At the beginning of this year, as part of the Scania Group’s recent changes to its commercial operations, with a view to strengthening its regional hubs, Erik Bergvall took the reins as MD of Scania Southern Africa.
Having joined Scania as a trainee in 2007, Bergvall has held several senior leadership roles during his 15-year career with the company. Having spent the first six years of his Scania career at its head office in Sweden, he moved to Germany in 2014, where he held two leadership roles, initially as dealer manager and then as regional director, responsible for the Northwest Region at Scania Germany.
In 2019, he was appointed MD of Scania Middle East, where he delivered strong growth in both vehicle sales and aftersales, and also introduced several new sustainable transport solutions to the Gulf region.
Bergvall’s major focus as MD for Scania Southern Africa is to strengthen the company’s customer proposition, with particular emphasis on the launch of innovations designed to increase customer profitability and operating efficiencies, as well as to reinforce the company’s total solutions approach.
“We have a strong sustainability agenda, and within the next few months we will communicate some exciting news with regards to new product launches, as well as our view on electrification,” says Bergvall. “The mission is to enhance efficiency and optimise total cost of ownership for our customers, all whilst lowering their environmental impact.”
On a global scale, Scania reports increased demand for its low-emission engine technology, in line with the changing legislation. This is also being driven by corporate clients seeking to meet the ESG targets.
“We are positive about the uptake of alternative solutions in the local market as forward-thinking companies seek to play a pioneering role in reducing emissions and to be part of the cleaner environment revolution,” he says.
While the lack of legislation remains the stumbling block to the effective rollout of low-emission engine technology in South Africa, Bergvall says Scania is in favour of the sustainability agenda and, together with customers, the company will play an active role in the rollout of clean engine technology. He also believes that the availability of low sulphur diesel supports the effective rollout.
State of the market
Commenting on the state of the market, Bergvall says demand for commercial vehicles is on a positive trajectory. Following the devastating impact of the Covid-19 pandemic from 2020, the market has experienced a strong rebound in recent months.
Bergvall says the mining industry – the transportation of raw materials in particular – is the biggest demand driver for Scania at the moment. The commodity market is enjoying a “bull run” with prices of several commodities reaching historic highs. Given the strong demand for both its products and services, Scania Southern Africa expects a 10-15% growth of its business in 2022.
“We offer a number of solutions to the mining and quarrying markets. The most important for us is the transportation of material from the processing plants to the harbour or to the end customer. Most of our customers in this market segment are running this type of solution. We are also active in in-pit operations, where we offer our 8×4 heavy mining tipper, which has proven to be a cost-effective option to traditional yellow metal haulers,” he says.
Scania also offers various service vehicles for mining and quarrying operations. The Scania modular approach also provides great opportunities to tailor solutions to specific customer and application requirements.
Supply chain issues
Amid growing demand, supply chain issues continue to hamper the flow of products worldwide. The semiconductor shortage also remains a challenge for global original equipment manufacturers (OEMs). Consequently, the lead times for new trucks have become longer than during the pre-Covid era.
However, Bergvall believes that the situation is improving, and Scania is working hard to mitigate the impact of the situation on customers. “We are in a much better position, and we should see an improvement going forward, which will result in better lead times for our customers,” he says.
Bergvall says customers have also come to understand that supply chain issues are a global problem and are not unique to one OEM. To help mitigate the impact of the supply chain issues, Scania is working closely with its customers to understand their needs, to determine which orders can be postponed and identify circumstances where rental solutions can help plug the stock gaps.
In fact, Scania has seen a big demand for its rental offering as customers look for ways to sidestep the long lead times for new trucks. “We have seen a big demand for our rental services, perhaps because of the waiting time for new vehicles,” he says. “As customers look for ways to drive flexibility in their operations, our rental offering is proving to be a great fit for short-term transport tasks and to bridge the long lead times between ordering and delivery of new vehicles.”
To further grow the business, Bergvall will drive a number of initiatives at Scania SouthernAfrica. The total solutions sales approach, which has been one of the key strengths for Scania over the years, will be reinforced to improve the company’s value proposition to the customer.
Bergvall strongly believes that fleet operators want to have a single point of call for their vehicles, along with relevant services, including financing and insurance. As customers want to focus their efforts on fulfilling their transportation obligations to their clients, they want reliable partners to support them as much as possible, not only with the vehicle, but with all other services around it.
“We are therefore taking big steps to improve our total solutions sales approach by integrating all our commercial activities into one package for the customer,” he says. “We are moving to integrate our Scania Finance facility into the rest of our commercial activities to create a single interface for the customer.”
In addition, Scania recognises the need for a strong skills development strategy. The company has established its own academy, which acts as a training base for technical skills, the lifeblood of its activities.
“We have a strong focus on skills development. We consider ourselves a premium brand and should therefore always deliver premium services. Ultimately, it’s the people who deliver these services to customers and we must therefore be at the forefront of developing the skills we need to improve our service levels to the customer,” concludes Bergvall.