Scania Has Potential for 120,000 Trucks by 2020

  Scania Has Potential for 120,000 Trucks by 2020

Business Wire

SÖDERTÄLJE, Sweden -- September 19, 2013

Regulatory News:

Scania (STO:SCVA) (STO:SCVB):

“Last year Scania delivered some 61,000 trucks. Our potential on a global
basis will 2020 amount to 120,000 trucks per year. Our service sales will also
grow and our ambition is for service-related products to represent 25-30
percent of our total sales,” said Scania’s President and CEO Martin Lundstedt
today, Thursday, 19 September 2013, at the company’s Capital Markets Day in
Södertälje, Sweden.

The potential for buses is 15,000 units and for industrial and marine engines
20,000 units by 2020. Scania’s growth is based on economic activity. Although
the next few years may be tough in the European market, Scania expects that
European economies will recover in the long term. A significant part of the
volume increase by 2020 will come from markets in Asia, Eurasia and Africa.

“We have built a strong position in Europe for the coming years with our broad
Euro 6 engine range as well as Scania Streamline and Ecolution by Scania −
that is products and services that help lower fuel consumption for our
customers and thereby reduce environmental impact. Meanwhile, the trend
towards increasing demands for transport efficiency in emerging markets is
favourable to us and we are now focusing on expanding our presence further in
key segments,” explained Lundstedt.

Focusing on service business Scania is continuing to develop its service
business and strengthen its presence in emerging markets. The rate of
investment in the service network in recent years has been about SEK 1 billion
annually. Demands from customers for lower fuel consumption and higher vehicle
uptime represent great opportunities to boost Scania´s market share on the
service side and to broaden its service portfolio.

“Over the past 20 years, we have developed new concepts in the service
business, and today, we have a leading position. Now we will increase this
volume while increasing our presence in new segments with a large service
content. Our ambition is to increase the share of services from 20-25 percent
of Scania’s total revenue in recent years to 25-30 percent over an economic
cycle,” said Lundstedt.

At the production units, Scania will raise its capacity by investing in
advanced processes at existing production units. Scania has begun boosting its
technical capacity to 120,000 vehicles, which will represent a total
investment of SEK 1.5 billion over a three-year period.

Opportunities with the Volkswagen Group

To further strengthen the product portfolio in the long term and take
advantage of economies of scale and skill, Scania has identified opportunities
for cooperation with the Volkswagen Group. Scania, together with MAN, is
examining areas such as axles, gearboxes, commodities and hybrid drive
components. A number of the feasibility studies that have been completed have
shown interesting synergy opportunities for Scania and work continues with
these opportunities. Furthermore, exchange of knowledge and benchmarking are
occurring between the Volkswagen Group and Scania in IT, production and
logistics, including working methods and practices.

Since 2008, Scania has had a policy ensuring that any cooperation with related
parties is subject to corporate benefit for Scania and is handled according to
the arm’s length principle. Martin Lundstedt explained how this policy has
formed the basis of the decision making process and workflow, that the company
has implemented.

“At the 2014 Annual General Meeting, we will give a summary of the processes
implemented at Scania, to safeguard the interests of Scania and all its
shareholders in such cooperation projects. The focus will be on how
transactions between Scania and related parties are monitored and documented
in order to make them auditable”, Lundstedt said.

Scania has also assigned Scania‘s external auditors to pay special attention
to these processes, as well as the compliance with them. As earlier
communicated, at the 2014 Annual General Meeting, Scania’s auditors will thus
comment upon this.

Market situation Lundstedt also commented on the market situation in the truck
segment during the third quarter of 2013.

“There is a replacement need and an interest among customers to invest in Euro
5 trucks before year-end. In light of this, we did not see the normal seasonal
downturn in European order bookings during July and August. In Latin America,
we had somewhat lower activity compared to the high level of the previous
quarters.”

Scania is one of the world’s leading manufacturers of trucks and buses for
heavy transport applications, and of industrial and marine engines.
Service-related products account for a growing proportion of the company’s
operations, assuring Scania customers of cost-effective transport solutions
and maximum uptime Scania also offers financial services. Employing some
38,600 people, the company operates in about 100 countries. Research and
development activities are concentrated in Sweden, while production takes
place in Europe and South America, with facilities for global interchange of
both components and complete vehicles. In 2012, net sales totalled SEK 79.6
billion and net income amounted to SEK 6.6 billion. Scania press releases are
available on www.scania.com(http://www.scania.com/se)

For more information about the Capital Markets Day, visit
www.scania.com/cmd2013

This information was brought to you by Cision http://news.cision.com

Contact:

Scania
Per Hillström
Investor Relations Manager
tel. +46 8 553 502 26
or
Hans-Åke Danielsson
Press Manager
tel. +46 8 553 856 52