Scania annual report 2004

Bus project gives Colombia’s
capital a breath of fresh air
With its fast, safe, comfortable new
buses, TransMilenio has changed the
lives of hundreds of thousands of public
transport passengers in Bogotá, capital
of Colombia. The transport system has
also set the standard for other major
cities in South America.
Bogotá, a city of seven million people,
was long known for its chaotic traffic
situation, air pollution and slow, bewildering
public transport.
Using a traffic planning model designed
for the city of Curitiba, Brazil, five
years ago the TransMilenio system was
developed. In several dozen kilometres
of dedicated bus lanes, thousands of
modern buses now transport nearly a
million passengers every day. Scania
is delivering 130 of these new buses.
To contribute further to cleaner air
and safer, faster public transport in
Bogotá, the companies that have won
contracts must scrap some of their
old buses. A total of more than 4,000
old buses are being replaced by new
ones.
During the spring, Scania concentrated
the bodybuilding operations for its own
city buses at the plants in Poland and
Russia. This was a step towards achieving
profitability and safeguarding the longterm
competitiveness of the subsidiary
Scania Omni. The cost of building a bus
body, which is a labour-intensive task, is
significantly lower in these countries than
in Sweden.
During the second half of 2005, Scania
Omni will move the rest of its operations,
mainly the development of bus bodies and
prototype assembly, from Katrineholm,
Sweden to Södertälje. This move will
enable Scania Omni to benefit from proximity
to bus chassis development activities.
Stable market for industrial and
marine engines
Scania’s deliveries of industrial and marine
engines totalled 5,014 (3,165) units. The
increase mainly consisted of engines for
electricity supply, with the largest customers
located in Spain and Great Britain.
The industrial and marine engine market
is relatively stable but is affected by tightened
emission rules, among other things.
Service
Service sales continued to develop favourably
during the year. Scania’s increasing
focus on the service market is related to
how the transport industry is changing,
which is especially apparent in Europe
where previously simple transport services
today are part of sophisticated logistics
structures.
This, in turn, has led to completely new
customer demands. There are several
reasons: Capital costs and the costs of
not being able to deliver on time can often
be higher than a company’s direct costs
for the actual transport task, such as fuel
and wages.
New and stricter exhaust standards are
other challenges that Scania customers
face. This, in turn, increases the demands
for modern products and first-class workshop
support.
OTHER MARKETS
Scania’s order bookings in markets outside
Europe broke all earlier records.
Behind the upturn was strong economic
growth in a number of regions.
Most markets in Africa, the Middle East
and South East Asia showed good growth.
The economies of South East Asia
grew rapidly during the year, largely because
of a surge in domestic demand, both
because of household consumption and
company capital spending. Meanwhile
trade and transport between the countries
of the region rose.
In South Korea, however, growth
cooled after several years of rapid
expansion.
In Taiwan, deliveries rose sharply, and
today Scania is the leading European
make on the island both when it comes
to trucks and buses. Scania took over its
TRENDS AND INDUSTRY DEVELOPMENTS • SCANIA ANNUAL REPORT 2004 24