Where to for Scania?

The latest moves in the Volkswagen, Scania and MAN saga leaves the Swedish truck maker in an uncertain position. After the relative stability following the takeover of Scania by Volkswagen and the decision by the German carmaker to adopt a hands-off approach to the Swedish company the latest developments are posing questions without clear answers.

When Porsche bought Volkswagen at the end of 2008 the luxury carmaker made it very clear they were not interested in producing and marketing trucks. As a result, Volkswagen hived off their commercial vehicle operation in South America to MAN. Swedish share ownership laws stated Porsche needed to make an offer for all of Scania’s shares before the end of January because of the high percentage of shares they already owned. Now the Scania board is recommending shareholders do not accept the Porsche offer.

The question must then be asked, whither Scania? They are currently in a position where their majority shareholder is not interested in being an active participant in the business. In their position there is no opportunity to become part of a larger global organisation to match the other big players, Daimler, Volvo and Paccar.

Scania CEO Leif Ostling

Scania have always insisted upon taking an independent, individual course for the development of their business. However, there has been considerable consolidation in truck making globally and Scania are in danger of becoming a small niche player when compared with most of their competitors in Europe.

Statements coming out of Scania headquarters in Sweden are playing down the situation, stating the Porsche offer is purely mandatory, made because the company was obliged to make it.

What is not mentioned is the abandonment of plans originating in Volkswagen for a global truck manufacturing operation consisting of Scania, MAN and Volkswagen’s South American commercial vehicle operations. These plans have disappeared from the radar and Scania’s long-term intentions remain unclear.

They are fast running out of potential partners with which to form a global alliance. There are also in danger of falling behind their rivals who can spread development funding across a global range of trucks while Scania need to do the same development work for trucks with a much smaller market, sold only in Europe, South America and some smaller markets, like Australia.