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After Chinese manufacturers such as BYD expand into Europe with electric vehicles, they are expected to target another market: big rigs.
One of Europe’s top truck makers says the 25 or so Chinese truck and bus makers with a presence in the region should be taken as seriously as Tesla because of their battery and software expertise. I warned you.
Christian Levin, head of Scania and Trayton at Volkswagen AG, said in an interview that Chinese electric bus brands were able to “establish themselves fairly quickly thanks to having access to very good battery technology. “It was,” he said. “If you apply it to trucks, you can imagine a similar development.”
Scania, Volvo and Daimler Trucks offer electric rigs, but their sales success remains limited despite Europe’s push to cut transport emissions. BYD is building know-how and scale from its rapidly expanding passenger car business and is transferring some of its capabilities to battery-powered trucks. The maker of the 8TT big rig sells electric buses in markets such as Germany and has plans to build an EV factory in Hungary. Other Chinese companies with a presence in Europe include Yutong, Sany and JAC Motors.
Scania is setting up its own factory in China to benefit from growth in the world’s largest truck market, while Levin expects competition to increase domestically. The company’s facility, currently under construction in Rugao City, Jiangsu Province, is scheduled to start operating in the second half of 2025 and is licensed to produce as many as 50,000 vehicles a year, about half of the Swedish brand’s current production volume. are doing. Scania has not yet decided which models will be manufactured there.
Scania is a premium brand that typically commands double-digit profit margins, and most of its products are sold in Europe. Levin said setting up a store in China would reduce production costs and solve capacity issues that caused the company to lose business in the Asian country due to long delivery times.
The move will also help Scania tap into Chinese technology expertise by hiring skilled workers or potentially acquiring software startups specializing in human-to-machine interfaces and voice recognition. said the CEO. This market is also a good place to start selling in other parts of Asia.
“China is where the sub-suppliers are, it’s where it has its own market, and it has good trade agreements with most of the countries around it,” Levin said. “Exporting from China is easy.”
Scania is catching up in China. Daimler Trucks has been manufacturing Mercedes-Benz rigs in the country with local partner Foton Motors since 2022. Late last year, Volvo called off plans to buy Chinese truck maker JMC Heavy Duty Vehicles, which makes buses, engines and construction equipment in China, and also has joint ventures with the company. Partnered with local truck manufacturer Dongfeng Trucks and construction equipment manufacturer SDLG.
Scania will operate the factory without a Chinese partner, giving the Sweden-based brand full control over manufacturing processes and intellectual property.
“In the current economic and political environment, companies are taking bold steps to start industrial operations in China,” said Roman Matysek, partner at strategic consultancy Monitor Deloitte. “For companies that have missed out on M&A opportunities in the region, entering the market with their own brand portfolio and participating in Asia’s growth story is a good strategic solution.”
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