Scania, a Swedish truck and bus manufacturer, will open a new truck production plant in China, starting construction in the second quarter of 2022.
The company also manufactures diesel engines for heavy vehicles, as well as for marine and industrial applications in general.
During 2021, Scania continued its expansion in the Asian market, with the acquisition of industrial land and ongoing work to establish a wholly-owned truck production plant in Rugao, in Jiangsu province, 150 km northwest of Shanghai.
Construction is scheduled to begin during the second quarter of 2022 and will continue through 2022.
The investment is part of Scania’s strategy to expand operations in China to a full-scale unit in the company’s global production and supplier structure.
At the beginning of 2021, Scania had planned a high level of production capacity to cope with its large order book, as a result of the impact of Covid-19 in 2020.
However, at the end of the first quarter, its production began to be affected by supply shortages, mainly due to the semiconductor crisis.
In February, the already limited situation was made worse by a winter storm in Texas, United States, which severely affected the supply chain of a major supplier.
Early in the second quarter of 2021, a combination of events including the blockage of the Suez Canal and a major fire at a semiconductor supplier’s facility in Japan placed even more strain on the supply chain.
At the end of the quarter, Scania brought forward planned vacations and added stoppage days due to component shortages.
During the holiday period, the company worked intensively across functions to resolve the situation, leading to production restarting as planned.
At the same time, however, the pandemic forced some of Asia‘s major semiconductor suppliers to halt production, forcing Scania to slow production again.
In the second half of 2021, production was successively affected by shortages that affected its ability to deliver according to customer needs.