Scania Finance: in it for the long haul

Despite the numerous pressures exerted on the transport segment by the Covid-19 pandemic, Scania Finance South Africa has exceeded expectations, finishing 2020 ranked first globally with Scania Financial Services for truck penetration and second for most-improved business unit. ROWAN WATT-PRINGLE talks to Scania Finance Southern and Eastern Africa managing director, Patrik Glas Crommert, about the company’s ongoing success.

The transport sector has had to evolve over the last year, finding ways to offset financial restraints while trying to maximise operational efficiency and fleet performance. Glas Crommert says that, due to the uncertainty in the economic landscape, most customers have opted to replace rather than expand existing fleets, or to postpone investment decisions. Replacement cycles have also been extended, with all of these factors resulting in negative impacts on the total 2020 market size.

Despite this, Scania Finance enjoyed a solid year, continuing into January. “Even though all our markets fell sharply, we managed to improve our finance penetration levels for trucks, buses and used vehicles, while our financial results, bad debts and overdue ratios also exceeded expectations. We have every reason to be happy with our performance,” says Glas Crommert.

This year has started in the same fashion – albeit that relatively low volumes reflect the usual January pace of the regional market. “We are cautiously optimistic; the market seems to have recovered somewhat and our order book and pipeline look encouraging,” he reports, highlighting a positive mindset as the main driver of this success.

“We always strive for a solutions-oriented approach, even when it might be easier to decline an application. We’re here to support our customers and the growth of the Scania brand in any way we can, in every transaction, whether through our own books or via one of our deal facilitator partners,” he explains. “I am convinced that what we can offer our customers, in close collaboration with our commercial organisation, is next to none. This is central to our aim of achieving as close to 100% market penetration as possible through a responsible volume strategy.”

Central to this is Scania Finance’s commitment to customer support, which Glas Crommert highlights as being essential in both good times and bad. “When Covid-19 hit us this time last year, we immediately engaged in discussions with our customers to find ways to assist them with their cash flow constraints,” he says, adding that at one point, almost 70% of Scania Finance’s portfolio was under restructuring: “Most of our bus portfolio has been through two or three types of debt rescheduling. We will always try to help wherever possible, even though our risk exposure sometimes increases as a consequence. We win and lose together!”

Scania Finance has provided various types of payment relief to help customers through these challenging times, including interest-only structures, partial payments and a combination of capital and interest holidays. New products have also been introduced, such as the long-term rental solution, aimed at optimising operational and administrative costs. The fully bundled solution includes finance, insurance, repairs and maintenance and fleet management solutions at an attractive price, with very low asset risk and minimal administration requirements. “The ambition is to give operators a solution to grab growth opportunities without digging deep for big deposits while cash flow is under pressure,” says Glas Crommert.

As the industry looks ahead, Glas Crommert believes that there are reasons for optimism. “There are already some early signs of market recovery, albeit from a relatively low level. Whatever happens, we are in it for the long haul and will continue to support our customers wherever possible, via a close dialogue to understand how we can best help them through this temporary glitch,” he says.