Scania plans production hike as profits fall

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Scania plans production hike as profits fall

Swedish truck manufacturer Scania announced on Friday that it would step up production to meet demand in Europe, after a decline in profits in the second quarter.


Profits fell five percent in the second quarter from the figure a year earlier to 1.376 billion kronor ($210 million), even as sales jumped 19 percent to 22.798 billion kronor.

The decline in profits was mainly due to rising operating costs.

According to Scania, the second half is expected to be favourable as customers rush to buy trucks before new tougher emission standards kick in.

"The economic climate remains uncertain, but there is a replacement need," CEO Martin Lundstedt said in a statement.

"Demand is also supported by customers that are investing in Euro 5 vehicles before year-end, when the transition to the Euro 6 emission standard will occur."

As Euro 5 trucks are cheaper, orders in Europe were up 25 percent year on year in the second quarter, the company said.

"In light of improved order bookings in Europe, Scania will increase its daily production rate during the third quarter in order to maintain short delivery times," Lundstedt said.

AFP/The Local

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