Photo by: Reuters
Babcock, sole importer and distributor of DAF trucks in Southern Africa, on Thursday announced that it had established Babcock Financial Services (BFS), with the purpose of providing finance solutions to DAF truck buyers.
Babcock Africa Transport Solutions CEO Wilna Steyn believed this move would boost sales of the Dutch brand in South Africa.
The new in-house finance company, fully owned by Babcock Africa, replaced joint venture finance schemes between Babcock and a number of finance houses.
Steyn said it had become clear that DAF customers in South Africa required a one-stop solution in terms of parts, trucks, servicing and finance.
She noted, however, that BFS did not provide insurance.
Every finance deal did include a compulsory repair and maintenance contract, though.
Steyn explained that Babcock harboured ambitions finance institutions were unable to accommodate. She said banks wanted “to offer finance capital at the lowest risk”, while Babcock wanted to support its customers and grow the brand in South Africa.
If a customer qualified, BFS would, for example, be able to provide payment-free periods, competitive interest rates and balloon payments, while it could also tailor repayment terms and deposits required to individual needs.
Steyn emphasised, however, that BFS knew it “had to act sensibly”.
BFS was funded by Babcock Africa and the local market, and had 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 were forecast to reach around 300 units in 2014.
This was close to a sustainable number for Babcock to mull the establishment of a DAF assembly plant in South Africa, confirmed Steyn.
She said it was Babcock’s intention to start local assembly, but that timing and volumes were of importance.
The current DAF parc in South Africa was 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 employed around 70 people.