Scania Commercial Vehicles India (SCVI), the wholly-owned subsidiary of global heavyweight Scania, formally inaugurated its
truck assembly facility at Narasapura near Bangalore. The facility is Scania’s first-ever industrial establishment in the whole of Asia, reflecting the company’s long-term commitment to the Indian market.
Established at an initial investment of Rs. 250 crores, the facility was inaugurated by the Karnataka Chief Minister, Mr. S. Siddaramaiah, in the presence of several other ministers and Mr. Martin Lundstedt, President and CEO, Scania Global. The Scania workforce was joined by its supplier partners and customers in the country, among others, for the landmark occasion.
The plant will house two manufacturing units – one for truck assembly with an annual capacity of 2,500 heavy haulage trucks, and the another for buses with a capacity of 1,000 units annually. Scania had started truck production at the new facility in June this year with production trials 
going on for mining and off-road trucks. The production of on-road trucks will start in the near future while the bus roll-out is planned by May 2014. The facility will also serve as Scania’s head office and centre for all commercial operations across the country, along with a service workshop and a central parts warehouse for service support.
Scania trucks are currently at a localization level of 18 per cent, with the tyres, some cabin interior components and the load bodies accounting for the local content. The inter-city Metrolink coaches are currently being built on the premises of Scania’s bus body-building partner in Malaysia and will be 100 per cent indigenized once the local facility is up and running by the middle of next year.
“It gives me great pride to see one of the largest global companies setting up plants in 
Karnataka,” said Mr. Siddaramaiah. “It will not only provide an impetus to industrial growth in the region but also present significant employment opportunities to local residents. With its superior technological processes, large-scale manufacturing setup and eco-friendly focus, the plant is a testimony to our emphasis on inspiring corporate India to reach greater heights.”
Mr. Lundstedt said: “This is a very big day for us at Scania as we establish our largest industrial footprint in Asia so far. We have been in India since 2007, having entered the market through our partner L&T, and in the process of working with our partners and customers, we have learnt how we could be an integral part of the market, both in serving it and using the fantastic opportunities and skills that exist in India. We are a long-term company, and when we make an establishment, we believe that we could be an integrated part of the society over a long time.”
Mr.Anders Grundströmer, Managing Director, SCVI, and Senior Vice President, Scania Group, said: “Today’s ceremony is extremely significant to us. It illustrates our willingness to meet commitments and our ambition to provide sustainable transport solutions. I am sure this production line, along with our total operating economy concept, will create great quality vehicles and will be a strong witness to the ‘Made in India’ label globally.”
Expanding product portfolio
Scania has been represented in the Indian market since 2007 through its partnership with L&T for marketing its high-end tippers for the construction and mining segment. Having started off with the P380 6×4 tipper, Scania followed it up with the P380 and P410 8×4 tippers, launched in December 2011 and 2012 respectively. The end of 2012 also saw it foray into the on-road segment with four high-powered haulage trucks for the domestic market – R500 6×4, G460 6×4, P 410 6×2 and P360 4×2.
Earlier this year, at Busworld India, Scania made an entry into the inter-city bus segment with its range of Metrolink coaches for luxury and charter travel. What’s left for the Swedish giant is a product in the city bus segment which is likely to be plying on Indian roads by early next year. In addition to trucks and buses, the company also has presence in the engine segment with highly-reliable products for industrial, marine and power generation needs.
Globally, Scania has plans of selling 120,000 trucks, 15,000 buses and 20,000 engines up to 2020. Its confidence of achieving the mark is driven by its USPs and it also expects the Indian market to make a healthy contribution to achievement of this target. “The reason we think we can achieve the target is quite simple. We are a company that can provide solutions with the best fuel efficiency and total operating economy. We also have a broad scope of fuel options to offer our customers. The share of the Indian market towards our global vision will be considerably high, but it will depend on the developments related to the logistics and transportation sector in the country”, Mr. Lundstedt said.
Sales strategy
As part of its plans for sales and service support across the country, Scania aims to have dealer partners in 50 main Indian cities with additional service support at other strategic locations. “We are in six mining sites together with L&T, present in six coach depots and are also setting up our container workshop at Krishnapatnam port. In addition, we have appointed dealers in Mumbai, Kochi, Hyderabad, Bangalore and Chennai. Our focus is presently on the South and West regions. We are soon shifting focus to the North and East. We will set up dealerships in the 50 biggest cities of India and support them with the container workshops in between”, said Mr. Grundströmer.
Through its unique sales strategy which includes concepts of leasing and focus on total operating economy (TOE), Scania has bagged some huge orders across the segments it operates in. It has close to 20 per cent market share in the mining segment, and targets raising it to 35 per cent next year. The trucks have delivered in performance viz-a-viz competition, offering better fuel efficiency in the range of seven to 17 per cent over the closest competitor product, which obviously translates into enormous savings for the customers.
Talking about the sales performance, Mr. Sivakumar. V, Director – Sales, SCVI, said: “We have a healthy order book for both trucks and buses. Recently, we have bagged a very large order, a first-of-its-kind in the country, from a public sector coal mining company. On the bus side, we have started with the private customers in the South and West and our next step is the State Transport Undertakings (STUs). We have had very good discussions with some STUs and will soon have some orders as well.”
Scania has made significant inroads into the inter-city coach segment as well, one which 
has been dominated by its closest rival for nearly a decade, with orders from reputed names in the industry, including KPN Travels, SRS Travels and Neeta Travels, to go along with the order for 120 coaches from Siddhi Vinayak Logistic Ltd. (SVLL). The company will start delivering eight buses per month from Malaysia, from December up to April next year, following which the buses will roll out of the new Narasapura facility.
The way forward
In the city bus segment, Scania has some revolutionary plans up its sleeve. While alternative fuels have been talked about for long in the Indian market, Scania plans to start test runs of its ethanol-run city bus in early 2014. “In order to have sustainable public transport systems, there are plenty of opportunities to be explored with renewable fuels. We plan to run our city bus using ethanol and we know that India has a long tradition when it comes to ethanol. It can even be produced from waste, so we are not competing with resources for food. We would like to discuss the possibilities and prove that we could make it a reality here and now”, commented Mr. Lundstedt.
Mr. Grundströmer added: “We will introduce the Scania city bus which runs using ethanol fuel, which means we can directly take India to the BS V emission level. We will test the buses in Bangalore and have received very good response for our ethanol bus from places like Hyderabad and Ahmedabad. We are also having discussions regarding our buses for BRT systems in many states as well.”
On the export front, Scania, as one would expect, plans to take India as an export hub for surrounding markets as well. In addition to exporting products, it is keen on utilizing India’s skills in engineering and its suppliers’ top-notch capabilities for global markets. “India gives us a big export opportunity for this entire region. Apart from exporting products, we would also look at leveraging the engineering skills in the country and also making good use of the excellent supplier network here. With our local presence, it would be more efficient for us to use our resources for global opportunities”, said Mr. Lundstedt.
As the Indian commercial vehicle industry sees the reiteration of long-term commitment from another global heavyweight, one could say that despite extremely tough times the industry is currently going through, India is the place to be, from a long-term perspective.
“We are very glad to present high premium products for the Indian market, but it is also about being close to the customer – every day, every hour, every minute, all through the year, since we are providing transport equipment. We are here as a long-term partner for the Indian transport sector”, concluded Mr. Lundstedt.
Scania Core values
l Customer-first l Respect for the individual l Quality
Testing Equipment from MAHA India
MAHA India, the wholly-owned subsidiary of MAHA GmbH, has supplied a range of equipment to Scania’s manufacturing facility. The products include Roller Brake Tester, Hydro-pneumatic Pit Jacks, Headlight Tester and the revolutionary TruckCam Wheel Alignment System.
Wheel Alignment System from JOSAM
Scania has chosen TRIBOTECH, exclusive distributor for JOSAM wheel alignment system in India, for its new facility. JOSAM is a world leader in commercial vehicle wheel alignment and its geometrical centreline principal results in benefits such as lesser fuel consumption, optimum mileage and reduced tire wear. The JOSAM I-track system with targets on the floor, installed at the facility, is fast, accurate and easy-to-use and is suitable for all types of commercial vehicles including truck, buses, and trailers. JOSAM is also a partner for Scania globally.
Lamps from Hella
Hella has added Scania to its customer list in India, in addition to the global collaboration between the two companies. Hella India 
Lighting Ltd. is supplying a complete range of headlamps, tail lamps, side marker, side indicator, front & rear position lamps and reflex reflectors for the Scania Metrolink intercity coaches in India.
Seats from Harita
Harita Seating System, numero uno in seat manufacturing in the country, is Scania’s partner for seating systems in India. Harita had taken up the design and development of seats in close coordination with Scania in 2012 and has delivered the driver, co-driver, and passenger seats for its luxury coaches. It will also be supplying the driver and co-driver truck seats, which are currently under development.
Pressurized Toilet System from Vetus
Vetus Maxwell India has worked closely with DC Design on the fresh water and waste water system for the Scania Metrolink coach for 
SVLL and has supplied all the components for the pressurized toilet system on the vehicle. Vetus toilets are preferred over chemical or conventional toilets as they are very convenient to install, consume less water, odorless in function and easy to maintain.
