Scania to start making trucks in China after the acquisition

Swedish truck maker Scania, a unit under Volkswagen AG’s commercial vehicle arm Traton SE, has bought a truck company in China to start making automobiles for the first time in the world’s biggest auto market, it informed Reuters.

Scania acquired Nantong Gaokai based in China’s eastern city of Rugao, revealed an official filing. The acquisition permits it to obtain a truck manufacturing license in China. The move comes after Scania said it would invest in a battery assembly plant located in Sweden as it finds out future technologies.

Scania’s spokesman refused to comment on the time it will take to finish the manufacturing set-up, the planned capacity, or the models it prepares to produce.

Nantong Gaokai was previously a unit under the state-owned Jiangsu Gaokai Investment Development Group.

Jiangsu Gaokai has not replied to a request for comment.

Overall truck sales in China increased 24% from January through October to 3.87 million vehicles, driven by government investment in infrastructure and as buyers upgraded to adhere to tougher emissions rules.

Meanwhile, Chinese officials have been drafting new regulations to make trucks cleaner, smarter, and safer.

The market is largely dominated by regional automakers including FAW Jiefang Group, Dongfeng Motor Group, and Sinotruk Hong Kong Ltd, which provide more price-competitive vehicles.

All Scania trucks sold in China are imported and priced remarkably higher than those of domestic competitors.

International truck makers including MAN SE and Volvo trucks have engine partnerships with Chinese firms.