Beware price as your sole
purchase criteria

It is well known that since 1994 when South Africa opened its doors to the world - or more accurately, the world opened its doors to South Africa - this market has become a popular place for new truck marques with a number of overseas manufacturers never before seen in this country now selling products into our market. Over the past, the arrival of these newcomers has been fairly well spaced and thus not that noticeable. The true reality of the situation, however, is perhaps best encapsulated in this edition of FleetWatch where no less that four manufacturers have announced new intentions for this market. One hails from the USA, the other from France, the third from Russia and the fourth from Turkey. I refer to Mack, Renault, Gaz and BMC. Granted, both Mack and Renault are not true newcomers having been operating here for some time but on a scale that has hardly been significant. The stated intention of both is to now go big with Mack structured under the umbrella of Volvo Southern Africa and Renault under the Imperial Group umbrella. BMC has also been operating here but in bus rather than truck guise so FleetWatch, being a trucking magazine, has not taken much notice of them. Now BMC trucks - under the Busaf group - have arrived which, once again, marks the entry of a totally new truck brand, this time emanating from Turkey, a country new to our trucking scene. A totally new player in every respect is GAZ SA, a company owned by McCarthy Ltd, the SA National Taxi Council and a local consortium trading as Russian Automotive Investments Southern Africa. Entering the market with a 16-seater GAZelle taxi, the intention is to bring in Gaz trucks models from the parent company in Russia that goes by the name of RusautoGAZ which forms part of RusPromAvto Holdings. This is one of the leading vehicle manufacturers in Russia, producing 227 541 vehicles in 2004. The company employs 48 000 people and recorded a turnover of more than $1.5 billion last year. At the local launch of GAZ South Africa, it was made clear that RusautoGAZ now wants to expand beyond Russia's borders and therefore sees South Africa as a major market of the future.

What we hear from all the manufacturers who come in is that this truly is a major market for them - both from a sales and a strategic point of view - the latter especially true in the context of reaching other southern African markets. This is all good news and makes us South Africans - as the former scorned inhabitants of the world during the apartheid era - feel most important. It's a great feeling to be wanted. I have a nagging problem though. There is no doubt that South Africa, with its current favourable economic climate as exhibited by on-going record vehicles sales in both the car and truck arena, is a place where everyone wants to be. For any outsider looking in, that means potential bucks and just as China is the new growth arena of the world, South Africa is the growth arena of Africa - on a vastly smaller scale of course. But here's the base of my fear. While companies have streamed into China to get a slice of the profits for their shareholders, the Chinese government has warned that there will be overcapacity in that market in as short a time as five years. Its heady days now but the Chinese government is warning that there will be casualties later. I predict the same to be true for South Africa. It's heady days now but casualties are going to accrue in the longer term.

While in no way do any of us want these good times to end, we all know that there will come a time when the booming sales currently being enjoyed will wane, interest rates will go up and times will get tougher. When that happens, I just hope all these new truck suppliers will show as much enthusiasm to South Africa's downturn as they are showing to its upturn. Cars are emotional purchases. Trucks are not. They are business entities with each being a profit and loss centre depending on their performance. When they are not performing, it is all about loss and that applies to markets as well. I just hope that the planners of all the newcomers have looked ahead to those darker days which, sure as anything, will come. I hope they have written into their plans as much solid commitment to backing up and servicing their customers when times get tough as they have into gaining customers when times are good. With this in mind, if ever there was a time when long-term sustainability of supply and commitment needed to take precedence over purchase price in any truck buying decision, that time is now. Life-time cost of ownership is what the trucking industry is all about. Are all these newcomers going to stay with your over your lifetime? Grill them and pin them down with written rather than verbal commitments to your future. If you have it in writing, you can take it right to the top of the parent company, wherever it is. If you base your purchase decision on price alone, it could be the most expensive decision you'll make.

Patrick O'Leary
Managing Editor