Hino has embarked on a strategy to become the number one truck brand in South Africa by 2020, says Hino South Africa (SA) VP Ernie Trautmann.

Hino is currently placed third in the market, trailing Mercedes-Benz and Isuzu Truck.

Trautmann says Hino sales have jumped 17.6% in the first six months of the year to reach 1 944 units, compared with the 1 653 unit sales recorded in the first half of 2014.

However, this growth is not entirely what it seems. Trautmann attributes the lower sales in 2014 to Hino SA’s move to its new factory in Prospecton, near Durban, at the beginning of 2014. This resulted in a stock shortage as the plant ramped up to the required production levels.

The new factory is fully operational and has a single-shift capacity of 5 000 units a year.

Trautmann is confident of selling about 2 200 units in the second half of 2015, to lift the Japanese brand’s yearly sales to more than 4 000 units for the first time in the company’s history.

Hino SA is currently ranked ninth among countries outside Japan in terms of Hino sales for the first six months of 2015.

The countries ahead of the local operation are Indonesia, Thailand, the US, Vietnam, Taiwan, Malaysia, Australia and Ecuador.

Trautmann is more positive than most market commentators when pushed to forecast the outcome of the 2015 market.

He says Hino SA expects the market to reach around 31 000 units in 2015, which is slightly below the 2014 figure.

Some other truck companies expect a 5% drop in the market.

Although sales in the domestic market are projected to be better in the second half of the year than in the first six months, a possible stock build-up towards the end of the year will increase competition in an already tough market, adds Trautmann.

He says the current electricity shortage is a major challenge for the truck industry.

Load-shedding has a negative effect on truck and bus bodybuilders, with the Hino plant management having to “balance the energy situation very carefully”.

New Models
Hino SA expects the arrival of new models between now and 2020 to boost the brand’s sales in South Africa, hopefully to that coveted number one position.

The first new arrival will be a new 500 Series, followed by a new 700 Series extra-heavy truck.

A local evaluation of the long-distance transport industry by Yoshihiko Watanabe, the 700 Series chief engineer from Hino Japan, included a drive from Johannesburg to Durban, stopping at all the truck stops, as well as monitoring all the extra-heavy trucks moving in the opposite direction. (The total was 1 221 trucks.)

Hino SA expects to sell more than 500 extra-heavy trucks in 2015, with plans to grow this number by an incremental 100 units a year, until the arrival of the new 700 Series model.

Trautmann says Hino SA will not enter the local coach market, despite the fact that Hino is a supplier of luxury buses in the Japanese domestic market.

“The local bus market is comparatively small and does not warrant the significant investment to assemble and sell Hino buses here. However, Hino is a major player in the conversion of truck chassis to buses, and last year we sold about 800 of these units, mainly of the commuter type.”

Another project expected to contribute to Hino’s sales growth is the future appointment of a dedicated person to handle Hino truck financing at Toyota Financial Services.

This financing facility accounts for 20% of Hino sales through the dealer network.

The financial services tie-up will also facilitate buy-backs, which should boost sales further.

Hino SA is also looking at establishing a Hino used tuck operation in conjunction with its dealers within the next two to three years.

However, there is one problem – collecting used Hino stock, says Trautmann.

“Fleet operators often sell these units themselves instead of trading them in.”

Hino SA’s Vision 2020 requires major focus on further strengthening the dealer network, without adding any new outlets besides the recently appointed Beaufort West and Cradock facilities that offer parts and service support, adds Trautmann.

There are 65 dealers currently, of which 21 are exclusive truck dealers, while the others also offer Toyota passenger cars and bakkies.

Another major driver in Vision 2020 is the Hino Total Support programme, launched in South Africa last year.

This consists of having the right-fit products, top-line after-sales backup and a focus on customer-orientated activities.

Hino Total Support saw a staff restructuring at the head office in Sandton, as well as at the regional offices, while an effort is under way to further improve parts supply, already running at an average of 96% availability over the past six months.

Parts pricing competiveness is also being improved and the prices on a number of strategic parts have been repositioned.

“Welcome To” and “Welcome Back” sales programmes have been instituted with dealers and, to date, 360 new buyers of Hino trucks and 46 customers who have not bought a Hino in the past five years have been involved in this project.

“We realise that our Vision 2020 is a huge challenge, but we believe the programmes in place, as well as the new ones we are developing, will ensure we reach our objective in the five-year time span,” says Trautmann.