UD Trucks power on regardless

UD Trucks continues to be a solid performer in the local OEM scene, challenging the usual suspects for the lucrative top spot in the medium to heavy commercial market, making noises against the bigger trucks.

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The South African (SA) truck market has shown ongoing resilience despite recent political and economic events. However, the effect of the rating agency, Standard and Poor, and other downgrades of SA to sub-investment grade, will determine if the small growth built so far by the industry this year will remain or be eroded.

“The next few months will be critical in determining the path we as a country will follow and leadership in all spheres of business, but mostly in government will be the key,” said Gert Swanepoel, managing director of UD Trucks SA.

“As the adage goes ‘cometh the hour, cometh the man (or woman]’ will now be more relevant than ever. A consolidated road freight industry is therefore needed to drive reform and advancement in the sector, as well as in the larger economy.”

According to the latest results released by the National Association of Automobile Manufacturers of SA (Naamsa), Associated Motor Holdings (AMH) and Amalgamated Automobile Distributors (AAD), the total truck market increased by a significant 16.9% month-on-month, to record 2 618 new truck sales.

This brings the market’s year-to-date total to 6 416 new trucks for the first quarter of 2017, a 3.9% increase over the same period last year. During the first three months of the year, sales in the medium commercial vehicle segment grew by 3.3% to 1 993 units compared to the first quarter of 2016. Sales in the heavy commercial vehicle segment increased by 11.9% to 1 355 units, while the extra heavy commercial segment grew by 2.2% to 2 837 units.

Only the bus segment remained in the red with a 10.5% decline in sales, to a total of 231 new units sold so far this year. “Even amidst all the turbulence, we believe that the dust will settle and the steady slog towards growth in the truck industry will begin once more,” said Swanepoel. “We still expect the SA commercial vehicle market to grow marginally by an estimated 3% during 2017, to around 28 998 units.”

To find out more I was lucky enough to be invited to UD Truck’s Brand Day at Kyalami Race Track, for a fun-filled day of driving trucks and learning more about one of the flagship brands, under the Volvo Group umbrella.

Knowledgeable UD Trucks SA marketing director, Rory Schulz, was on hand to provide more information about the state of the trucking nation.

This UD Trucks event at Kyalami, can you tell us a bit about the inspiration behind it?

The inspiration behind this event was to let people know and reaffirm UD Trucks in SA. We also wanted to take this opportunity to boost the Quester product at this point in time so we thought it would be a good idea, since the launch in 2015, to showcase UD Trucks.

I remember a previous launch at Legends fondly, what’s been the response from the market for the Quon and the Quester trucks?

The response on Quon – of course that has been a long-established brand, we launched it in 2010 initially and then revamped it in 2012, so that’s been going along very nicely. Quester was for us at that time a newer type concept. Of course, it’s starting to find its feet now and is on its way to maturing in the market place, so we thought it’s time to reactivate its marketing, hence you being here today.

Truck sales are a big talking point, medium section up, heavies and light a little bit down. What’s the rationale behind all of that?

Of course the word is that what we’ve seen on the medium duties or the heavy commercial vehicles here in SA has been positive and that is being underpinned by a nation that needs to be fed and clothed. Those vehicles are playing that role to make sure that that takes place.

In the light duty market we are seeing a little bit of impact of a general downturn in the economy where obviously the smaller vehicles play a role in let’s call it the retail side of things, which has been a bit slow. It’s also influenced by the debt that we have in the country at the moment, so people are not spending on “nice to have’s” as perhaps they would have in the past, so that’s an indication, and if we go to the top end of the market we believe it’s very much around the slowness in mining and the slowness that we now see in construction where the market is down at the moment.

As a leader how do you plan for all these different fluctuations that are sometimes out of your control?

Over the years we’ve realised that the market does move in cycles, so one must save for a rainy day. Yes, it’s important to analyse the market and understand when these upturns and downswings take place so that one prepares properly for that. Obviously you don’t want to get caught out so we try and forecast as best as we can going forward.

Yes, there have been times – for example the Asian crises at the end of the 90’s – that caught everybody and the last financial crises also caught everybody. At this stage we are able to predict that it is coming, and we understand that we will not see a sharp rise in growth but a slower growth in the following three years.

The restructuring of the business under the larger Volvo Group umbrella, can you tell us a little bit more about that?

The new CEO for the (Volvo) Group, Martin Lundstedt, made a direct change in direction and said that he would rather have a geographical based organisation. He would prefer to have a brand focused organisation to enable each brand to stand autonomously and support their customers. He is very much on a drive to make sure that by having a brand focused organisation we can be far more customer focused and closer to our customers to provide them with what they require.

Customer service is everything in this business; how do you stay ahead of the curve in that regard?

Well that is indeed one of the challenges, it’s not just about the product, it’s about how we support the product in the country and that remains a challenging area of the business. Sometimes it goes very well, sometimes not all that well, so yes we do face challenges, but the important thing is to make sure that we provide a good quality of service. It’s important for us to provide the right level of parts and have the parts available at dealerships so that we keep vehicles on the road, and of course that remains a big challenge.

And the synergy between UD Trucks and Volvo, there must be a lot of helping out between the two brands?

Well in the past the way the organisation was structured, there were some synergies in the back offices and some of those synergies remain, but for the most part now that we’re dedicated to brand focus we need to be more independent. We need to support our customers and our customer base, from a UD perspective.

Finally, key sectors for 2017, where do you see the growth happening?

For 2017 we’re at the bottom so we’ll start seeing some growth, there will be a bit of a recovery in the mining side of things, and we will see a little bit of recovery in oil, so that will help us into countries like Angola. The construction sector; there’s still a lot of infrastructure development that needs to happen, government is trying to go back and say let’s go back to the basics and get the national development plan sorted out. Once that happens then of course those industries will start picking up again.

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