Babcock, sole importer and distributor of DAF trucks in Southern Africa, has established Babcock Financial Services (BFS), with the purpose of providing finance solutions for DAF truck buyers.
Babcock Africa Transport Solutions CEO Wilna Steyn believes this move will boost sales of the Dutch brand in South Africa.
The new in-house finance company, fully owned by Babcock Africa, replaces joint venture finance schemes between Babcock and a number of finance houses.
Steyn says it has become clear that DAF customers in South Africa require a one-stop solution in terms of parts, trucks, servicing and finance.
She notes, however, that BFS does not provide insurance.
Every finance deal does include a compulsory repair and maintenance contract, though.
Steyn explains that Babcock harbours ambitions finance institutions have been unable to accommodate. She says banks want “to offer finance capital at the lowest risk”, while Babcock wants to support its customers and grow the brand in South Africa.
If a customer qualified, BFS will, for example, be able to provide payment-free periods, competitive interest rates and balloon payments, while it can also tailor repayment terms and deposits required to individual needs.
Steyn emphasises, however, that BFS knows it “has to act sensibly”.
BFS is funded by Babcock Africa and the local market, and has sufficient finance to cover more than a year’s worth of DAF sales, with this figure set to increase steadily.
DAF sales in South Africa are forecast to reach around 300 units in 2014.
This is close enough to a sustainable number for Babcock to mull the establishment of a DAF assembly plant in South Africa, confirms Steyn.
She says it is Babcock’s intention to start local assembly, but that timing and volumes are of importance.
The current DAF parc in South Africa is between 1 500 units and 2 000 units.
Babcok acquired the rights to distribute the brand four years ago and, last month, signed another five-year distribution deal.
DAF South Africa employs around 70 people.