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Aug 24, 2007

Record growth for truck, bus company

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Original transport equipment manufacturing company MAN Truck & Bus is currently experiencing an unprecedented growth rate, locally and in an international context.

MAN management board member for marketing Dave van Graan says that the company is operating in an industry which is currently going through its fifth year of growth, where the growth rate is exceeding 20% on a year-on-year basis.

MAN attributes this growth to five factors. Firstly, the government’s macroeconomic policy is seen as really trying to drive general economic growth, and this means economic growth for most industry sectors. Secondly, transport is a derived market need, meaning that as consumer demand grows, goods need to be delivered to the retail areas and trucks are needed for that purpose. Thirdly, because of the infrastrucure boom, building material and other infrastructural material need to be transported to building sites.

Van Graan says that the com-modities markets also play a big role. Export commodities need to be delivered to the harbours and local commodities, such as coal, need to be transported from the mines to the power stations. To a lesser extent, transport and logistics companies have become more professional, meaning that their replacement policies have improved.

“This means that transportation fleets get replaced every three to six years, as opposed to the previous replacement plan of every five to ten years,” he explains.

MAN currently owns a 35% to 50% share of the local bus market. Van Graan says that this is due to the one-stop bus solution offered by the company. He explains that the company is the only original-equipment manu-factuer in South Africa to wholly manufacture the chassis, and coachwork (body) components of a complete bus.

“There is a definite advantage to supplying the body and the chassis from one company, and having your own factories to assemble the parts means that the company can customise its products to meet varying customer demand,” he says.

The company is constantly develop- ing its Trucknology product range. Van Graan says that the Trucknology product means that MAN trucks have the latest common-rail diesel engines, automated-shift gearboxes, ABS braking systems and electronically controlled suspensions, making them safer, reliable and more durable. Consequently, this translates into better economy. The technology was sourced from MAN’s plants in Germany and Austria.

Ninety per cent of MAN’s bus chassis are imported from Germany, meaning that 10% of the chassis com- ponents are sourced locally, but are also 100% refined and adapted in South Africa to adhere to local speci- fications and operating conditions. Van Graan says that the company is currently enjoying the benefits of a buoyant bus and truck industry.

“With the huge growth in the volumes of vehicle sales, MAN has to develop a strategy where it will have not only the infrastructure, but also the necessary people to cope with the demand. “Capacity expansion is a big issue, because MAN has to make sure that it has sufficient capacity in its factories, which assemble the base vehicles, and also in its dealer network, which supports the vehicles through parts and service supply,” he points out.

Van Graan says that to deliver on its customer promises, MAN needs to constantly develop its IT-systems and strive to apply ‘best practice’ business processes.

The company is positive about current local economic conditions and has expanded into the north-eastern and north-western areas of the African continent. Van Graan says that countries such as Angola, Zambia and Kenya are exciting prospective markets, and that MAN has established a dealership footprint in those countries to ensure that after-sales support is in place prior to selling vehicles into those territories. He says investments and strategies are currently under way to further expand this support base in the 15 Southern African countries looked after by the South African office.

“Locally, government policy is very encouraging. For MAN, as a manufacturer, it is encouraging that government is looking at a sustainable public transport system, with strategic thinking going into various intermodal transport models. “As the company moves to provide better public transport, it is also an opportunity to supply trucks for the infrastructure development required to support such a system. “As it is, MAN sees this growth continuing until 2014, even through at a slightly slower rate than we have experienced in the last five years” Van Graan comments.

He says that one of MAN’s most successful projects was the launch of the company’s Trucknology range of products, which include the TG FOC, TGA, TGM and TGL models.

“At first, there was a question whether the vehicles were not too sophisticated for local conditions, but after the vehicles had been developed overseas, they were tested in South Africa for an intensive three-year period, prior to the local launch. “Small adjustments were made to the systems to adapt to local conditions, giving the customer the benefit of 100% Trucknology. “The customer gets a real optimisation of reliability when electronic control is coupled with the mechanics of the vehicles,” Van Graan comments.

MAN plans to sell about 2 600 Truck-nology products to the local market this year. Van Graan says that the vehicles are better equipped to deal with local conditions and keep operating costs lower, because they are more fuel efficient.

MAN Automotive is a holding company in South Africa and contains two divisions, namely MAN Truck & Bus and MAN Bus & Coach. The two divisions employ about 1 000 people. Two manufacturing plants assemble the truck and bus components for MAN in South Africa. The Pinetown plant assembles the vehicle chassis, while the bodies are manufactured at the Olifantsfontein plant. The company also owns eight dealerships, with 35 dealerships belonging to independent shareholders. MAN Automotive had a turnover of R2,6-billion in 2006 and produced and sold about 2 500 trucks and buses.

MAN is also involved in social responsibility projects throughout South Africa. The company embarked on a programme in which it will invest €1-million over the next three years into the Southern African industry in support of its corporate social investment strategy. Projects supported will include education programmes to train technical, engineering and supporting staff, education support of street children and a variety of driver training programmes aimed at enhancing skills of professional drivers.

The company has also embarked on a programme to provide shelter and education for street childern.

Edited by: Laura Tyrer
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