New Scania HGV's have 'electrifying' results
For my final blog post in this series, I have chosen the company Scania, as an example of a brand who is currently future proofing their business by meeting future challenges, and how they are going to meet audiences’ expectations, through their development of electric commercial vehicles.
So, who are Scania? On their website, the brand states that it “is a world leading provider of transport solutions with 54,000 employees in more than 100 countries.” They go on to say, “together with our partners and customers we are driving the shift towards a sustainable transport system” (Scania 2022).
This sustainable transport system involves creating all new 100% battery electric Heavy Goods Vehicle’s (HGV’s), which are set to pave the way into providing clean and economical daily performance for there customers. This makes for a more viable option for haulage companies to become ‘green’ and change from the norm to meet the demands of reducing their carbon footprint (Evening Standard 2022).
Recently with a big shift in the automotive industry towards electrification, it has become apparent that the change for HGV’s is behind in becoming more environmentally friendly. To electrify all the heavy vehicle market will be a challenge, especially with a target now agreed by governmental and country leaders, such as the Paris Agreement set in 2015 (Electrical Review 2021).
With a focus on a zero-emission future, Scania have set the way, by launching and operating their HGV’s not only inside London and other cities across the world but also making them able to travel further beyond city limits. This is due to an improved charging capability and an increase in range (Evening Standard 2022).
How does Scania look operating within a PESTLE analysis?
Political
Some political factors for Scania to think about, first involve potential governmental changes either in the Uk or throughout other global countries where Scania operate. Dependant on what the change is it could be seen as either a threat or an opportunity to improve their business.
Since Covid-19 and Brexit, there has been a considerable decline and shortage of HGV drivers. The momentum for this started due to travel restrictions imposed by governments becoming too strict for non-UK drivers travelling in and out of the country, as a result most drivers went back to their home country and have not returned since.
Economic
A few economic factors for Scania to think about could start with the cost-of-living crisis currently. With more businesses struggling, there could be less of a desire to purchase a more expensive electrified vehicle in today’s climate. However, if a business can afford to make a change, going electric will help with the increase in fuel cost increases and therefore counter the cost effective the adjustment will be.
Socio-cultural
With the world more connected on important issues through social media, there has been a change in consumers purchasing power for the better. However, being environmentally friendly now, has increased in trend and therefore people would rather put their money towards a new bike, getting public transport of travelling by foot, to reduce their enviromental impact on the planet (Shaw n.d.).
Social media can also work in Scania’s favour by increasing their brand perception and how customers interact with news of improvements of their products.
An aging work force with less willing young people to take up the mantle of becoming a qualified HGV driver. It is recorded that the average age of a HGV driver is 55, with less than 1% under the age of 25 (ONS 2021). As part of this, government have also agreed that a lack of diversity is a part of the problem.
Technological
Technological considerations involve industry developments with innovation. Scania are already showing innovation by releasing a fleet of electric HGVs, however, there can always be improvements in design, how efficient their batteries are and charging solutions to allow for faster changing on the road.
Legal
With some HGV drivers operating as their own limited company however, still working like one of their employees, drivers will see a change in the off payroll working rules (IR35) (Gov.uk 2021) This IR35 change means that “some drivers may have experienced a tax increase as a result (Pocock 2021).
As a forward-thinking brand, being environmentally friendly will always be in the forefront of Scania’s mind. As the brand which trades globally, Scania has a responsibility to change the effect their company has on the environment, by implementing low carbon solutions. To enforce this The Paris Agreement was adopted and came into force in 2016, with an aim to limit global warming to below 2 degrees Celsius. “The Paris Agreement Is a legally binding international treaty on climate change” (UNFCCC 2022).
Environmental
In line with new laws, it is important for Scania to continue building and developing technology to stay a leader of innovation within the auto motive industry. Producing more environmentally friendly options going forward, whilst being consistent with the brands marketing and communications will allow for a more authentic perception for their clients.
Critique
With Long haul journeys playing such an important role of a HGV’s function, a typical lorry is a heavy pollutant with a size 14 of a carbon footprint. With constant long journeys it is in the delivery companies’ objective to reduce their own carbon footprint through their fleet emissions.
What is Scania doing well? For a start, leading the industry in development of electrifying their HGV’s is a humungous achievement. Not only are Scania offering electrical HGV to their clients, but they understand there is likely to be some anxiety in making such a change to a business. For this reason, Scania have developed a ‘turnkey’ solution to offer a tailored service to take away such a burden from their clients.
This turnkey solution involves Scania offering advice and delivering on fitting the clients transport, business, finance, and any future needs, by doing this Scania are successfully promoting and supporting for a long-term sustainable future.
Scania are predicted to already be “firmly in control on the decarbonised road ahead” (Evening Standard 2022), to continue this leadership in the race to vehicle electrification, it is important to follow industry trends and changes in technological advancements whilst attempting to stay ahead of its competitors who are hot on their heels, like Volvo and Mercedes.
For a brand who promotes itself on sustainable transport, one of the factors I believe Scania could improve on is social media presence and posting more about what the brand is doing towards their goal leading up to 2030, to lower emissions and meet the demands of The Paris agreement.
During my PESTLE analysis, as part of the socio-cultural section, I found evidence that showed a decline in workforce of HGV drivers. A recent study showed that 32% of people aged 16 to 24, and 44% of 25 to 34 year olds reported that they felt worried about climate change (see Appendix A for data) (ONS 2021).
With this information, I would recommend that Scania could do more to appeal to younger adult audience and perhaps older teens and therefore could increase the level of HGV driver interest. This could be done through a social media campaign targeting those specific ages whilst collaborating with a variety of businesses who Scania supply across the world. There is currently only one of Scania’s regions verified on TikTok currently with no main account, perhaps to appeal to a younger audience, this is where to start.
Finally, do I think this is a good example of brand future proofing? Yes, I completely believe Scania are heading in the right direction, now having moved from alternative fuel options to reducing their carbon footprint and becoming a leader as an ethical and sustainable brand.