Scania annual report 2003

TRENDS AND INDUSTRY DEVELOPMENTS
Economic growth fuels demand for truck transport
World production of heavy trucks
rose by 10 percent to 590,000
(540,000). Scania was the world’s
fourth largest heavy truck make, with
a market share of 7.8 (7.7) percent.
Macroeconomic expansion and transport
needs go hand in hand. Economic growth
leads to higher consumption, which
increases the need for transport services.
In most markets today, only trucks can offer
the flexibility and delivery assurance
necessary to manage supply chains in the
complex logistics systems that form the
basis of our consumer societies.
Operating cost and reliability
In mature markets, large logistics companies
compete on the basis of expertise
and geographic reach. An overwhelming
share of their transport services are contracted
out, often to small haulage firms.
To this large customer category, operating
cost and reliability are decisive when
choosing vehicles.
A well-developed service and roadside
assistance network are also important factors
when every delivery must arrive on
time.
Because of the international structure
of Scania’s sales, long before many competitors
the company expanded and integrated
its international sales and service
network.
About 40 percent of the world market for
heavy trucks is found in Scania’s main
market, Europe. During the past three
decades, transport services in Europe
have grown by an average of 12 percent
each year. In the past decade, truck transport
services have accounted for all of this
increase. The European Union predicts
that road transport volume will rise by 50
percent between 1998 and 2010, but
would like to limit this increase somewhat
by stimulating rail and water transport.
A number of EU countries are also
planning to introduce kilometre-based
road charges for heavy vehicles. The need
for trucks will thus increase in Europe,
while stricter road safety and environment
performance standards are being imposed
on vehicles.
In emerging markets, demand for
heavy trucks is determined both by GDP
growth and infrastructure expansion.
During the next decade, the total world
market for heavy trucks is expected to
grow to between 800,000 and 850,000
vehicles.
Intensive bus and coach competition
World production of buses in Scania’s
segment – city and intercity buses and
tourist coaches – totalled 67,000 (63,000)
units. One-third of these buses were sold
in Europe. Latin America and Asia each
accounted for about 20 percent of the
world market.
Public transport is being deregulated
in a growing number of markets around
the world. This opens the way for private
operators. Competition is often very keen.
The lowest possible operating cost and
high bus availability often top the wish list
of operators. This poses heavy demands
on manufacturers’ service networks.
Industrial and marine engines
Scania’s deliveries of engines totalled
3,165 (3,191) units. The trend in industrial
and marine engines is towards increasingly
complex products, driven among other
things by new, tighter emission rules.
Agreement paves the way for
improved safety
During 2003, Scania signed an agreement with
ExxonMobil making it the primary supplier of
tanker trucks for the oil company’s markets in
Europe, the Middle East, South East Asia, the
Pacific region including Australia and New
Zealand and Africa. Scania’s vehicles meet
ExxonMobil’s high safety standards and will be
used by transport companies that provide services
to ExxonMobil in the above-mentioned
regions.
“This is an exceptionally prestigious contract.
The fact that ExxonMobil has chosen
Scania as a global partner demonstrates that
Scania’s tanker truck concept meets the
strictest safety standards worldwide,”
comments Group Vice President Gunnar
Rustad, Head of Sales and Services.
Scania has earlier experience of working
with ExxonMobil in various key markets in
Europe. In Africa, the two companies also
successfully implemented a project to provide
tanker vehicles that meet European safety
standards for transporting hazardous goods.
This project was implemented in some of
Africa’s most demanding and challenging environments
in terms of terrain and road quality.
The new agreement will enable Scania to
further collaborate with ExxonMobil to continually
improve tanker transport safety standards
around the world.
ANNUAL REPORT 2003 34