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Past Issues

September 2005

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Euphoria is running high in the new truck sales arena but while sales have reached record highs, suppliers caught up in the holus-bolus rush to market would be wise to guard against overlooking vital, long-term issues that will have an impact on safety and operating costs. Tony Manning, author and strategic guru, stated that: 'The most dangerous time for any company is at the peak of its success'. Given that current sales charts are masking a horde of evils for which we will pay dearly, Manning is right contends FleetWatch technical correspondent Dave Scott.

Wow! We've never had it so good in new truck sales. However, I have the feeling that everyone's watching the proverbial doughnut and not the hole in it. New vehicle sales have always been a success barometer but this success is coming at a price and unfortunately, victims of the current retail euphoria are quality, new product testing, parts availability, sufficient trained technicians, databases, driver training, staff structures and executing all those 'basics' that really make trucking work.

I have just come from a trailer audit presentation where the new trailers - only two months old - are in worse condition than much older ones in the fleet. Two identical-spec trailers delivered at the same time are full of rust; ABS systems are there but unconnected from delivery date; hasty welding is a shocker; mud-flaps are fitted as ornaments at ineffectual distance from the tyres; and the trailers look as they were built by two different companies. In other words, standards and quality have been cast aside to match the production schedule. 

What is happening to our road transport industry? Truck industry suppliers are breaking the oldest rule in the world - never build to the schedule and then try fix quality in the field. Recalls and re-work are the best way to ruin reputations, annoy customers and lose money.

And now the word in the trailer industry is that thousands of cheap, sub-grade Chinese trailer brake drums have landed on our shores and are being 'bled into the system'. So, if a new or old trailer suffers exploding drums and brake fires, allow forensics to follow the supplier trail.

Ethics are also being cast aside. Despite increased sales volumes, South Africa's lowest inflation rate in years has also resulted in margins being severely squeezed and some suppliers are abandoning their ethical principles for profit at any cost. Ask any truck sales person how little is being made on new fleet replacements - it's a buyer's world with so many competitors and an amazing model variety.

Model proliferation - confusing and dangerous
The current number of vehicle variants - from passenger to heavy trucks - on the SA market now exceeds 1 500. We are forecast to sell an all-time SA record of 575 000 vehicles in 2005. This is great for the banks but the model proliferation inside those half-a-million vehicles is chaotic for the genuine parts business. Just to add to the confusion, the so-called 'alternative' parts market - Aasvoël Motors - is waiting in the wings to pick the eyes out of the carcass. 

With more than 750 000 annual collisions involving 1-million vehicles on our roads, fleet managers must keep a wary eye on 'crash parts'. I have seen trucks standing at body shops for up to six months and more waiting for parts to be 'flown in'. Who will pay the bank while a car or truck produces nothing for half a year? 

One of the main drivers of current retail volumes is fleet renewal. There's no doubt that lowering the average age of the fleet increases reliability and reduces operating costs but be wary of untried, untested, poorly represented, unsupported vehicles that come with many promises.

Parts are the key to transport productivity but too little investigation is done into the 'spares department' of suppliers when buying new trucks. Even some very reputable truck manufacturers are taking major strain in their parts divisions in terms of price and availability. Their sales successes are masking parts problems.
 

ABS never connected since delivery on new trailers. Who actually cares about the quality of braking on a vehicle combination?

NEW TRAILERS are being taken into service with poorest welding I have ever seen. What’s happening to our standards?

MUDFLAPS are required by law to be no more than 300mm from the wheel. These flaps are mounted at 500mm and are ornamental. Why bother to fit them if they do not contain road spray?

All about price
The annual increase in the 3,5 - 8,5 ton gross vehicle mass (GVM) medium truck market is staggering. It reflects the rest of South Africa's consumer rush. (See Table 1). Many of these sales - up to 40% - are taking place in passenger car outlets that have the right to sell MCV trucks. The problem is that many of these dealers know all about price and discount but little of vehicle application.

The sales of extra-heavy trucks - over 16,5t GVM - have also powered ahead (see Table 2). However, just because sales have rocketed doesn't mean there are more qualified truck sales people on the ground. The few highly-qualified, competent sales people are stretched to the limit while many haven't got a clue on the difference between GVM and GCM, V or D/T. 

Bus sales people must be excluded from these harsh comments. The bus industry is flat-lining and as a small, focused segment, it takes considerable expertise to sell and spec buses, especially in a market that seems to run at around 1 000 heavy buses annually regardless of the economy. (See Table 3).
 

'Hubris' becomes the culture
Hubris is a 'cool' word that equates to excessive arrogance. It's that almighty feeling that many CEOs experience when sales are roaring. What they must never forget, however, is that with every upturn, comes a downturn. 'Hubris' allows unresolved warranty claims and technical faults to fester for long periods simply because sales successes mask fault ratios. On paper it all looks good because of the sales but on the ground, major driveline components are being replaced. 'Hubris' promotes luxury personal transport when a fully equipped field service van is what is actually needed. 

Without sufficient product testing behind them, 'hubris' lets newcomers into this market to chase up the volumes. And who suffers in the end? The customer of course. The real danger that accompanies OEM arrogance is that passenger car people think they can do without truck expertise to sell trucks - and the market just runs to carry and reinforce this perception. 

Missing the opportunity to renew and re-invent
Complacency which flows out of success dulls our drive to seek ways of improving our businesses. Professor Andy Andrews made this point at a recent parts conference hosted by Nissan Diesel in Pretoria. The time to take the risk, reinvent and grow businesses is when you're on the upside trend. That takes us to new heights. It's perhaps natural, however, that we only get active when things slow down. By then it's too late - we've missed the bus.
 

Andrews concluding comments to his presentation bear constant repetition: "Success lies in relationships and not transactions." Everyone who thinks they are doing well must draw up a list of those sales that were purely transactional and those born of long-term relationships. Increased turnover is most often about transactions and not relationships. There's a big difference between customer satisfaction and customer loyalty.

The forecast drives the system
The forecast drives the system and this too is a very dangerous time. The record sales of the last three years tend to be expressed in forecasts that become too bullish. But in the tumult of increased turnover, has the database been well-maintained for easy analysis to drive future strategy and communication? Do we really know our customers' vehicle applications and transport challenges or did we just sell truck tractors? Do our client relationships allow us to forecast their future needs with confidence, or are we taking a transactional flyer at the forecast?

I know that I have been 'too busy' in the 2005 market growth and have dropped my own catches in terms of relationships and client service. It's time for re-assessment.