NEWS IN ENGLISH | Strong growth for Scania in East Africa
Strong growth for Scania in East Africa
2014-04-08 10:20:00

East Africa is not a new market for Scania. As early as the 1970s the company set up in Tanzania. From there the reputation of its trucks and buses spread around the region. In 1988, the independent distributor Kenya Grange started selling buses in Kenya, followed by trucks. A few years later markets were established in Uganda, Rwanda and Burundi.

Today Scania leads the Kenyan bus market, having more than half the share, and occupies about 15 percent of the heavy-truck market.

"This and a series of other factors made the creation of Scania East Africa a natural next step on the African continent," says Per Holmström, Managing Director of Scania East Africa.

An exciting growth region

A growing middle class, a road network that is getting better and strong demand for both efficient freight transport and safer and more comfortable bus transport are factors that make East Africa one of the world's most exciting growth regions right now.

The creation of Scania East Africa is also aimed at helping the company work efficiently within the East African Community (EAC), a common market and customs union serving 140 million people in Kenya, Rwanda, Burundi, Tanzania and Uganda, and, ultimately, South Sudan.

"A more mature transport industry will follow from cooperation within the EAC - and we naturally want to be part of this development," Holmström says. "New discoveries of oil, gas and other minerals in the region will generate a need for safe, high-quality transport. The increasingly stable political development in these countries is also creating new business opportunities."
A strong brand

Scania has long been a strong brand in the region, its profile patiently built up by the company's former distributor, Kenya Grange. In March 2014 Scania took over the distributorship in Kenya, from where regional operations are coordinated. Kenya Grange continues to support Scania with sales and servicing in Uganda, Rwanda and Burundi.

"With our own company coordinating operations in the region, we will also be much closer to our customers," Holmström says. "Our aim is to work as partners with them in their transport business. Kenya is the largest and most developed economy in the region, with the best road network and the greatest investment in infrastructure. A large number of NGOs and other organisations also have their African base here for purchasing and distribution."

The bulk of Scania's sales - 75 percent - take place in Kenya, followed by Uganda with just over 20 percent. In the next few years business will increase in the other countries. Uganda will also supply South Sudan and the eastern part of the Democratic Republic of Congo.

Scania already has the best service network in the region but this will continue to be expanded in line with the road and other infrastructure investments made in these countries.

Focus on road safety

Holmström says many of Scania's customers are located along the region's main artery, the North Transport Corridor, which stretches from Mombasa in Kenya to Goma in the Democratic Republic of Congo, taking in Nairobi in Kenya, Kampala in Uganda, Kigali in Rwanda and Bujumbura in Burundi. "And that's where we will be too," he says.

With the rapid growth in East Africa, the number of vehicles is also growing fast - as is the number of serious road accidents. Driver training and coaching are therefore important parts of Scania's range of services in East Africa.

"We also want to help to improve safety on the roads here by collaborating with the authorities and organisations, and sharing our global knowledge and experience of road safety," Holmström says. "We want to be part of the solution to problems."

Source: SCANIA