Scania is showing improved results year-on-year for the January-September period
October 24, 2011
Despite ongoing economic uncertainty in the Eurozone, including repeated financial bailouts of the Greek government, Scania is showing improved results year-on-year for the January-September period.
Scania President and CEO Leif Ostling says despite a stronger Swedish Krona, increased sales and service volumes pushed year-to-date earnings to $A1.42 billion compared to $A1.32 billion.
In terms of vehicle sales, Scania received orders for 60,997 trucks and buses globally in 2011, compared to 52,452 for the January-September period of 2010 – 16 percent increase year-on-year.
Ostling says orders were particularly strong in Latin America, northern Europe, the Middle East and Russia. However, the Middle East market did soften in recent months, along with southern Europe.
“Customers have become hesitant about placing orders, mainly due to expectations of lower economic activity,” Ostling says.
“Since Scania works with short delivery times, the daily production rate will be reduced by between 10 and 15 percent on a global basis starting in November.”
Ostling says by moving quickly to reduce production, primarily through not renewing approximately 900 fixed term temporary contracts, there is less chance of a vehicle stockpile being created.
Despite this sudden drop in demand, Ostling remains confident of strong sales in the coming year, as fleets look to replace aging stock.
“There is a need to replace vehicles in the European market since the relatively low level of truck deliveries during 2009 and 2010 means that the average age of the vehicle population is relatively high,” he says.
While there is a degree of uncertainty in the Brazilian market due to the impending introduction of Euro 5 emission rules, Ostling says there is still a high level of demand for service in all market regions.
“Scania is continuing its efforts to extend and improve the efficiency of the service network,” he says.