Scania Has Not Seen Normal Seasonal Dip in Europe in the Third Quarter image

Scania truckmaker managed to avoid the usual seasonal slowdown in the European market in the third quarter as fleet operators increased new vehicle purchases.

Fleet operators hurried to purchase new vehicles during the third quarter before the enforcement of the new emission standards which will make vehicles more expensive starting with January 1st. Demand for heavy-duty trucks has also went up, a bright spot in the depressing European auto industry. In July, Scania announced it will increase production in two stages by the end of this year.

“We have seen some softening during the summer, but one should put that in the perspective of the order backlog, the lack of visibility and the extreme demand that we have had,” Chief Executive Martin Lundstedt said during a presentation at Scania’s headquarters south of Stockholm.

Automakers rely on the fact that ageing fleets purchased in the boom years until 2008 have to be replaced and demand for the Euro 5 trucks older models before the new emission regulations have been implemented, played an important role.

“There is a replacement need and an interest among customers to invest in Euro 5 trucks before year-end. In the light of this, we did not see the normal seasonal downturn in European order bookings during July and August,” said the company, which is majority owned by Volkswagen.

The new Euro 6 trucks cost with 10,000 euro more than the Euro 5 trucks, which represents a price increase of 5% to 10%, mainly because of the redesigned engines.

Source: Reuters