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Past Issues

July  2004

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Close to 100 customers, dealers and members of the press recently got together at DaimlerChrysler South Africa's headquarters in Zwartkops to listen to Johan Cloete, divisional manager for Freightliner FUSO, outline future plans for the Canter and FUSO truck ranges - and how and why these plans were hatched. Patrick O'Leary came away convinced of good things to come in some areas but not so convinced on others. What is certain is that the gloves are coming off in the medium commercial market.
  

RING THE BELL Based on DCSA management plans to capture market share, these are the names (left) that are ringing the bell for the first round of the medium commercial vehicle market share fight. How many rounds the fight will go is anyone’s guess.

First up on the good news front is the fact that the Mitsubishi Canter range has been expanded from its current two-model line-up to four with the addition of two new models to the range. At the same time, the specification levels of all four models have been upgraded and adjusted to better suit customer needs.

The two current available models are the Canter FE6-106 and the FE7-143. These are now joined by the Canter FE7-115 and FE5-106. The FE5-106 and FE6-106 models are powered by a 4-cylinder, direct-injection diesel engine delivering 78 kW at 3 500 r/min, while the FE7-115 is powered by a 4-cylinder, direct-injection diesel engine delivering 85kW at 3 200 r/min. The addition of a turbo-charger with intercooler boosts the output of the engine powering the Canter FE7-143 to 105kW at 3 200 r/min.

According to Cloete, the Canter has done exceptionally well in the market since DCSA took it over from the then SAMCOR where it had spent some years languishing in limbo. Prior to it going into that stable, the Canter was an extremely popular vehicle with close to 20 000 of them operating on our roads. The accent SAMCOR placed on the vehicle was sweet zilch with the result that it all but disappeared as a marque. One got the feeling that management regarded it as a necessary evil reluctantly inherited via SAMCOR's representation at the time of the Mitsubishi brand.

To give them a bit of credit, they were not truck guys. But no, to heck with the credit: Why did they then take it on and mess up a perfectly good marque? Anyway, that's all gone now and although DCSA initially found it an uphill struggle to overcome the harm that was done to the brand during its time in the SAMCOR stable, the product is now doing exceptionally well.

"The Canter is probably the best product DaimlerChrsyler has introduced into this market as evidenced by the low level of warranty claims. We just don't know of them," said Cloete enthusiastically.

With the new models extending the range, combined with the upgraded improvements, Cloete is confident that the Canter is going to make deep inroads into the market. He goes so far as to say that Canter is set to become the "dominant force in the market". We'll come back to that but first, some of the enhanced features.

Spec upgrades
Note that FleetWatch does not usually go onto spec details of new models as these are adequately covered via promotional material produced by and available free from manufacturers. We do, however, consolidate these once a year in our highly popular TruckWatch annual published every January. In the case of the Canter though, we're giving it a big more of a showing due to it being shoved in the bottom drawer for so long at SAMCOR.
   

	CONTENDERS  Entering the Canter ring as new contenders are the FE5-106 (Bottom left) and the FE7-115 (Bottom right) which join current stalwarts FE6-106 and FE7-143 (opposite top and bottom).

Cab

• Without doubt, the cab is visually appealing making it a good looking 'lorrie'.

• The design offers aerodynamic properties along with panoramic forward visibility.

• The interior offers a user-friendly environment.

• Improved noise insulation is provided by the floor mats.

• Four sealed-beam headlamps ensure safer night driving.

• An advanced windshield wiper system includes a washer nozzle integrated into the wiper unit to spray the soap and water solution onto the windshield along with the movement of the wiper blades. The wipers are extra-long to increase the wiping area to give better visibility.

• Extensive use has been made of zinc and resin materials to prevent corrosion, thereby extending the service life of the Canter.

• Given the large number of bumper bashing incidents in confined loading and offloading areas, the resin fenders and bumpers should make accident repair work cheaper and easier.

• The extended mirror arm increases the rear view.

Engine

• There is a choice of three high performance engines with high power output and engine technologies.

• The specially reinforced engine mount frame provides for durability and enhanced stability.

• A large diameter clutch is fitted for durability and reliability.

• There is a dual filter air cleaning system.

Servicing

• The tilt cab enables easy servicing and maintenance.

• The fuel and oil filters are now easy to change spin-on types.

Environmentally friendly

• The Canter is easy on the environment because of the extensive use of asbestos-free materials that are re-cycleable.

Driveability

• The driver's seat is adjustable and wide enough to provide comfort for the larger guys.

• Excellent visibility and unobstructed side visibility is given by the extended lower quadrant of front windscreen and deep cut safety windows on the side of the cab;

• The steering wheel is adjustable for tilt and reach.

So that's what you can expect from the Canter range. Let's move on to other aspects of the presentation. In what Cloete described as a break-away from normal tradition, he gave the audience an insight into DCSA's thinking behind their strategies.

Open market environment
It started back in 1994 when the market opened up following years of sanctions. "We realised at that time that we couldn't maintain our share of the commercial vehicle market - where we held 50% share in certain categories - in the new open market environment. We decided we would have to look at alternative products to add to our range." Back then, it wasn't DaimlerChrysler but Mercedes-Benz South Africa.

Having taken that decision, other open markets like Chile and Australia were looked at to see how manufacturers fared in markets which faced similar competitive situations. "We saw how some companies had lumped together the brands and we decided not to go that route as they had merely added different brands but recorded no increase in market share. We didn't want that," said Cloete.

It was thus decided to have different marketing lines and divisions and thus today you have, under the DCSA commercial vehicle umbrella, Mercedes-Benz and Freightliner FUSO divisions. The latter division houses Freightliner, Western Star - which aims at the dumper, abnormal market - and Mitsubishi Fuso which incorporates the Canter and FUSO truck range. 
  

Stumbling block And here we have the first stumbling block. When you talk Canter, do you refer to it as Mitsubishi Canter or FUSO Canter - or just Canter? And when does a model shed all those names and take on the FUSO brand? And what's a FUSO anyway? The source company in Japan is Mitsubishi Fuso Truck and Bus Corporation (MFTBC) which was formed as a spin-off from Mitsubishi Motor Corporation (MMC) in January 2003 to house the truck and bus division. In March this year, MTBC became a fully consolidated subsidiary of DaimlerChrysler when DaimlerChrysler raised its share in the company to 65%. In Japan, a FUSO truck is clearly branded as such and the only indication of it being part of the Mitsubishi stable is the tri-logo above or below the Fuso label. So too with the Canter. (See accompanying photographs). Yet the Canters on display at DCSA were all boldly branded Mitsubishi Canter. And the only true FUSO model on display - marking its entry into the South African market as a preview of what's to come next year - was branded Mitsubishi. And don't, for goodness sake, ask to buy a Freightliner Fuso. You'll need plenty Zim dollars as you'll be making an offer on a large chunk of the DCSA organisation. Eieeesh! Some clarity is needed here as it's all quite confusing - not only to us but also to Cloete. When I prodded him at the conference for some clarity on the names issue, he chortled and said: "Can we come back to that?" He never did. One-stop shop But back to the strategy: The idea behind the establishment of the Freightliner FUSO division was to provide operators with a one-stop trucking shop where products ranging from 3,5 ton GVM right up to the biggest Freightliner could be bought from one source. And if you decide to add a quarry to your operations, you can also buy a Western Star dumper from the same shop. Mission and vision statements were put in place and a number of focused areas of service and support - both inward and outwardly focused - were structured in to ensure full support of all activities and a set of six values were also factored in. These are: To value the customer; to act with integrity; to keep promises; to lead by example; to make decisions based on fact and; to be loyal to the business.

In Japan ... These pics taken by FleetWatch’seditor while in Japan recently show FUSO clearly branded as such - as is the Canter. The Mitsubishi logo – not name - is carried as a sub-brand on the trucks. There is no confusion.

In South Africa ...  Confusion reigns. The flags shout the brand FUSO but behind the flags, the trucks are branded with both Mitsubishi and Canter names - as well as the Mitsubishi logo. And the FUSO truck (see below.. A PREVIEW) is branded Mitsubishi with no sign of FUSO anywhere. Eiiish! What is the customer buying?

With the products and structures now in place, management revisited their original aim behind all this, namely, to increase DCSA's commercial vehicle market share so as to regain the high ground enjoyed pre-1994 - and this is what they decided on.

"By the year 2008, we want a 40% share of the total commercial market share. Of this, 25% will be made up by Mercedes-Benz and 15% by Freightliner FUSO," said Cloete, adding that to help get there, another two more Canter models will be added to the range next year and three new FUSO medium commercial models will be launched next year. "There are a host of new products coming in between now and 2008," he added.

So they've got the products in place but how do they intend getting to the 15% with Mitsubishi FUSO when the medium commercial market can only absorb so many unit sales and is, in any case, already choc-a-bloc with pretty good products from manufacturers all around the world?

As an aside, he showed an interesting slide detailing the origin of products coming into South Africa. Of all trucks in our market, 5% originate from the USA, 43% from Europe and 50% from Japan/Asia. So the Canter and Fusos will be vying for a slice of that largest pie and as Cloete stated: "the market is dog eat dog out there."

Admittedly truck sales have been nothing short of phenomenal over the past two years and are expected to continue in line with the expected steady economic growth but again, there are many players catering to this growth who will be going all out to increase their own market shares. So where's that leap going to come from?
 

Bold statement
Cloete admits this reality. "There is so much out there and as we have seen with the Canter, it is a case of slow, steady growth. No-one is able to attack the market and leap forward. What we will be doing therefore, is looking at the three other major Japanese manufacturers to take away market share away from them."

Now there's a bold statement that should serve to raise the hackles of Toyoto, Nissan Diesel and Isuzu. As stated in another article in this edition, there is no ways these companies are going to sit back and simply watch Canter cutting into their market share. They are going to fight to retain and indeed, to increase their own slices of the pie.

Based on slides shown at the conference comparing the specs of the individual Canter models to those of their rivals, there's not much differentiation. They are all pretty close. Standing as an advantage in the Canter camp is the fact that the price of the Canters was shown to be on the lower rung in comparison to its competitors. However, Cloete and his crew would be wise not to rely too much on this as ammunition to steal market share from his rivals. We say this because although upfront price is a factor in the purchase decision, operators are tapping into the concept of lifetime costs so aspects like reliability and parts pricing is going to have a major influence.

As it stands, we don't see Canter becoming that "dominant force" that Cloete envisages it to be by the year 2008. Certainly it is going to make good inroads into the market as it is a superb truck - but it is up against other superb trucks from serious and established players like those three Japanese opposition companies Cloete intends nailing.

What Cloete and his crew need to do is pull something exceptional out of their hat. As FleetWatch technical correspondent Dave Scott commented to me at the conference: "If they are focusing on specification and price as a major tactic, they will not get there. They need to do something exceptional for the market, something that will give customers a total feeling of security, comfort and well-being. They need to wrap their arms around their customers and be there for them as full partners in their business - and that includes keeping the prices of parts within acceptable levels throughout the life of the vehicle."

Whatever the tactic, what is certain is that a grand fight is looming and FleetWatch predicts that the next few years are probably going to be the most interesting the medium commercial market has seen in decades.
 

A Preview A preview of one of the FUSO models to be brought into South Africa next year. It’s a FUSO but is branded Mitsubishi here. There will be modifications before its launch – like the fitting of a bigger fuel tank – but this is it.

NEWLINE-SERCO  TTalking FUSO are from left: Hannes van der Westhuizen, sales executive, New Vaal Motors Vereeniging; Ben de Klerk, sales manager of the same company and Johan Cloete, divisional manager Freightliner Fuso, DCSA.