Scania to lower its production rate from November
Starting in November, Scania will adjust the production rate at its units in Europe. The background is a deceleration in demand in various markets. The adjustment will be handled within the framework of existing flexibility agreements between the company and trade union organisations.
Government financial problems in Europe and the US have now begun to affect economic activity and have led to hesitation among customers.
“It is a matter of deceleration in Europe, but also a slower pace of order bookings from the Middle East,” says Martin Lundstedt, Executive Vice President in charge of Scania’s sales and marketing.
During the first nine months of 2011 Scania has maintained a high, stable production rate, but starting in November the company will lower its production rate due to falling demand. Compared to the end of the third quarter, at the global level this means that the vehicle production rate will be reduced by 10-15 percent.
“We will lower the production level and adapt our costs by using the existing flexibility. The adjustment in production level will be handled within the framework of existing flexibility agreements between the company and trade union organisations at the various production units,” says Anders Nielsen, Scania’s Head of Production and Logistics.
“In Latin America, demand has stabilised at a high level, which means that we have continued high capacity utilisation at our production units in Brazil and Argentina,” Mr Nielsen says.
For more than a year, Scania has been working with short, stable delivery times of about 8 weeks in Europe, in order to send the right signals to the production network as early as possible in case of changes in order bookings. This minimises inventory build-up and enables the company to limit its order book.
For a long time, Scania has been working in various ways to boost flexibility in its production network. The company recently signed a new flexibility agreement with trade union organisations in Sweden that further increases its ability to respond to fluctuations in demand.
For further information, please contact:
• Erik Ljungberg, Senior Vice President Corporate Relations, tel +46 8 553 835 57
• Hans-Åke Danielsson, Press Manager, tel +46 8 553 856 62
Scania is one of the world’s leading manufacturers of trucks and buses for heavy transport applications, and of industrial and marine engines. Service-related products is a growing proportion of the company’s operations, assuring Scania customers of cost-effective transport solutions and maximum uptime. Scania also provides financial services. Employing some 35,500 people, Scania operates in about 100 countries. Research and development activities are concentrated in Sweden, while production takes place in Europe and South America, with facilities for global interchange of both components and complete vehicles. In 2010, net sales totalled SEK 78 billion and net income amounted to SEK 9.1 billion. Scania press releases are available on www.scania.com