Scania kicks off India Innings

When it is up and running a year from now, Scania’s regional product centre (RPC) in Bangalore will help the company double its sales, from an average of 200 trucks a year over the last three years to 400 a year over the next five.

The RPC will be the seventh facility worldwide at which Scania not only assembles special-application truck chassis from CKD kits but also bodyworks them. To begin with, it will mount rock bodies from suppliers onto the assembled chassis and deliver complete tippers ready for use. Concrete pumps, skylifts, and hooklifts could follow in the future.

Similar Scania facilities in South Africa, South Korea, Malaysia, Taiwan, Dubai, and Russia deliver complete vehicles expressly adapted for customers’ individual requirements and the operating conditions peculiar to the respective regions. Interestingly, the one in South Korea even builds its own tipper bodies. Besides shortening the delivery time for buyers of its mining tippers from about four weeks at present and enhancing its spare parts support capability, the India regional product centre also provides the foundation for an entry into the bus business with locally assembled chassis. The newly established Scania Commercial Vehicles India plans to introduce two- and three-axle coaches and city buses, possibly by 2013.

Scania will bring in its K-series chassis, which provides a versatile foundation for the construction of a wide variety of bus and coach types — with low floors, high decks, and everything in between. These chassis form the basis for Scania’s own low-entry OmniLink city/suburban bus, the Scania Irizar i4 intercity bus, and the Scania Irizar Century and PB coaches.

Its long-standing partnership with Spanish coachbuilder Irizar, which has resulted in recent years in the joint development of the latter’s highly successful PB and i4 models, is almost certain to be extended to India. For some time now Irizar-TVS has had the technology and trained manpower to build the Century coach and the Iria city bus, according to N Subramanian, president of Irizar’s Indian joint venture. “What we did not have is a suitable chassis.”

It soon will, in the form of the K-series chassis, powered by the five-cylinder DC9 (in ratings of 230/270/310 hp most suitable for the two-axle city bus and coach) and six-cylinder DC12 engines (340/380 hp for the three-axle coach). Both engines share the same modular architecture, and the latter is in fact the same engine that does duty in the P380 tipper imported from Scania’s Zwolle factory in the Netherlands and sold by Larsen & Toubro. Thanks to its celebrated modular construction system, Scania’s bus chassis share 85 percent of their components with its trucks (the cab being the main exception perhaps). This makes for more reliable vehicles, easier maintenance, and a simpler spare parts supply chain.

A year-long investigation by MD designate Henrik Fagrenius has revealed other applications besides tippers that “suit our business model”. (This, he explains, is centred on delivering the highest uptime and thus the lowest total cost of ownership in the industry.) The most attractive opportunity he sees is in overdimensional cargo (ODC) transports — here the cost of the transport often pays for the cost of the truck and trailer and then some. Accordingly, Scania will start trials later this year with a few imported 6×4 tractors, which will be assembled locally once the RPC is ready. These will be almost certainly powered by the 500hp version of its 15.6-litre DC16 V8 engine, whose power cylinder, separate heads, and valve gear are identical to those of the 11.7-litre DC12 in the P380 tipper. With more than 600 engines of the latter type already in operation, L&T’s existing service network will be able to support the tractors from the word go.

Another segment Fagrenius sees immediate prospects in is container haulage between ports and inland depots. With much more intensive vehicle utilisation here than in other regular tractor–trailer operations, “our product could be profitable for the customer”, he told this correspondent recently. While there’s no question of Scania’s highly specified vehicles competing on price with the crude offerings from Tata and Ashok Leyland that predominate in this segment – in Europe it is in fact the most expensive brand for many applications, – the promise of “high uptime and low fuel consumption” will make a compelling value proposition for many operators, Fagrenius says. A Scania would be profitable for a customer in “any application where the total cost of ownership plays a big role and where there is a possibility of a higher average speed,” he elaborates. A particularly good selling point in the coach segment, where the company plans to start trials later this year with a few undisclosed models.

Fagrenius also sees attractive prospects for Scania’s firefighting vehicles, a business he says it’s very strong in elsewhere in the world. And while it has “not yet decided” whether to offer its military vehicles, for logistical operations or armoured personnel transports, he concedes that L&T would be a likely partner for this business. Applications introduced over the next few years will primarily be those in which the engine is required to run continuously — like concrete pumps. “We’re doing quite well in this segment in other parts of the world because we have a very reliable engine,” Fagrenius points out.

Marketing and service support for mining and construction tippers will remain the responsibility of L&T, but Scania Commercial Vehicles India will have its own marketing organisation for all the other vehicle types and for buses. While the trucks will eventually be sold through a dealer network, the buses will be sold by Scania itself.

In Europe, Scania trucks in line haul duty can cover 300,000km or more a year, and are sold after three or four years. Even in their second lives the trucks often run a million kilometres more, he says. In India, he suggests a used truck business could make sense for mining tippers, and reveals that Scania is developing programmes for maintenance of trucks in their second lives. An interesting value proposition in this (paradoxically) value-conscious and price-obsessed market.