Scania eyes big role in India’s mobility space

Stefan Palskog has been in India for just a little over a month but has seen enough to know that the sky is the limit in the mobility space.

As President of Scania India Operations, he is also aware of the country’s potential as a growth lever in the coming years. Palskog is no stranger to emerging markets and has spent time in Argentina and Brazil. In India, he believes there is a lot that can be done beyond just making trucks and buses.

One such area is connectivity where headquarters in Sweden is pushing the envelope to redefine the transport map. “I think we can make the connection in the chain when it comes to local transport needs. The connection system was established many years ago and we can contribute to it here,” says Palskog.

Connected vehicles help transport operators keep a tab on their fleets. They also gather valuable information which allows services to be tailored to address specific needs. This includes a focus on lowering fuel consumption by developing a better understanding of individual driving styles.

As Palskog says, connection flow is something that the company has been doing for many years and taking that knowledge out to the market is critical. “What we do is to follow the value chain and that knowledge can be transferred to the customer,” he explains.

Scania clearly intends to step on the gas for this activity in India too. For instance, once the elusive goods and services tax becomes a reality, it will contribute to improving the productivity of the Indian transport sector.

Going forward globally, the company envisages a scenario where autonomous trucks and vehicles can communicate directly with each other while in service. This will be helpful in situations like bad roads or heavy rains where one vehicle can warn the other is on its trail.

The other area of potential growth for Scania in India is in bus rapid transit (BRT) systems.

“BRT must be better defined to stakeholders since it involves operators, manufacturers and infrastructure systems,” says Palskog. He cites the case of Delhi which has an effective metro in place but could do with a better bus feeding system.

“I think BRT can be done so long as there is political will to change the infrastructure and make things happen,” adds Palskog. At the consumer end, likewise, there needs to be a change in attitude where car and bike users should opt for BRT as a mobility option.

The Scania President is equally upbeat on the Centre’s move to create smart cities “We have other solutions beyond which go beyond just offering buses like alternative fuels,’ he says. This is part of its endeavour to provide sustainable transport keeping in line with the realities of tighter emission norms in the near future.

Nagpur is a case in point where Scania operates buses that run on fuel generated from waste. This has become a reality thanks to a biogas plant and is in line with the company’s mission of ‘local waste to local fuel for local transport’. Palskog says this drive on alternative fuels can be scaled up in smart cities in tandem with initiatives like BRT.

Getting back to the core business of selling trucks and buses, he believes it is important to stay focused in the premium space where Indian customers are gradually gravitating towards Scania as a brand. According to Palskog, the top priority is to create a good supplier structure for buses on the lines of what is in place for trucks. The key is to localise and ramp up the supply chain to gradually become part of the Scania global system even though this will take time.

This is an imperative as the cost structure in the subcontinent is lower than what it is back in Europe. Apart from this, India is tipped to become one of the most critical markets for Scania both in terms of its domestic potential as well as doubling up as a hub for exports. The markets it could service include Africa, ASEAN and even Europe.

Palskog admits that the real global drive began with the growth of emerging markets. For 25-30 years, the company had one product structure and we could not “think economy by doing more of the same”. Today, according to him, the modular product system is critical in terms of economies of scale for trucks and buses. The fewer the number of parts, the easier it is for the network to stock spares for customers.

Indian suppliers can also hope to gradually become part of the modular product system even as they work on localisation. The other interesting part is that since Scania and MAN Trucks have a common parent in Volkswagen, there could be collaborative work in R&D and sourcing of components. Even while Palskog refrains from commenting, India’s growing base of young engineers will naturally aspire to become part of a larger global script.

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