The collaboration between TRATON GROUP brands as well as in global alliances doesn’t just enable us to amortize development costs more quickly, it also means we can succeed as a team. An interview with CEO Andreas Renschler and Christian Levin, Chief Operating Officer responsible for implementing the strategy in Research and Development, Purchasing, Product Planning, Alliance Management, and Production Network.
Before we discuss innovation at TRATON: which innovation has had the greatest impact on your lives personally?
Andreas Renschler: When I was setting up a plant in Alabama in the early 1990s, I was frequently traveling between Germany and the US. There were, of course, no smartphones back then. Getting my first mobile phone that worked in both countries was life-changing for me.
Christian Levin: For me, it is the connectivity of all things. My coffee machine is connected, and so is the door to my house – that’s how I get a message letting me know my kids got home. It would be really hard to not have that in my life.
What role does innovation play in the transportation industry?
AR: Our main aim is to create innovations that provide a benefit to our customers. It wouldn’t make much sense to build commercial vehicles that can drive on the moon – given that our customers aren’t there. Our approach is not to look at what is technically feasible at first; rather, together with our customers, we define what is needed to improve transportation efficiency.
CL: Our developers are then responsible for translating these customer requirements into solutions that are profitable for our customers and for TRATON. We see this as a structured process where our customers’ feedback is continuously integrated. We ensure that all employees involved in this process understand our customers’ needs. Only then can they work independently.
60%of the total value of a heavy-duty truck is attributable to the drive system.
AR: Each and every one of us knows that supporting our customers to operate profitably will also enable us to make a profit. Digitalization benefits freight forwarders because it enables them to optimize the deployment of their fleets. These companies want to know where their vehicles are or how they can better plan their maintenance.
CL: That’s exactly what sets us apart from the passenger car industry, which has more in common with consumer electronics or fashion. By contrast, our customers are interested in their return on investment. We’re talking about companies that are constantly asking: maybe there is an even more profitable way of doing that?
“Today’s young professionals want to work for companies that take sustainability seriously.”Christian Levin
COO, TRATON GROUP
In addition to the customer requirements, there’s now another driver of innovation, namely society’s push for lower CO2 emissions.
CL: We don’t see that as only society pushing us, but rather as something we want to accomplish ourselves. For one, lower fuel consumption helps our customers improve profitability. And secondly, setting ourselves this goal allows us to attract the best employees. Today’s young professionals want to work for companies that take sustainability seriously.
AR: Besides, sustainability means more than just reducing CO2 emissions. We are seeing dramatic growth in freight transportation, due partly to changing consumer behavior. People are having everything delivered to their homes these days. It is our job to make this growth sustainable. And please don’t forget, CO2 emissions are correlated with fuel consumption and thus with operating costs. Every single percent of reduced fuel consumption translates into real customer benefits.
CL: It is crucial that we don’t rely on just one technology, as it’s not clear yet which solution provides the greatest customer benefits. That’s why we are putting our development efforts into battery-electric vehicles, hybrid drive systems, and alternative fuels all at the same time.
Some of our customers are very interested in alternative drive systems, including public transportation companies in some large cities who can no longer use fossil fuels. This is where it gets tricky, as an electric fleet of buses also needs the right charging infrastructure. And it really only makes sense to go down that road when the energy comes from renewable sources. As a vehicle manufacturer, that’s not something we can tackle alone, which is why partnerships are becoming all the more important.
Having evolved from several brands, the TRATON GROUP can more easily fund new technologies. Are all players really working toward a common goal?
AR: Innovation doesn’t occur in a vacuum. Engineers quickly realize that the range of new technologies cannot be implemented with one brand’s budget. That’s why cross-brand development partnerships are crucial for our success.
CL: When we consistently avoid duplication of effort, we progress much more quickly, and can offer better solutions at lower unit costs. That’s why we are working on a modularized production system for all TRATON GROUP brands – mind you, for components and not for vehicles. Our aim is not to build identical vehicles, but to provide a selection of common components that can be installed in any vehicle with standardized interfaces.
Aren’t the different cultures MAN and Scania brought to the TRATON GROUP a handicap in that progress?
AR: My experience with that has been the opposite. No one can stop a team in which people, both men and women, from different regions of the world, and with different abilities and experiences, work together as equal partners. What is important is having a clear goal and a corporate culture of pluralism where each individual can make their voice heard.
CL: It all comes down to trust – the trust that a coworker in another country will work on a project with the same drive as the coworker sitting next to me. We gain this trust through transparency. And we keep it by delivering what we promised. Of course, there will be friction; but friction is inevitable when striving to find the best solution as a team.
“Our main aim is to create innovations that provide a benefit to our customers.”Andreas Renschler
CEO, TRATON GROUP
Digitalization brings a new culture to the transportation industry. Is the TRATON GROUP a suitable employer for digital natives?
CL: Absolutely! A huge portion of development resources is already spent on electronics and software, rapidly approaching 50% in the coming years. What I hear from our younger software developers is that “what we are achieving here is tangible. The product we are working on in our team makes a difference in people’s lives.”
AR: Tomorrow’s entire logistics chain from production through to the end customer will be networked. If we look into the distant future, we see autonomous driving changing the entire transportation industry. We are already preparing ourselves for this change, already offering the first autonomous vehicles for isolated applications, such as in mines. Quite exciting things to work on, don’t you think?
What role do your partners in the United States, China, and Japan play in your innovation strategy?
AR: It is still impossible today to sell a European commercial vehicle in Japan or the US – and vice versa. However, if we talk about the drive system, which accounts for up to 60% of the total value of a heavy-duty truck, then the situation looks quite different. This is where we can share the high development costs with our partners. In saying that, we have decided against acquiring companies completely, because integrating a company takes time – and there is no guarantee of success. Our approach is different in that we build alliances, work together, and mutually benefit as a result.
CL: Within these alliances, we systematically identify each area where collaboration is profitable for both sides – whether that is the drive system, in procurement of components, or software development. This way, we can realize the same synergies as through acquisitions.
AR: … and probably even more quickly!