Themesheadline

2008-12-01

Scania has become the ninth brand in the Volkswagen Group

Always focusing on customer needs

The youngest company in the Volkswagen Group is also the oldest. Since Scania was founded in 1891 more than 1,300,000 trucks and buses have been built and delivered for heavy transport work in about 100 countries.

The common history of Scania and Volkswagen dates back to 1948, when Scania-Vabis introduced Volkswagen in Sweden, and then remained the official VW distributor until 2002, when Volkswagen took over the sales company in Sweden. Two years earlier, in 2000, Volkswagen took a leading ownership responsibility in Scania, purchasing 34 percent of the voting rights and 18.7 percent of the capital in the heavy commercial vehicle manufacturer.

Today, after Volkswagen’s acquisition of all the shares owned by Investor AB and the Wallenberg foundations, Scania has become the ninth brand in the Volkswagen Group.

Scania nevertheless remains an independent company listed on the Stockholm Stock Exchange, with nearly 130,000 other shareholders and more than 60 percent of the capital owned by this free float. This means that Scania is governed by the Swedish Company Law and stock market regulations and is obliged to follow a set of rules, which basically means that VW and Scania are allowed co-operate ‘at arm’s length’.

Business-to-business

Unlike the other brands in Volkswagen Group, Scania’s operations are purely business-to-business oriented. All trucks, buses, engines and services developed are sold as production equipment intended to provide customers with efficient transport solutions designed to deliver the highest possible earning potential for the customer. Scania accomplishes this by being thoroughly familiar with the customers’ business operations and by always keeping customer needs in focus along the entire value chain, from research and development via production and procurement, to sales, financing and delivery of services.

And unlike its competitors, Scania has systematically aimed its resources at the heavy transport segment, where vehicles are driven long distances and have a high degree of utilisation. Consequently, the quality of Scania’s service-related offering is extremely important to ensure that customers enjoy the greatest possible payback from their investment in each vehicle. If transport companies are to meet today’s demands for efficient transport, their vehicles have to be available all the time.

Over the last two decades, Scania has played a pioneering role in integrating its distribution and sales operations, and today 40 percent of all Scania employees work in Scania’s own sales and service companies, compared to 10 percent in the early 1990s.

A common production system

Over the years Scania has developed and co-ordinated its production system in order to achieve high efficiency and profitability. Keeping production and product development close to each other is a strategic success factor that enables the company to ensure both product and production quality in an efficient way. Working with the Scania Production System (SPS) is an important ingredient in Scania’s recipe for higher productivity.

SPS is a management model based on principles and methods that encourage employees to eliminate waste and identify deviations from a ‘normal situation’, do something about them, and thus continuously contribute to improving operations. Scania applies this common system at all production units around the world. At the same time, the production network is concentrated on Sweden, the Netherlands and France in Europe and Argentina and Brazil in South America. The network is globally integrated, including working methods, quality and environmental standards, which are the same at all Scania production units.

Growing efficiency

SPS has developed at Scania since the early 1990s, and this far-reaching change in working methods has now become genuinely innate in the organisation. As a result, the efficiency of Scania’s production organisation has improved markedly. Between 1990 and 2007 the number of production employees has remained more or less unchanged, somewhere between 11,000 and 12,000 people. Yet the organisation produces more than twice as many vehicles today as 15 years ago.