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African adventure
Page 60
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In Africa, British exporters are facing stiff competition from fresh-out-of-the-box, Chinese-built truck imports. And the Americans are getting in on the act as well...
Words: Steve Banner
Used truck exporters are facing competition from brand-new Chinese trucks in many of their traditional African markets.
The Chinese products are priced so attractively — new 6x4 tractor units are on offer for less than £20,000— that many operators are opting for them instead of the fiveor six-year-old European vehicles, or even newer Japanese models, they might otherwise have purchased, say traders.
Regional presence
Buyers are also acutely aware that China is investing heavily in sub-Saharan Africa, especially in raw material extraction, and this may be influencing purchasing decisions.
"It's not the first time we've been affected by the Chinese," says Anthony Wright of independent dealer and exporter European Vehicle Sales, which is based near Doncaster.
"We used to send a lot of second-hand trailers overseas, until we found that they could deliver a new one for the price of one of our used ones. That made trailer exporting more trouble than it was worth, so we dropped out of it."
But trucks made in China do have their drawbacks, as purchasers are now discovering, says Wright.
"They're not as durable as Western vehicles, even second-hand ones," he observes. "Operators run them for a couple of years then go back to a used Mercedes."
It is a view shared by Paul Mercer, sales director at Market Weighton, East Yorkshire-based exporter Britcom International. "They certainly don't last as long," he remarks.
Nor is fuel economy their strongest suit. However, Mercer warns that China is bound to improve its product quality over the next few years, and when it does, UK used truck exporters will face a much more significant challenge than they do now.
"At present, I'm not in panic mode. I don't think we're losing sales, and Chinese competition certainly doesn't terrify me," he comments. "But it may do so in a few years' time."
China is not the only threat to export sales. "We're finding that customers in some countries are opting for used American trucks," says Mercer. "They can be as much as 50 to 70% cheaper than the equivalent product from Britain."
He adds that the American threat has been around for several years in some markets — "it was making its presence felt in South Africa 15 years ago" — but the weak dollar may be making it more effective than it was previously.
An improving market
Is sterling's slide in value against the euro aiding exporters? "It's helping to a degree in some countries, but not so much in Russia and the Far East — they tend to be dollarrelated markets," Mercer replies.
Britcom exports about 120 trucks a month and one of its biggest markets is Kenya. As well as exporting commercial vehicles there, it owns Heavy Vehicle and Plant Suppliers, the country's Renault truck distributor. Consequently, it has witnessed Kenya's recent political turmoil at close quarters.
"Things haven't quite got back to normal, and there still isn't the confidence around that there used to be, but the situation has got better," he says.
Wright agrees that things in Kenya are improving: "Operators there are buying again."
The political upheaval had a particularly severe impact on the confidence of the banks, and that hit the used truck market hard, says Mercer.
"A lot of vehicles are obtained on finance in Kenya, and a lot of the banks went through a period of not being too sure about advancing funds," he says. "Fortunately, attitudes are now starting to change."
Despite competition from the Americans and Chinese. Mercer clearly feels there are still huge opportunities for British exporters of second-hand trucks — or at least for those who appreciate exactly what customers are looking for, and understand the rules and regulations governing imports imposed by each country.
"Britcom can also train drivers and technicians, which gives us an advantage," he says.
He views Angola and, rather more surprisingly given its appalling problems, the Democratic Republic of Congo as emerging markets. "There's also a lot of potential in Nigeria, Cameroon and Ghana," he adds.
The downturn in the UK's domestic used truck market means that vehicles for export are becoming easier to obtain, says Mercer. "However, the sixto seven/ear-old vehicles that are the olekhat can be exported to some countries remain thin on the ground," remarks Wright.
Vehicle conversions
Britcom is now involved in a project with MAN to convert used right-hand-drive trucks to left-hand drive with an eye to exporting them to Africa's left-hand-drive markets.
Logic would suggest that it would be far easier and cheaper to source vehicles from lefthand-drive countries such as Germany. "The trouble is that there is already a big market for them in countries such as Bulgaria, which is rather closer to home," he observes. •