Chi St tChina Strategy

Mats HarbornMats HarbornScania China Strategic Centre

中国市场发展China General Strategy

Build a premium brand

Geographic control Geographic control

Clear segmentation

Most professional organisation Most professional organisation

Always sell the right specification

After sales support must followAfter sales support must follow sales

Long-term presence

A Scania customer should be proud and know how to use a Scania!

Source: Internal analysis

What are we selling?

BGoods and PeopleA

Our Products

Tonne-kmkWh

Safe

Passenger-km M3-kmkm

Total Operating Economy

Repair &

Reduced Costs

Low fuel consumption8%

5% 3%

Repair & maintenance

Admin

Tyres

Higher Revenue

The right vehicle for the right task

consumption

Driver training

Effective financing

35%

10%

9%

8%

Driver

VehicleFuel

High uptime

Fast repairs

Driver appeal

Long service life and high resale value30%

Driver

Tolls

Valid for all markets and segments

Customers have high gutilisation of equipment

Heavy trucks (>16 tonnes)

Heavy buses (>12 tonnes)

Industrial and marine Industrial and marine engines (9-16 litre)

Scania Modular SystemScania Modular System

Growth OutlookTotal market

1,000,000Public and special

700,000

800,000

900,000Public and special

Construction

Distribution

Long haulage

400,000

500,000

600,000Long haulage

100 000

200,000

300,000

400,000

0

100,000

09 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Market Maturity Ladder

Price A • Uptime• Life cycle cost

S f t• Safety• Environment

B • BrandB • Quality• Service• Comfort• Operating cost

C • Low price• Design• Capacity

Demands

Source: Global Insight external research and Internal AnalysisSource: Global Insight, external research and Internal Analysis

Diffusion of innovation

Diffusion of innovations is a theory that seeks to explain how, why, and atthat seeks to explain how, why, and at what rate new ideas and technology spread through cultures.

Optimisation primarily in Core processesLogistics next step

Distribution Centre

OEMOEMsupplier

High valuesupplier Customised product

Customer promise

Medium valueSequence / J-I-TTime critical

Distribution Centre

Low valueBulk or stock-refillLess time critical

BRIC HDT Market CompositionB is growing in immature and price-focused market A will grow in

C is shrinking due to environmental and economic demands

market A will grow in sustainable markets

C B A

demands

C B A

Now 2020When will A surpass B and what will the demands be on the future truck?

Scania China Network Development 2016

Dragon School

Lifting status of Service technicians

中国市场发展Scania China Parts Centre

Scania China’s Captive Dealer