Isuzu Motors South Africa has turned one! What has transpired in its first year of operation? Was it a challenging time? In order to find the answers to these and other questions, CHARLEEN CLARKE goes face to face with its CEO and MD, Michael Sacke
You must be glad that the trauma of the departure of General Motors from South Africa is a thing of the past.
Yes, it was a difficult, challenging time. What made things even more challenging was the cultural aspect. You cannot imagine two cultures more different than the American and Japanese.
During this period, I assume you must have spent an enormous amount of time working with your dealers. Many changes must have been required.
Yes, the dealer network is critical to us – and there has been a lot of change. Our old General Motors dealers lost Chevrolet, which was a big part of their business (in some cases half). Now we have Isuzu standalone dealers, Isuzu/Opel dealers and Isuzu dealers working with other brands.
Each of those dealers has had to change their business model in order to be sustainable. We have spent a lot of time with our dealers in order to create a sustainable network. If the distribution is weak, it affects the revenue and it impacts on the company. We’ve also had to change corporate identity within dealerships and link up to new IT systems … there has been a lot to do.
How many dealers do you have now?
We have 80 dealers in South Africa and 35 dealers in sub-Saharan Africa.
In 2018 Isuzu was the top-selling truck in the country for the first time. This was a huge achievement. You must be really chuffed.
Yes, we have been number one for six years in a row in the medium and heavy-duty segments of the market. This is a great achievement, of which we are very proud. Our truck market share is at 14 percent. We don’t really compete in the extra-heavy segment of the market; that’s generally the domain of the European truck makers.
What about bakkies?
We grew our volume in a flat market in 2018. We were up 8,7 percent compared to 2017, and we achieved a market share of 14,4 percent. We are very strong in the bottom end of this market (the workhorse segment) and our bakkies are strong in the construction, agriculture and courier segments.
Exports into sub-Saharan Africa have grown quite nicely. From a sub-Saharan African exports perspective, our sales increased by 17 percent in 2018, compared to the previous year. So, overall, our volumes in our first year have been very satisfying indeed.
Speaking of bakkies, the KB was in the market for 40 years. That name is now gone. Why was it changed?
We have commonalised the naming convention on our bakkies to D-Max. Globally, Isuzu uses D-Max and so now we do, too. Naturally, this is a big change and we have had to make customers aware that we have not changed the actual bakkie; just the name has changed.
You recently decided to consolidate your bakkie and truck plants – and now all your production facilities are located under one roof at the Struandale plant. Why?
Having both Isuzu production facilities under one roof has many advantages – including driving a common team culture and the optimisation of shared resources. The changes that we have made have resulted in greater efficiencies in terms of our manufacturing support resources and an opportunity to improve the application of our lean manufacturing system.
Materials are now stored closer to the truck line which reduces travel distances substantially. This improves efficiency and eliminates waste and unnecessary cost. We used the opportunity to work together with our source plant to change the way that material is packed, providing us with easier access to the correct material at the correct time.
We also came up with some innovative solutions with regard to material storage. Ultimately, we can operate more efficiently and save R10 to R12 million a year.
Did you need to expand the plant to accommodate the trucks?
No, we used an area that was previously used for the annual production of 20 000 passenger cars.
Have all your facilities moved to Struandale?
Unfortunately not. The paint shop, for instance, is located at the old truck factory in Kempston Road. I would love to move it – but moving a paint shop is far from simple. Hopefully one day…
I believe your factory is very green?
Yes, nothing leaves the facility and goes to landfill. We are very proud of this.
You are also passionate about upliftment of the community, correct?
Yes, people are critical to us. We are also trying to help our community base. We sponsor the Southern Kings rugby team and Ironman Africa Championship, which is a tangible demonstration of this sentiment.
You have often spoken about the need to adapt vehicles here in South Africa. Why?
The conditions in Africa are different to those in Japan and Thailand, so we need to convert our vehicles to operate in South Africa. We have changed quite a bit on our vehicles to get the durability we need in this market. Typically we find that vehicles out of Thailand are designed for better roads, so we strengthen our axles and chassis to make them more durable.
Please comment on the role and importance of Kanu Commercial Body Construction.
Kanu is a subsidiary of Isuzu Motors South Africa. It is there to create solutions for our customers. A truck that leaves a line is useless; bodies, tippers, mixers, or whatever is required for an application, need to be added. Accordingly, the service of a bodybuilder is required. There are 60 or 70 bodybuilders in South Africa and Kanu is one of them.
We use quite a wide range of bodybuilders. Kanu specialises in unique designs, so we use them where it isn’t just a typical run-of-the-mill dropside or van body that’s required. The idea is to grow that business. We do probably ten to 12 percent of our bodybuilding business through Kanu.
One of your competitors is promising the introduction of a hybrid truck in South Africa quite soon. Where do you stand in this regard?
We have a hybrid prototype running in South Africa at the moment. The question is: where is this going to go? Are we looking at electric, hybrid, or perhaps autonomous trucks finding favour with buyers?
Our parent company is working on all sorts of different solutions. We do run electric trucks in Australia and they’re being tested in Japan. We have electric capability when it comes to buses, too. Our capability is there; it’s now just a question of cost and demand.
Finally, how do you envisage the total vehicle market ending up in 2019?
I think the passenger car market could slow down, while the light, medium and heavy commercial vehicle market will be flat this year.