Scania’s Super Hub in China to Increase Production by 50K vehicles per year

Scania has reached a historic milestone in its 134-year history by inaugurating its new global industrial hub in Rugao, Jiangsu Province, China. The project represents one of Scania’s most ambitious international investments to date, confirming the Swedish manufacturer’s strategic focus on Asia and its intent to compete at the heart of the world’s largest commercial vehicle market.

The new Rugao site covers 800,000 square meters, includes both production and R&D facilities, and is designed for an annual capacity of 50,000 vehicles. With a total investment of €2 billion, it will employ around 3,000 people and serve both the Chinese market and selected export markets across Asia and Oceania.

By securing a fully independent production license, the first ever granted to a Western truck manufacturer in China, Scania gains full ownership and operational control of its Chinese operations. This allows the company to integrate the Rugao site into its TRATON Modular System (TMS) and align it with global production standards across its plants in Södertälje (Sweden) and São Bernardo do Campo (Brazil).

A New Industrial Capability

Scania’s Rugao facility has been designed as a model of advanced, sustainable manufacturing. Built on principles of flexibility and energy efficiency, it combines truck assembly with localized production of engines, axles, and gearboxes. The plant’s design is modular, allowing multiple configurations and fast adaptation to market trends — including combustion, hybrid, and electric drivetrains.

The site integrates cutting-edge automation, digital quality management, and AI-based logistics coordination to optimize flow and minimize idle time. As part of Scania’s sustainability strategy, almost all operations will be powered by renewable energy, including locally sourced biogas and certified green electricity. Water recycling, waste minimization, and energy recovery are also embedded into the plant’s design, supporting Scania’s Scope 1 and 2 decarbonization goals.

“Sustainability is built into every part of our new factory in Rugao — from energy sourcing to waste management,”

said Ruthger de Vries, President of Scania Industrial Operations Asia.

“This is not just about producing trucks; it’s about setting a new benchmark for efficient and sustainable industrial operations.”

Dual Product Strategy: Global Scania and NEXT ERA

The Rugao hub introduces a dual-market offering tailored for both global and local demand.

• Scania Global Line — Trucks built to Scania’s worldwide specifications, including tractors and rigids for premium, high-performance applications. Fully compatible with Scania’s digital services ecosystem and aftersales network.
• NEXT ERA Range — A new product family developed specifically for China’s competitive long-haul and volume transport sectors. Based on the TRATON Modular System, but optimized for local cost structures and digital integration.

Deliveries from Rugao are expected to begin in late 2025, while the NEXT ERA range is scheduled to launch during the first half of 2026.

“Our establishment in Rugao is more than a factory,” said Christian Levin, President and CEO of Scania and TRATON Group.

“It will be part of China’s dynamic innovation landscape and will fuel Scania’s own development. By producing and innovating locally, we can tap into China’s speed and creativity, strengthen our global capabilities, and accelerate the shift toward sustainable transport.”

Strategic Positioning: At the Center of the World’s Largest Truck Market

Scania has been present in the Chinese market for more than 60 years, but the opening of Rugao marks its most comprehensive localization effort so far. The company is now positioned within a country that accounts for more than 40% of global heavy-truck sales, driven by its vast logistics and construction industries.

However, the move comes amid a period of structural change. China’s heavy-duty truck market has experienced moderation in demand, with total sales dropping from post-pandemic peaks, and growing pressure from overcapacity and price competition among domestic OEMs such as FAW Jiefang, Dongfeng, and Sinotruk.

Despite this, China remains a critical innovation center for connected, autonomous, and electric transport — fields where Scania and TRATON are intensifying their focus. The Rugao facility will host both manufacturing and research & development functions, linking closely with Scania’s existing Shanghai R&D center. Local R&D will focus on battery systems, connectivity, and modular electrification platforms that could later feed back into Scania’s global product pipeline.

Export Strategy: Bridging Asia with Global Production

Rugao’s location, close to the Yangtze River Delta industrial corridor, provides logistical access to major Chinese ports and export routes to Southeast Asia, India, and Oceania. Scania plans for roughly half of all units produced in Rugao to be exported, diversifying its market exposure.

This export capability also enhances Scania’s flexibility in the face of changing trade policies. By producing in China, the company can reduce shipping times and costs for regional markets and avoid import tariffs that can affect European-built trucks.

“Building in China allows us to be closer to our customers in Asia and improve delivery speed dramatically,” noted de Vries. “In some cases, lead times will be reduced from months to weeks.”

Scania and TRATON Amid Market Volatility

The Rugao plant also aligns with Scania’s broader effort to balance its production footprint across continents. The company’s two other main hubs in Sweden and Brazil serve Europe, Latin America, and parts of Africa. The new Chinese facility now completes Scania’s triangular global production network, giving TRATON Group a better hedge against regional fluctuations and logistics costs.

The move comes as the global truck market faces uncertainty. According to TRATON’s latest market outlook, European demand is expected to soften slightly in 2025, while Asia remains the primary growth region for heavy trucks. Rugao enhances Scania’s competitiveness in Asia’s expanding logistics and infrastructure sectors.

Rugao is also central to Scania’s next-generation product strategy, which combines modular design, electrification, and digital fleet services under the TRATON Modular System (TMS). The system allows shared platforms across TRATON brands — Scania, MAN, Navistar, and Volkswagen Truck & Bus — while maintaining brand-specific customization.

Sustainability and Digital Manufacturing

Scania’s Rugao site is built as a climate-neutral factory, intended to serve as a model for future facilities worldwide:

• Powered primarily by renewable biogas and certified green electricity.
• Energy recovery systems feed excess heat back into local networks.
• AI-based predictive maintenance and digital twins monitor production efficiency in real time.
• Waste management follows a zero-landfill principle with material reuse wherever possible.

These sustainability measures align with Scania’s goal of achieving net-zero emissions across its value chain by 2040.

A Very Competitive Market

Scania’s entry into local production places it among a select group of Western heavy-truck makers with a direct industrial presence in China. Competitors such as Volvo Trucks, Mercedes-Benz Trucks, and MAN operate via joint ventures or limited assembly lines, while Scania now gains a unique advantage through full ownership.

Still, the Chinese truck market remains challenging. Domestic OEMs are expanding aggressively in electric heavy trucks, supported by government subsidies and local pilot programs. Scania’s strategy relies on premium performance, efficiency, and reliability — factors that appeal to logistics fleets focused on total cost of ownership rather than initial purchase price.

A Factory Beyond Production

Inaugurational event with a video about the facility construction

The inauguration of Scania’s Rugao industrial hub represents more than an expansion of manufacturing capacity — it’s a statement of confidence in China’s innovation ecosystem and its central role in global logistics transformation.

By combining modular production, sustainability leadership, and regional integration, Scania positions itself not just to build trucks in China, but to co-develop the next generation of heavy transport solutions with it.

The first trucks from Rugao are expected to roll off the line by the end of 2025, with the dedicated NEXT ERA range entering the market in 2026.

“This milestone marks a new era for Scania,” said Christian Levin. “Rugao is not simply a plant — it’s a hub for innovation, collaboration, and the shift toward sustainable transport in Asia.”