The 800,000-square-metre hub in Rugao represents more than a major investment. It marks a shift in how China is opening its automotive sector to foreign manufacturers and positions Scania to serve both domestic customers and export markets across Asia. The plant will operate almost entirely on renewable energy.
The inauguration of Scania’s third global industrial hub in Rugao, Jiangsu Province, marks a key moment in the commercial vehicle industry. While foreign automakers have long been present in China, they have typically been required to form joint ventures with local partners. Scania’s full production licence breaks from that model entirely.
The facility, spanning an area equivalent to more than 100 football pitches, has been licensed to produce up to 50,000 vehicles annually. This capacity allows Scania to compete directly in China’s high-volume truck market while maintaining complete operational control — an advantage Western competitors have not previously enjoyed.
The investment is expected to create around 3,000 local jobs, contributing to economic development in the Jiangsu Province region.
Photo credits @ Scania
Green manufacturing from day one
Environmental sustainability is central to operations at the Rugao site. The plant will run almost entirely on renewable energy sources, including locally produced biogas and certified green electricity. These measures directly support Scania’s Scope 1 and 2 decarbonisation targets, making the facility one of the company’s most environmentally efficient production sites worldwide.
For a heavy industry operation of this scale, operating predominantly on renewables represents both a technical and logistical achievement. It also sets a benchmark for automotive manufacturing in China, where environmental standards are advancing rapidly.
The TRATON advantage
Scania’s new plant is integrated into the TRATON Modular System — a platform-sharing approach that allows the company to adapt products and technologies for regional markets while maintaining manufacturing efficiency. This modular strategy enables Scania to balance global standardisation with local customisation, an essential capability for operating in China’s distinct commercial vehicle sector.
The company plans to produce its established global truck range at Rugao while also developing models specifically tailored to Chinese market requirements. This dual approach enables Scania to serve premium segments with its proven European designs while addressing high-volume segments through locally optimised products.
Introducing NEXT ERA
As part of its local strategy, Scania will launch a new tractor series called NEXT ERA, designed specifically for China’s long-haul trucking market. Scheduled for introduction in the first half of 2026, NEXT ERA will target the country’s high-volume segment, one of the largest commercial vehicle markets globally.
Photo credits @ Scania
The decision to develop a dedicated range for China underlines Scania’s recognition that success in this market requires more than adapting existing models. Chinese logistics operators often prioritise different factors — including price, operating costs, and service network coverage — than their European counterparts.
By developing NEXT ERA from the ground up, Scania aims to compete with established domestic manufacturers while maintaining the performance and quality associated with its global brand.
Export ambitions
While China’s domestic market represents a major opportunity, Scania also plans to use Rugao as an export base for selected markets across Asia and beyond. This strategy takes advantage of China’s competitive manufacturing costs and logistics infrastructure to reach regions where European-made trucks may be less accessible.
For Asian markets that have traditionally been underserved by European truck manufacturers, production in China could make Scania’s technology more affordable while retaining its recognised quality standards.
When production begins
Deliveries from the new Rugao facility are scheduled to start in late 2025, with the NEXT ERA model line to follow in early 2026 once initial operations are established.
This timing positions Scania to enter China’s market as its logistics sector undergoes rapid modernisation, driven by demands for efficiency, lower emissions, and reduced total cost of ownership — areas in which Scania’s engineering strengths could prove advantageous.
What it means for the industry
Scania’s success in securing a full production licence raises questions about whether other Western truck manufacturers might receive similar approval in the future. If this move reflects a broader policy shift, it could alter the competitive landscape in China’s commercial vehicle industry.
For now, Scania stands alone among Western truckmakers in holding this privilege. Combined with the scale of investment and its dual product strategy, the development positions the company to establish a strong foothold in a market that has remained largely closed to direct Western participation.
The Rugao facility represents not only industrial expansion but also a strategic commitment to China’s evolving transport sector — a move that underscores Scania’s confidence in both the market’s potential and its own long-term competitiveness.
