TRATON sold a total of 249,500 vehicles between January and September 2023, up 15% compared to the first nine months of 2022. As a result, sales revenue increased by 20% to €34.2 billion. The Group’s adjusted operating return on sales rose by 3.9 percentage points to 8.6%, while its adjusted operating result more than doubled from €1,347 million to €2,929 million.
The following article examines the key drivers that have contributed to the Group’s positive results, which have been achieved in a challenging global economy against a backdrop of geopolitical uncertainty.
Key drivers behind the TRATON GROUP’s positive results
A range of factors contributed to the TRATON GROUP’s encouraging performance in the first nine months of 2023. All brands saw improvements in their unit price realization. Scania also recorded continued progress in its Vehicle Services business. Similar factors, including the utilization of higher production volumes, were also relevant to MAN Truck & Bus’s results. An improved market and customer mix were additional factors for Navistar, whereas Volkswagen Truck & Bus’s (VWTB) performance was driven by better product positioning.
The TRATON GROUP’s brands achieved these positive results despite higher component, raw material, and energy costs, ongoing disruptions in the supply chain, and the global rise in inflation.
Transforming Transportation: successful Group-wide electrification efforts
The TRATON GROUP’s strong performance shows that its commitment to driving the transition to electric vehicles — which includes investments in infrastructure, production facilities, and joint ventures — is paying off. All the Company’s brands already offer battery electric products across major applications and weight classes.
In October, the TRATON GROUP announced the establishment of a new service entity: TRATON Charging Solutions, accelerating access to charging locations for TRATON brands’ customers. In addition to facilitating the transition of fleets to battery electric commercial vehicles, this also makes it easier for truck drivers to find the best place to recharge their e-trucks.
In September, Scania started operations at its new battery assembly plant in Södertälje, which is located next to the brand’s chassis assembly. With an investment of SEK 1.5 billion, this 18,000-square-meter facility will bolster Scania’s ambition for all-electric products to comprise half of its sales by 2030. The battery cells are jointly developed by Scania and Northvolt and produced at the Northvolt Ett gigafactory in northern Sweden. The plant will assemble these battery cells into modules and packs tailored for Scania’s modular production process. The cells are able to power e-trucks for 1.5 million kilometers — equivalent to a truck’s entire lifecycle.
Scania recently celebrated another victory, with its 420 R tractor crowned the winner of the prestigious European Truck Challenge comparison test. The vehicle’s Super powertrain, the common base engine of the TRATON GROUP, delivered 4.9% better fuel efficiency than its competitors. This award further underlines Scania’s industry-leading position as a highly fuel-efficient brand.
In October, MAN successfully delivered its inaugural eBus to a customer in Africa — the first delivery of this kind outside of Europe. The Lion’s Explorer E vehicle found its new home with South African Golden Arrow Bus Services and will undergo testing in Cape Town. This electric bus is built on the upcoming Lion’s Chassis E platform, which is set to go into series production in 2024. This development is a testament to the successful application of the Group’s electric vehicles in real life.
Sales of MAN’s long-awaited new eTruck, which can cover 800 kilometers a day and eventually up to 1,000 kilometers a day, commenced on October 30. The MAN eTGX will serve long-distance transportation, while the MAN eTGS will be used for distribution services. The first 200 units are scheduled to roll out to selected customers as early as 2024 before volume production at MAN's Munich plant starts in 2025 as orders ramp up.
Navistar’s IC bus brand introduced the next generation of student transportation with its all-electric IC Bus in July. It offers enhanced safety for drivers and students, improved operating efficiency, and reduced operating costs.
In September, Navistar also became the latest TRATON brand to join the UN Global Compact, the world’s largest corporate sustainability initiative. This cements the company’s commitment to sustainability and provides Navistar with a framework to contribute actions towards its broader goals as it continues to pursue its vision to accelerate the impact of sustainable mobility.
VWTB delivered Argentina’s first 100% electric truck to logistics operator Express Logística in September. The 14-ton e-Delivery truck is now in series production in Resende, Brazil. Providing a range of up to 250 kilometers, it marks an important step in the company’s ambitious electrification strategy. In addition, e-Delivery trucks are helping international brewery Ambev ensure sustainable local deliveries to its customers.
Revenue and captive financing solutions
The TRATON GROUP’s sales revenue in the New Vehicles business increased to €11.3 billion, up by 7% year-on-year. TRATON’s Vehicle Services business also proved key to the Group’s success in the first nine months of 2023, generating €2.1 billion in sales revenue.
Meanwhile, TRATON Financial Services recorded a double-digit percentage growth on the back of the expansion of its portfolio and higher interest income. Although sales revenue grew by 24% compared to the same period in 2022, it was offset by higher funding costs and lower spreads.
Navistar recently reintroduced a service in North America that provides customers with enhanced financing options for new and pre-owned vehicles through the Navistar Financial platform. The service delivers in-house financial solutions, offering customized and competitive loans, lease financing, and service packages. It harnesses global synergies within TRATON Financial Services, signifying a key advancement in consolidating comprehensive service offerings to Navistar’s US customer base.
Improved 2023 outlook
As demonstrated by these results, the TRATON GROUP continues to deliver a strong performance across its brands and businesses. The Company has a strong focus on customer needs and market trends, which allows it to master a challenging environment.
In light of the above, the TRATON GROUP has raised its forecast for the year and is targeting the upper end of its adjusted operating return on sales. This is now expected to range between 7.5 and 8.5%, updating the previous forecast of 7.0 to 8.0%. Net cash flow in the TRATON Operations business area has improved and is now forecast to be between €2.3 billion and €2.8 billion, up from €1.8 billion to €2.3 billion.