Scania backs NZ economy, expands local operation
Swedish truck manufacturer, Scania, likes New Zealand’s economic outlook enough to invest millions in expanding its local presence. Mark Jennings reports on the company’s move to acquire Truck & Trailers Service Centres - a nationwide servicing business.
The market for new trucks in New Zealand is relatively small but it’s highly competitive.
More than 20 companies compete to sell about 2,000 heavy trucks a year.
The local market is unusual in that it is split between European, American and Japanese manufacturers.
In other countries the market tends to be dominated by brands from one of these regions.
Despite its small size, New Zealand is an increasingly attractive market, according to Mattias Lundholm, Managing Director of Scania New Zealand.
*Watch the full interview with Mattias Lundholm in the video player below*
“While New Zealand doesn’t have much in the way of mining, it does have big agricultural and forest industries. And, as I like to point out, nearly every product people consume in this country has, at some point, been carried on a truck.”
“During the lockdown we were surprised to find that the kilometres driven by trucks dropped by only 30 percent, I thought it would be much higher, and I think it shows how central to our economy trucking is.”
Lundholm says Scania New Zealand had its best sales month ever in June and in the last 12 months had lifted its market share by 100 percent.
Scania established its own presence in New Zealand a little over a year ago, having previously sold all its vehicles through a distributor.
The move to acquire seven Trucks & Trailers service centres around New Zealand rapidly expanded its footprint.
The rebranding of the Trucks & Trailers centres will lift Scania’s stable of nation-wide dealerships to 30, and almost treble its current number of employees to a team of more than 190. The deal will become effective in November.
“This arrangement also represents - and allows for - what will be a significant investment going forward by Scania NZ into the provincial New Zealand communities where our new locations are based.
“Beyond that it is also a business decision that sends a powerful message to other global brands about the attractiveness of NZ Inc. with its comparatively strong fundamentals – especially given what is currently happening around the world,” says Lundholm.
Trucks & Trailers was started and has been owned by the Wright family for more than 30 years. Current owner Mark Wright says it represents much more than a business to his family, and they are happy to be handing over to a premiere brand like Scania.
“One of our key motivations for considering this opportunity was to build on what Trucks & Trailers has already proudly achieved in the last 33 years. It is clear our business philosophies, culture and aspirations are very well aligned and Scania New Zealand provides the scale and infrastructure to continue this on our behalf over the next 30 years and beyond.”
Globally, Scania has the biggest retail presence of any truck manufacturer, and Scania Executive Vice President - Head of Commercial Operations, Mattias Carlbaum, says the time was right to lift its investment in New Zealand.
“This is one of Scania’s most significant investments in our global structure this year. During these challenging times, we are taking an important step in our business commitment in New Zealand where we see capacity for growth within its local market.”
Lundholm says that by acquiring a major servicing business, Scania will move closer to its customers and have more control over important elements of the relationship.
“In the trucking industry there is a saying that the sales person sells the first truck, but after sales service sells the next one and the next one.
“It was important for Scania to align with a business that shared its values towards its people, customers and community, and Trucks & Trailers was an ideal fit.“
In 2018, Scania delivered 88,000 trucks to customers in over 100 countries and maintains a big research and development facility in Sweden. Lundholm predicts that Scania innovation and focus on sustainable transportation systems will, at some point, give it an advantage in the New Zealand market.
“I think there are three areas where we are seeing, or going to see, major tech shifts in the transport industry. Autonomous vehicles, electrification and connected vehicles – with 5G playing a big part in the latter. Scania is well positioned in these areas as well as being a leader in alternative fuels.
“Our current market share in New Zealand is 12 percent. In Europe we have 18 percent of the market and I see no reason why we can’t lift our New Zealand share to around that level.”
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