Predictions of a tough road ahead
Isuzu Trucks had a great year in 2014, but its chief operating officer is expecting a turbulent market in 2015
HAVING come out of an extremely tough 2014, Isuzu Trucks SA is geared up to face what is seemingly a more turbulent 2015. This was the overriding sentiment at the annual state of the business update that was addressed by the company’s chief operating officer, Craig Uren, who provided a holistic review of the state of play for the industry and a realistic outlook for the year ahead.
Operating against a global and local backdrop characterised by conflict on many fronts — economic, political and religious — Uren stressed the importance of business being nimble enough to embrace uncertainty and managing many variables to remain competitive.
The tough economic conditions that saw the overall truck market record a nominal annual growth of 2% at the end of December last year are set to continue in 2015. The medium commercial vehicle segment (MCV) dropped by 4.9%, while the heavy commercial vehicle (HCV) segment recorded a decline of 2.1% and the extra heavy commercial (EHCV) segment grew by 8.7%.
Isuzu Trucks SA had a solid performance at the end of 2014, exceeding the 4,000 unit sales mark for the second year in a row. The company remains the leader in the cab-over-chassis and medium commercial vehicle segment of the industry, with a current market share of 12.8% of the total truck market.
Said Uren: “Exceeding 4,000 Isuzu truck-retail units in 2013 was a carefully planned event and a first-time surprise to our competitors in that year. Now that Isuzu Trucks has repeated this with 4,046 sold in 2014, there is proof of the sustainability of Isuzu Truck’s market position as the leading brand in southern Africa.”
Its N-Series products accounted for 21% of the MCV market, giving the brand market leadership of this segment and its F-Series achieved 23.4% of the HCV market. Since the recent introduction of the FX Series this range continues to grow and achieved 3.3% of the EHCV.
The Japanese manufacturer says its success in the South African market can be attributed to its product differentiation, innovation and customer-centred approach to finding solutions that will increase customers’ profitability and productivity.
Productivity at its Port Elizabeth-based plant was extremely healthy in 2014, considering the wide labour unrest experienced by many automotive manufacturers that have an operational footprint in the country.
In comparison to similar territories, the local operation is pretty much on par with its Isuzu Truck counterparts in successful emerging markets.
“The fundamental driver of our solid performance is the AMT technology, which Isuzu brought to the MCV and HCV market in SA and is used extensively across our product range. In some cases one will find that AMT-enhanced models account for up to 70% of total sales in a specific range — that is testimony of the market’s confidence in the Isuzu specific technology,” Uren added.
Painting a picture of what success would look like for the business in 2015, Uren put a stake in the ground and said his team would work towards achieving further good growth on the 4,046 units sold last year, continue to drive product innovation and constantly seek opportunity in adversity.
However, he did have a number of warnings for the industry in 2015. “The latest economic stats are not good reading,” he said. “For the first time we are now discussing the threat of deflation with Eskom unable to maintain the demand for electricity, confirming that rolling blackouts will become a norm for time to come. On top of this, SA’s transport legislation does not get to grips with the problems at hand — the latest gazette on speed control does not improve vehicle maintenance and safety. Yet there are good business sentiments in many areas despite a lack of political leadership in our economy.”
On the environmental responsibility front, the company will continue conducting trials on products that run on green fuel sources and test hybrid models with selected customers in the local market.
The company plans to make significant investment into local business in 2015 and 2016 to enhance its business model and this includes developing local communities and promoting entrepreneurship on the social responsibility front, but will only reveal details of its plans in due course.
“There are also further plans to increase productivity at our Port Elizabeth truck plant. Isuzu Truck SA will ‘stick to its knitting’ and never mind the negatives — we have no option but to adapt and be nimble, dodging whatever is thrown at us,” concluded Uren.