Numbers are magical. They are very convincing as they are the actual reality.”
Championing sustainability
Scania was the recipient of the first ever Greener Supply Chain Award at the Automotive Logistics Awards in 2018 for its green transport operations in Europe, based on how the company has put sustainability at its focus, rating CO2 emission equally with costs and quality.
Its work sustainability drive is now limited to Europe, however. Scania has been actively championing sustainability in the region’s transport sector for more than four decades of operations in the Gulf. Driving a green message centred on proven fuel economy and vehicles, which are fully customised and adapted to the requirements and operating conditions of the Middle East.
Åslund emphasises that the focus on sustainability runs throughout the company and is being driven from the very top.
“Scania is very much about sustainability today. we’re turning to use alternative fuels and electrification to create smarter, safe transport. Our CEO is very dedicated when it comes to promoting sustainability,” explains Åslund. “He’s actually at the forefront of our industry when it comes to promoting sustainable solutions. He has a simple message: companies that aren’t sustainable they won’t sustain.”
Towards Electrification
Visitors to IAA last year were able to see Scania’s present vision of alternative fuel engines and trucks. With the company prepared to wait for battery technology to catch-up with the demands of heavy trucks before it feels ready to launch a fully electric vehicle in the class, Åslund points out it currently has the broadest offer when it comes to “alternative engines for alternative fuels.”
“Our trucks can run on liquefied natural gas or biogas but where that’s not available we have HVO (Hydrated Vegetable Oil). This is an excellent fuel. We need all these choices today because in some parts of the world fuels like natural gas are not available,” he remarks. “Take bioethanol for example. It’s quite easy and cheap to produce, you can replace diesel with this but availability is always the issue. You need all these variants, it’s quite expensive for us but we think it’s necessary.”
At the centre of its presence at IAA was its PHEV plug-in hybrid truck.Based on the New Truck Generation, it combines a five-cylinder motor with a 130kW e-motor and a 7.4kWh battery. It takes 20 minutes to recharge the battery.
T&FME was fortunate to use the non plug-in HEV in Sweden and was impressed by its ability to recharge when the brakes were applied and the ability to ‘ghost’ in full electric mode. Despite its limited 10km-range, you can imagine being able to silently manoeuvre in and out of a DC or city centre at night using the electric mode.
“And if you run the internal combustion engine on HVO and use the full capacity from the hybrid you can have a great deal of fuel savings as well as saving tailpipe emissions,” Åslund tells T&FME.
When asked why Scania is focussing on the HEVs when others are prepared to sell the idea of a fully electric heavy truck, Aslund is blunt.
“You could put out a PR truck but you have all kinds of problems when you when you put in their huge batteries which are heavy and expensive. In reality you have to pay the price upfront because you can’t count any residual value as stands today,” he replies.
“Our stance for the moment is simple: for the here and now, a hybrid is the best solution we have for the customers that are actually paying for a truck to operate on a daily basis. We believe that eventually most trucks will be electrified but we’re not there yet.”
