There have been some Scania engine supply issues globally for the Swedish truck maker, Diesel News got to ask the big boss about it.
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 bigger picture and the truck industry as it develops over the next 10 years or more.
New Truck Generation
The release of the New Truck Generation three years ago, and its staged introduction to all global markets in a rolling program since then, has seen a process during which Scania has been running parallel programs, one for the previous generation and one for the new models. This has put a lot of strain on the truck maker’s supply chain.
The Scania modular system amounts to around 20,000 components, which are used to tailor-make trucks to suit customers. The introduction of the NTG models added 10,000 new components into the system. This means the components management system has to run with 30,000 components during the changeover period.
“At the same time we have had one specific supply chain problem on the supply of blocks for the V8s during last year and we’re still suffering from that,” says Henriksson. “We are now coming up in the second and third quarter to normal production levels again, but for a market like Australia where a big part of our sales is V8, of course it is felt down here as well. It has definitely affected our global operations.”
Scania in Australia
The issues which affected the Scania organisation in Australia, as well as elsewhere in the world, was a shortage of V8 engines. The production facilities in Sweden could not keep up with demand and, as a result, waiting time for trucks powered by V8 engines blew out.
“We had some challenges last year when it comes to supply because of the disturbances and the changeover we have but we can also see now that we have with the product range and with the services that we have, we have all the fundamentals,” explains Henriksson. “Together we’re now, I would say, a very competent and capable organisation locally. We have everything that is needed to move our ambitions up when it comes to market share.
“When it comes to the Australian market, I think there are still a few things we need to do. We need to continue to develop our product range to suit this very demanding market, but I do think we have the pieces of Lego in place. It’s just a matter of making sure that they fit together and that we tailor-make it to the customer’s need.
“We also see that there is a potential to also work with new technology, both when it comes to new powertrains running on biofuels, to test electrification, hybridisation. The time is right to try to push these new technologies into the market as well.”
Henriksson expressed some puzzlement over the delay by the Australian authorities in implementing Euro-6. The planned ADR 80/04 has been on and off the agenda for quite a few years now and it looks like something which was implemented in the US, Europe and Japan around 2015, is being put back by Canberra bureaucracy to some undefined point in the mid-2020s.
“Maybe I should use the word surprising and not anything else, to see that we are still on Euro-5 in Australia,” says Henriksson. “We see from our customers that many of them are already using Euro-6 and most of the vehicles that we supply are Euro-6 already. So why the legislature is not following this, it’s a little bit surprising.”
At the moment, 90 per cent of all Scania New Generation Trucks sold in Australia are fitted with Euro-6 engines, even though they aren’t mandated. Corporate customers and transport buyers are willing to work with the new technology because of the other benefits from buying a truck with of the latest technology in place.
“Euro-6 is the way, it’s using the latest technologies, it’s giving the best fuel efficiency, it’s giving the best total operating economy,” says Henriksson. “If you’re not using the latest technology level on emissions, you miss out on a lot of other goodies not coming through to the market. I think that’s what the customers are seeing and that’s why they are moving forward.
“We see that all over the world. Corporates now are starting to take the lead and there’s a lot of good initiatives from mayors, local politicians that want to sort of take a responsibility for their community.”
Henriksson is impressed by the ongoing growth in the Australian truck market. With the economy remaining strong, he sees a lot of opportunity in Australia. From his point of view the potential of utilising natural and agricultural resources.
“There’s a lot of things that I’m impressed with, coming to Australia,” says Henriksson. “It’s been two, three years since I was here last, there’s a lot of development. There is a lot of sophisticated customers both on trucks and on buses. When it comes to how to run logistics, we met a number of them in the past few days and it’s impressive to see the scale of professionalism, and I think one of things that comes through very clear is the focus on safety. I think it’s world-class. I haven’t seen it anywhere else in the world where it’s that focused.”