Looking at the Bigger Picture

looking at the bigger picture

As President and CEO of a global organisation like Scania Truck, Henrik Henriksson, is always looking at the bigger picture. He shares his views about the future of truck manufacturing with Diesel News.

The opportunity to talk to someone like Henrik Henriksson face to face doesn’t come around often. As the President and CEO of Scania Trucks he is in a position to see the truck industry as it develops over the next 10 years or more. His mission is to keep the organisation moving forward, providing leadership in technology and services provision.

The Scania organisation is relatively large as a single brand of truck, selling well over 300,000 trucks per year. In 2017, Scania had a 16.2 per cent market share, with over 50,000 trucks registered, on the roads of Europe. Research and development is a vital part of building trucks and the company spends $1.14 billion per year on new technology.

Of course, Scania is no longer a standalone company. It was acquired by Volkswagen and is now a key part of what was formerly called Volkswagen Commercial Vehicles but is now known as Traton. This entity includes Scania and MAN, plus Volkswagen’s own truck manufacturing arm, based out of South America.

Henriksson sits on the Traton board, which is chaired by former Daimler Trucks boss, Andreas Renschler. The board is tasked with finding the fine balance between maintaining a brand identity among the individual products and leveraging the scale of the global operation to find cost savings for their manufacture. 

 

looking at the bigger picture

 

After planning to launch an initial public offering (IPO), Volkswagen has pulled back from the idea to wait until there are more favourable market conditions for the launch. The plan was, and probably will be in the future, to make 25 per cent of Traton available to the stock market in a deal expected to raise 5-6 billion euros ($9 billion).

“Regardless of what happens with the capital structure of Traton Group, what has happened within Traton, the former Volkswagen Truck and Bus, is that we have, during the last three years found a modus operadus, a way of operating together, and we have found how we should cooperate,” says Henriksson. “Where we are cooperating is mainly in purchasing. We are cooperating when it comes to certain basic platform technology development for the future like powertrains and electrification, autonomous vehicle systems where we also have the benefit of belonging to a Volkswagen Group where we can get access to companies like Porsche and Audi and their technology also.”

 

looking at the bigger picture

 

 

This is a trend we are seeing among all the global conglomerates building trucks. The basic building blocks of the truck, be it the braking system, engine block or windscreen wiper control, are all used across the group. The diversification occurs in the final stages of development when it comes to adapting the component into a new truck.

This kind of co-operative work across brands is also needed in the development of new technologies, especially around automatic and autonomous trucking. The development costs are so high in these areas that overall costs need to be amortised over as many trucks as possible to make the development worthwhile.

“We have found a way of how to cooperate and the basic principle is that in some of these platforms like electrification – for example for battery cells – we can find synergies,” says Henriksson. “When it comes to conventional powertrains like engines and gear boxes we have found ways of how we should develop together to a certain level, maybe 60 per cent or something like that, and then we allow a proper base for differentiation of the brands. 

“As for Scania, I really see we have a benefit, we just launched a new truck range. We spent more than €2 billion ($3.2 billion) on investing in the new truck range. If we were on our own today, we would probably wait a few years before we kicked off with another big one. But now, since we’re part of a bigger group, we have already kicked off the next generation of powertrains.”

 

looking at the bigger picture