Focus on profitability and quality in continued reorganisation of Scania's busbuilding operation

Focus on profitability and quality in continued reorganisation of Scania's busbuilding operation The reorganisation of Scania's busbuilding operation is continuing with a view to the long-term development and reinforcement of the company's bus business, improvement of its competitiveness and the achievement of a sustainable level of profitability comparable to that of its truck operations. Scania now presents a structure designed to safeguard the long-term product development of bus chassis, exploit the benefits of a global market organisation and create the conditions for a healthy bodybuilding operation. The buses of the future will be increasingly complex and the technology content will be higher. In addition, manufacturers are under growing pressure from the general public to assume greater product responsibility, for example in terms of safety and environmental performance. The programme of changes which is about to be initiated, and on which codetermination negotiations have begun today, will be completed in 2002. The achievement of a sustainable level of profitability requires the development of trucks and bus chassis to be integrated, and the benefits of synergies in the areas of marketing and sales to be exploited and expanded. The quality assurance of common components and manufacturing processes is essential. With this in view, Scania is consolidating its product development, production, purchasing, marketing and sales resources into common units with responsibility for both trucks and bus chassis. The reorganisation of the busbuilding operation, which was initiated a few years ago, is now continuing and may be summarised by the following measures: -Coordination of marketing and sales of bus chassis and bodied buses within Scania's global marketing organisation -Product development of bus chassis to be transferred to Södertälje and integrated with that of trucks at the Scania Technical Centre -Purchasing activities for bus chassis to be integrated in Scania's overall purchasing organisation -Production of bus chassis and production process development to be transferred to Södertälje -A separate subsidiary with responsibility for Scania's bus bodybuilding operations as a whole to be established and based in Katrineholm · Bus marketing and sales Increased customer demands and a greater customer focus mean that the market and sales units of the busbuilding operation needs to be strengthened, and priority given to the profitability of the bus business. A separate bus marketing and sales unit forming part of Scania's global market organisation in Södertälje will assure the prospects of achieving sustainable profitability in the busbuilding operation. · Product development, bus chassis The transfer of product development for bus chassis to Södertälje and its coordination with that of trucks at the Scania Technical Centre will yield significant synergies, since up to 85% of the components used in these products are common. The full benefits of common development resources and expertise will be realised in the development of new bus chassis and trucks. In addition, all support functions, such as IT, laboratory and test facilities, will be utilised more efficiently. The provision of skills will also be facilitated, while the scope available for job rotation and personal development will be improved. · Purchasing, bus chassis Improved efficiency will result from the transfer of purchasing activities for bus chassis to Södertälje and their integration with Scania's overall purchasing activities, and from the greater utilisation of common support functions. · Production, bus chassis The production of bus chassis will be transferred to Södertälje as a means of simplifying and coordinating production and production development. In accordance with Scania's strategy, the development resources will be coordinated in a single location within the company's global organisation to ensure the quality assurance of essential components, and of manufacturing processes and methods. This will also yield logistical benefits. The quality assurance of components, processes and methods will enable Scania to meet the demands of greater global product responsibility in a more effective manner. · Bus bodies Bodybuilding is treated separately since this activity is of a different nature to the development and production of bus chassis and trucks. As a result, it is to be reorganised in the form of a separate subsidiary with responsibility for all bus bodybuilding operations within Scania. The new company will be wholly-owned by Scania, and will be responsible for development, production, purchasing and commercial issues relating to bus bodies. Based in Katrineholm, its responsibilities will include bodybuilding operations in Sweden, Denmark, Poland and Russia. For further information, please contact: Magnus Hahn, Scania Business Communications, 46-70-5517903 Gunnar Boman, Scania Buses & Coaches, Communications, +46-70-5508606. Scania is one of the world's leading manufacturers of trucks and buses for heavy transport applications, and of industrial and marine engines. With 26,900 employees and production facilities in Europe and Latin America, Scania is one of the most profitable companies in its sector. In 2000, turnover totalled SEK 53,800 million and the result after financial items was SEK 4,500 million. Scania products are marketed in about 100 countries worldwide and some 95 percent of Scania's vehicles are sold outside Sweden. Bus manufacture takes place in Sweden, Denmark, Poland, Russia, Argentina, Brazil and Mexico. Scania press releases are available on the Internet, www.scania.com ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/10/23/20011023BIT00910/bit0001.doc http://www.waymaker.net/bitonline/2001/10/23/20011023BIT00910/bit0001.pdf