Scania sees all-time financial loss in South America

Truck maker Scania AB is facing its worst financial loss in its 44-year history in Brazil. Arne Carlsson, president of Scania Latin America, says the company was more than $45 million in the red for the first nine months.

The losses, he says, stem from the energy crisis in Brazil; the economic crisis in Argentina; the reduction of economic activity in Asia and Europe; the terrorist attacks in the U.S. and its slowing effect on the global economy, plus high costs and low-demand for its product.

Brazil is considered the best market for trucks, buses and engines and is being analyzed very closely by the world board of Scania.

The general director of Scania do Brasil, Flavio Mermejo, says the same truck in Brazil that costs $40,000 is sold in Europe at an average of $65,000, before taxes and sales commission.

“This difference means that the financial performance of Scania does not reflect all our sales first,” Mermejo says.

Eriodes Battistella, president of the Scania dealers association, says that loss is a common term among the dealers. “We have been operating in the red for five years,” he says.

“While we are competing with Mercedes-Benz (DaimlerChrysler AG) and Volkswagen (AG), it will be difficult to increase our sticker prices,” says Battistella.