Scania annual report 2004

Scania is stronger
than ever
Scania evolves as the needs of customers change. Since we delivered our first truck
early in the 20th century, we have systematically worked our way forward in the value
chain in order to move closer to customers and be a competent, reliable partner in
growing their businesses.
Scania is both a vehicle manufacturer and
an advanced supplier of services. The
vehicle is the basis of a product offering
that also includes maintenance, repairs,
customer financing and insurance, driver
training and roadside assistance.
To customers, this means operational
security. To Scania, it means an involvement
in a growing fleet of vehicles and a stable
source of revenue. On average, Scania is
growing by 5–6 percent annually. The new
truck range that was launched during
2004 will play a vital role in our growth.
Scania’s core values – putting the
customer first, respect for the individual
and quality – govern our day-to-day
work. How we treat our customers is
very important. This, in turn, implies that
leadership is crucial. It is the people behind
the products who will determine
Scania’s future competitiveness.
Looking back at 2004, it is clear that
the demand for heavy vehicles rebounded
after a few weak years.
The markets in western Europe were
significantly stronger than during the preceding
few years. Western European demand
for trucks is driven by strong replacement
needs, combined with large exports of
used vehicles to central and eastern Europe.
As the western European manufacturing
sector moves more and more of its production
eastward, the need for transport
also increases. Infrastructure is rapidly
expanding in many parts of these regions.
For many years to come, the EU membership
of the Baltic states, Poland, the Czech
Republic, Slovakia and Hungary will be an
essential driving force in the modernisation
of the former Comecon block. Another
example is the road network that is now being
built from the Baltic Sea to Vladivostok.
As a consequence of these developments,
Scania’s operations in central and
eastern Europe also showed good growth,
with higher order bookings and deliveries.
Over the past decade, we have built up
a sizeable sales and service organisation
in the region. Today Scania has a good
position, and in a number of countries we
are the market leader.
The increasing flow of used vehicles from
western European markets to central and
eastern European ones means that Europe
is becoming an ever more integrated market,
and this is reinforced by the enlarged EU.
Economic growth, especially in Europe,
is of great importance to Scania, since
transport needs – which create a demand
for trucks and transport services – are
directly connected to GDP growth.
The economies in South America have
stabilised politically and economically after
the difficult years at the beginning of the
21st century. Growth is now robust. In
Brazil and Argentina, Scania’s order bookings
rose at about the pace of the total
market.
Exports of both whole vehicles and
components to countries outside South
America continued to increase. In October,
a new 9-litre engine was launched in South
America. With this, Scania has a complete
global engine family based on the same
platform, from the 9-litre engine upward.
Scania also had a good year in most
markets outside Europe and South America.
A number of markets in the Middle East
and Africa showed good volume growth.
South East Asia as a whole performed
well during 2004.
We are now building up our own sales
and service organisation in China. The demand
for advanced heavy trucks, Scania’s
STATEMENT OF THE PRESIDENT AND CEO • SCANIA ANNUAL REPORT 2004 8