Scania aims to become leader in sustainable transport

For 30 years now, Scania trucks have hauled billions of tonnes of cargo from border to border in the East African region, and today command a significant share of the regional market.

For decades, overseas truck manufacturers have designed heavy vehicles “fit for African roads”, a narrative that Per Holmström, the Managing Director, Scania East Africa Limited, dismisses as now overtaken by events, namely the recent infrastructural developments in the region.

“The roads here are fairly okay. There is no need, therefore, to build heavy bodies or install extra springs because this only means higher fuel consumption and higher maintenance costs,” he reasons.  

Tanzania has been the regional hub of Scania for decades. But when Holmström joined the company four years ago, Scania East Africa took over distributorship of the products, becoming the new leader in the market.

Today, Scania East Africa boasts a market share of 25 per cent, up from between 10 and 15 percent before 2014. The rest of the market is shared by other leading market players including Mercedes, MAN and Volvo.

Yet Holmström wants more.

“Mercedes and Volvo have equally high quality vehicle parts. But as we implement our new strategy, we are targeting between 30 and 35 percent of the market share by 2020,” he projects.

As the nerve centre of the region, Kenya now supplies Tanzania and the rest of the regional market with Scania trucks. These are assembled in the port city of Mombasa by local bodybuilders using the same technology applied by the parent company in Sweden –supporting the government’s big 4 agenda pillar of promoting local manufacturing.

But the Swedish truck maker, who officially launched its New Truck Generation in Kenya this past week, has kick-started a raft of strategies that will dramatically disrupt the regional trucking business landscape.

One of these strategies is the advocacy for sustainable transport in Kenya and in the region. In this day and age when concerns about climate change and global warming have been rife, Holmström argues that Kenya needs strong legislation to be able to regulate petrol and diesel emission limits by vehicles.

“The government should discourage engines below Euro 5 when it finally rolls out the bus rapid transit (BRT) transport system in the city, for instance. Kenya would do well by joining other African countries such as Morocco that have strict guidelines on what motor vehicle emissions standards are allowed,” he argues.

On how recent blockbuster railways construction projects in Kenya and the region will impact trucking in cross-border trading, Holmström emphasises that trucking and rail transport have never been antagonistic to each other, adding that the two modes of moving goods complement each other. 

“Traders should have the freedom to choose between rail and road to ferry their goods. Improving efficiency at the termini and at border customs office would go a long way to improve business for all the stakeholders,” he says. 

Exploitation by untrustworthy spare part dealers further compounds the troubles of investors in the transport industry.

Holmström argues that after selling vehicles, some truck manufacturers fall short of availing essential vehicle spare parts and after sale services –leaving their customers on their own devices.

Settling for cheap spare parts at the expense of quality and durability though has its consequences in the long run, warns Holmström. The consequences are even worse for people in the transport business and who own large fleets of vehicles, he says.

“There is a reason why different brands of spare parts are priced differently. What is the point of buying an item that will last only a third of its expected lifetime? You cannot get the best quality of spare parts anywhere in the world at half the price,” he says.

It is this gap in the local market that the Swedish truck maker hopes to fill, according to Mr Holmström.

“We hope to do business in Kenya in the same manner that we operate in other parts of the world including in Europe and America,” he says.

To do this, Scania has an expansive regional network that ensures that customers have access to genuine parts from its offices and branches, to eliminate the agony associated with finding quality spare parts while providing maintenance services “so that transporters can concentrate on their core business of transport”.  

Transporters, Holmström adds, incur huge losses when trucks in their fleet are grounded for lack of quality spare parts and maintenance services.

“Having 40 percent of your trucks lying idle in the garage hurts your business. Our strategy is to have 95 percent of our customers’ trucks are up and running,” Holmström explains.

That is not all. In their robust sustainability programme, Scania will provide driver training, fleet management services to increase efficiency and cut down on fuel consumption.

“It does not make economic sense when a truck has to be serviced after every 10000 kilometres. Our trucks are now comfortably doing 30000 kilometres and with the New Truck Generation, we will attain the 60000 kilometres mark,” he says, adding that with quality diesel and oil products in the market, this is possible.  

According to him, many hours are wasted when drivers rest along the route, saying this in turn limits the number of trips that a truck can make from Mombasa to Kampala, for instance.

“Part of our plan is to encourage transporters to hire enough drivers so that they can work in shifts to minimise the number of hours when the trucks are parked for the drivers to sleep after hours on the road,” Holmström says.

Drivers, he claims, are mostly to blame for the majority of road accidents involving trucks, either because of exhaustion or reckless driving.

“This training will instil discipline for safety of drivers and other road users,” he says.

According to him, managing fleets for transporters will check freewheeling and theft of fuel that truckers are infamous for.

Fuel constitutes the largest proportion of the cost of operations in transport and is, therefore, the biggest headache for transporters.

“If you reduce fuel consumption and minimise the cost of repair and maintenance, that is money straight into your pocket which translates to bigger profits in the long term,” Holmström observes.

Scania is engaging different parties in the industry hoping to reduce operational costs for transporters and to enhance competitiveness. Mr Holmström calls this initiative “a win for all”.