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Past Issues

August 2005

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VEHICLES

Following two failed previous attempts to launch and succeed in the South African market, Renault Trucks has once again blasted off from its launch pad. The launch was a success but only time will tell if its post-launch journey will be successful writes Patrick O'Leary.

There is an uncanny similarity between the Space Shuttle in the USA and Renaults Trucks in South African? Both have experienced failure after launching in the past; both had their most recent launches postponed so as to ensure success; and both had highly successful launches on the day. Also similar was the absolute necessity for the launches of both to succeed so as to regain the confidence of a sceptical public.

Where the similarity ends is that the journey of the Space Shuttle was a relatively short one compared to the journey Renault 3 has embarked on. In fact, whereas the Space Shuttle's journey is already over with the craft having returned safety to Mother Earth under a 'mission successful' banner, the journey of Renault 3 has only just begun. In Star Wars terms, the Shuttle merely went to the moon and back. Renault Trucks is still on its way to Mars - and it has a long way to go with lots to do before it too can be stamped with a 'mission successful' label.

The gut-feel of FleetWatch is that Renault 3 is going to succeed on its mission and there are a number of pointers that lead to this feeling. The first one relates to the type of company it keeps. When Renault 1 was launched into South Africa some years back, it was placed in the hands of a man who had little experience of the truck supply industry and, quite honestly, scant regard for the needs of the market or customers.

I recall this guy speaking at the launch of Mack trucks - an agency he had also got under his wing after getting Renault. The guests had assembled at Golf Reef City and he proceeded in his speech to tell the audience that although he had tried to get the "main oke from the American Embassy to attend, that oke was away so we would all have to be satisfied with second choice - and it was lady nogal." I turned to look at the Deputy Ambassador of the Embassy of the United States of America and I cringed.

She, however, was marvelous and booted him into touch with words to this effect. "I may be your second choice but I must tell you that I probably know more about Mack trucks than you or the 'main oke' will ever know about them. My father ran a trucking company and he operated only Mack trucks. I cut my driving teeth in a Mack truck. I know how to drive them, I know how to fix them and I love them. No Sir, I think in this case, you got first choice." Eieesh!
  

The Vehicles     (Left) Renault Trucks has an exciting line-up of models in the Midlum range which is aimed at the distribution sector.

(RIGHT) The Renault Premium is aimed at the long and medium haul on-highway operator with an all new Premium 420.26 6x4 truck tractor on offer. A Premium 4x2 truck tractor is also available

Silly representation
It was silly representation for a company like Renault and it came to nil. To Renault's credit, when it all fell apart, the parent company put in a man by the name of Jean-Marc Charmard (please excuse the spelling if it's wrong as it was a long time ago) to care take the company and its customers until a suitable partner could be found. He tried hard to maintain a professional image for Renault but was bumping up against quite a few disgruntled customers.

Looking back, it is ironic that at one stage, the company rented premises from the Imperial Group in Isando. Perchance an early sign of things to come? I know for a fact that Charmard would dearly have loved the Imperial Group to take over the marque at that stage but it was not to be. Apart from collecting rent for the premises, Imperial Group CEO Bill Lynch steered clear of any other arrangement.

It wasn't too long thereafter that Renault announced that Nissan South Africa would be taking over the representation of the marque in South Africa. At that time, the Nissan Truck Division was housed in Nissan South Africa and although on the surface the new arrangement seemed like a match made in heaven, it turned out once again to be a good launch but a sorry journey. Renault 2 crashed.

When things crumbled with Nissan, we didn't hear much of Renault although we did know they were operating out there somewhere. We knew this from the NAAMSA sales figures when a few numbers would occasionally pop up against the Renault name in the monthly sales reports. It wasn't much though. In the year 2000, 23 trucks were sold; in 2001 it was 39; in 2002 it was a boom year for Renault with 67 trucks sold; this dropped in 2003 to 21 and in 2004 it went up a bit to 39. Sales from January to June were a mere 32 units.

As FleetWatch correspondent Dave Scott comments: "Hardly impressive figures in a roaring market." The lack of direction, focus and commitment showed in the figures and it was a surprise, therefore, to see a hugely impressive show stand branded with Renault logos and sprinkled with Renault trucks at last year's Auto Africa truck show.
 

False and meaningless
To be honest, such a magnificent showing of opulence and grandeur served merely to irritate rather than impress given the history of the company. This irritation came through when I grilled Renault management, Anton Joubert, Michel Albrand and Sebastien Delepine during a press conference held on the stand. I could not understand how a company with such a serious credibility issue based on it past could come out with such a grand display of strength and commitment. In my opinion it was false and meaningless.

The men replied with mutterings of better things to come. Yeah! We'd heard all that before. What they couldn't say for obvious reasons was that negotiations were nearing completion with the Imperial Group for Renault to be taken into the Imperial stable and placed under the new division of Commercial Vehicle Holdings which had been formed to house the truck brands in the group - the other two being DAF and International. The announcement of that deal came at a press conference held soon after the show where it was also announced that a major launch would be held in March.

We didn't hear much after that except to say that the launch had been postponed. Was this a repeat of the past? As it turned out, the answer was no, it was not. The reason for the postponement was pretty much the same as the reason why NASA postponed the launch of the last Shuttle flight. They wanted to get it right with no possibility of any mishap. As Anton Joubert, MD of Renault Trucks South Africa said at the official July launch: "We delayed it so as not to have another false start. This start is for real." The main reason for the delay was for Joubert and his team to develop the right products for the market - and they are confident they now have these in place.
 

Credibility problem
I sketch this background so as to position the Renault brand in the context of its history and standing in the local market. It has had a credibility problem and as we've always said, it is not the product but rather the long-term sustainability of the marque that has given it this problem. As FleetWatch correspondent Frank Beeton says: 

"Nobody doubts that Renault builds good trucks. They wouldn't have achieved good results in Europe if they built junk but SA truck users have a wide choice available to them and the question they will ask will be: 'Why should I buy Renault instead of a Merc/Hino/Nissan/Volvo/Scania, International etc, etc? Operators don't just buy good trucks. They want to be sure that when (not if) things go wrong, there is a committed manufacturer/importer there to provide the answers and bail them out.

"Unfortunately, having a bad track record is infinitely worse than no track record in this market and the operators who had a bad experience before with Renault's coming and going would have made no secret of their dissatisfaction. Renault needs, desperately, to establish critical mass in this market. It will bring two benefits: firstly, provide some aftermarket income but even more importantly, demonstrate the suitability of the product and the effectiveness of its back-up in the local context."

It is interesting that Beeton's comments ties in well with the answer given by Pieter Fourie, CEO of Commercial Vehicle Holdings (CVH) at the pre-launch press conference when I asked about the type of resistance they expect based on Renault's history and how they intend overcoming such resistance.

"We looked at the market perceptions and discussed this with some operators and I admit that there is a resistance. However, I don't believe it is very big. I am sure we will have some resistance initially but if the market sees some regional operators outside of the Imperial Group buying the product, that will boost confidence levels in the new arrangement," he said.

The good news for Renault is that such sales have already accrued, one being into Reinhardt Transport which has bought a large fleet of Kerax 400.34 6x4 truck tractors and Kerax 350.34 6x4 rigid carriers for use in various applications.

Rodney Keyzer, national sales manager for Renault Trucks South Africa, also told of an order for 15 Premium 6x4 truck tractors received in the first week of their arrival. Another order totaling 19 of the Premium 420.19 4x2 truck tractors was also expected.
 

Tactic to boost sales
The sceptics may well say that of course there are orders coming through but they are probably coming from within the Imperial Group as a tactic to boost the sales and thus the image of Renault. Fourie dispels this

"As a newcomer in CVH, we as Renault Trucks do not look for freebies from the Group and I would like to dispel the perception that we get most of our sales from our own group."

As evidence of this, he pointed out that in 2003, 60% of Tyco sales went into Imperial group companies. In 2004 that dropped to 40% and year to date sales for 2005, it had dropped further to 22%. "We are less dependent on the Imperial Group and are healthier because of that," he stated bluntly.

FleetWatch reckons it's looking good for Renault and our sincere wish is that now that the marque has launched for the third time, that it flies straight and true to its targets. As for the launch, it was spectacular but we won't dwell on that here. As Dave Scott said in an email the next day: 

"Great party last night. Nice video clips but that's all smoke and mirrors. The hard reality is sales people on the ground who are above average and service people that really give service with parts support that makes customer say 'wow'. The rest is all good marketing hype but meaningless when the champagne glasses have been cleared."

He's right. It was a good party. May the after-party be as successful. Go for it guys. Go for it!

Footnote: In the next edition of FleetWatch we will outline the product range. Important first was to establish the new intentions and commitment of the company to our market. After all, the product has never been the problem. The commitment has. 

	A trucker who knows Renault well is Clive Joseph, seen here with his lovely wife in front of the Renault Kerax which is expected to be a high volume seller.
	For FleetWatch's Angelique Hormann and Lorinda Stoltz, the trucks paled into insignificance when they saw their hero Jack Devnarain, who plays Rajesh Kumar in Isidingo at the launch. He was MC. Hands off girls! Eisssh!