We’re launching an all-new series in FOCUS called Face to Face, in which we will interview captains of industry. In the first instalment within the new series, CHARLEEN CLARKE goes face-to-face with Markus Geyer, MD of MAN Automotive.
You had a great 2017. Well done! How is MAN Automotive performing in 2018?
I would like to answer this question from a local perspective where we play predominantly in the heavy bus and extra-heavy truck segments. We have managed to increase our market share in the South African bus market from 37,5 to 46,4 percent – despite the market contracting by 4,3 percent.
In the South African extra-heavy truck market, we have increased our market share from 9,7 to 14 percent in a market which has grown 4,2 percent. These figures compare January to May 2018 with the same period in 2017. So, while there is always room for improvement, we are not unhappy.
What is happening in the heavy (8 501 to 16 500 kg) sector of the market? Sales seem somewhat subdued?
You would have noticed that the National Association of Automobile Manufacturers of South Africa (Naamsa) heavy segment, for South Africa only, has in fact declined by
12 percent year-on-year.
MAN has only one model competing in that segment – the CLA 15.220 4×2 BB. While government has placed indicative orders for that model, which facilitated our market share in 2017, various purchases have been placed on hold by central government in the first part of 2018.
We have no doubt that we will catch up market share lost on account of government purchases by gaining ground with retail customers. This little truck is very well spec’d, at a very good price, and comes with a three-year, bumper-to-bumper warranty. It is an eight-tonne option not to be missed by prospective buyers!
You recently opened a wholly owned dealership in Port Elizabeth (PE). Why the decision to open in this location, and why the decision to go the wholly owned route? Does this mean that you will be opening more wholly owned dealerships? If so, why?
PE has always been an important geographic location. It is a must-have service point on the South African map. We are opening this dealership with an eye to enhancing customer service and growing market share rather than increasing profitability (the PE market isn’t massive). As such, we have decided to put our shoulder to the wheel with our own investment and people.
It’s also important to remember that Volkswagen (VW) has a massive investment in that area. Feedback has been very positive in a very short period of time. Our network development strategy evaluates various potential dealer points on an ongoing basis, and the decision to go with our own investments and people depends on the strengths of potential private-capital partners.
I believe you’re expanding your assembly operations? Tell me more!
MAN Automotive – thankfully – seems to be bucking the trend shown by macro economics and business confidence levels in general. We are having a fantastic run at present. This success has required us to increase production capacity for the year by some 1 000 units, compared to 2017, in Pinetown. Our bus and coach plant, in Olifantsfontein, is also targeting five-percent higher volumes in 2018 compared to original plans for the year, due to nice orders.
MAN ProfiDrive is huge overseas. Is it also popular with South African transport operators? Do local operators appreciate the benefits afforded by proper driver training? Are they willing to invest time and money in training?
Absolutely yes. We have a dedicated portfolio for this value-added service, and demand for driver training is on the increase. In short, ProfiDrive is showing that operators can achieve a significant increase in productivity (a function of payload and average speed) while also achieving up to ten-percent fuel savings. These two aspects are normally a trade-off – not so as demonstrated by ProfiDrive.
You had an outstanding year in 2017 when it came to used vehicle sales. Is this continuing this year?
For us it is all about customer confidence in our used vehicles. As a team, we are absolutely delighted with the fact that the investments started in 2015 are being tangibly felt in the market today. For example, a used TGS 27.440 prime mover – three years old and with 600 000 km on the clock – achieved a ten-percent higher price in 2016 compared to 2015.
This value increased by 14 percent in 2017 compared to 2016, and so far, year-to-date, we are up another nine percent. As the values of our products are increasing, so we are seeing greater demand for them as second-hand units. If we had more stock, we would be up around 20 percent in sales.
You recently embarked on a VW roadshow. Can you tell me more about this please? Are you hoping that VW sales will finally take off?
The VW success in the bus business is undisputed. We have consistently maintained over ten-percent market share in that space, and the product has gained a very good reputation for simplicity and reliability – while being great value for money.
In the truck market, we have two base options for our customers to choose from – the 17.250 4×2 and 24.250 6×2. The roadshow is designed to showcase where VW fits into the overall product offering – meaning between the entry-level CLA and the super-premium TG ranges. We aim to improve our performance in the niches where VW has been doing very well thus far.
2018 is an IAA year! Can you give us any clues as to what we will be able to see on your stand?
As always, MAN will go big! That’s all I can say at this stage.
Please give us your prediction for commercial vehicle sales in South Africa this year.
For extra-heavy trucks, against official reporters, we believe an average of 1 000 units per month (12 000 for the year) and for buses around 100 per month (1 200 for the year).
Finally, you have now been in South Africa for some time – which we’re all very much enjoying! I believe that continuity of leadership is very important in South Africa.
How much longer will you remain here?
I plan to be here for at least three more years; maybe longer. That is for the company to decide.