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. Last Updated: 07/27/2016

Scania Sales May Reach Record Levels

bloombergScania trucks passing a building site in Moscow. The truck maker said deliveries last month exceeded 500 vehicles.
Scania, Sweden's second-largest truck maker, said deliveries in Russia last month exceeded 500 vehicles for the first time as a booming economy pushes demand for freight transport.

"In May, we finally reached that delivery level," Raimo Lehtio, Scania Russia Group president and CEO, said Friday in an interview. "The market in terms of demand is actually stronger than what we can get from the factory."

Scania, the biggest Western commercial-vehicle brand in Russia with 31 percent of new truck sales in 2006, this year has sold about 450 trucks a month on average in the country, up from 400 vehicles monthly last year, Lehtio said.

CEO Leif Oestling said last month that Scania might build an assembly plant in Russia if demand continues to grow. Oestling also said European industry-wide sales might grow to as many as 400,000 trucks in the midterm from 310,000 vehicles in 2006 as Russian and Eastern European customers boost purchases.

"For Scania to consider building a plant in Russia is the next logical step," said Jose Asumendi, an analyst with WestLB in D?sseldorf, Germany.

The European heavy-truck market, including Russia and Ukraine, will reach 350,000 vehicles in the coming five to six years, Oestling said.

"I am absolutely convinced of that," he said. "We could also go higher than that, toward 400,000."

Scania's annual Russian sales are likely to double to about 10,000 vehicles over the same time period, Oestling said.

"Then it makes sense to have a manufacturing unit closer to that market because then you get such big flows of vehicles into the market, it's just a logistic calculation," Oestling said. "Within a year, we have to make a decision on setting up a new manufacturing unit somewhere in Europe or in Asia."