MAN-111111 is climbing UK market chart
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I VISITED an own-account operator a while ago where I learned that the last transport manager had been sacked and the firm had since reverted to its Britishmade lorries from its imported marque. "The fitters understood —, were familiar with — and wanted —." That's one reason for never changing marque, and not one to boast about. A firm like that cannot reasonably contemplate change.
Operators change, manufacturers' market shares waiver, when hauliers believe they can get better value for money and this depends on one question: what quality — vehicle and back up — are they getting for how much? This is wrapt up in whole-life costing; a blackboard phrase — for goodness sake, at the back there, remember to estimate all costs!
MAN-VW is looking for — it's already obtaining — a larger market share in Britain and when I met Richard Ide, managing director of MAN-VW Truck and Bus and a director of VAG (United Kingdom) since September 1982, what he said all boils down to an emphasis on quality: dealers, products and after-sales service.• Richard stressed that everyone in his organisation knows the truck and bus scene (ie no laid back or laid off car salesmen). Richard left school at 16, was an apprentice with Bedford, joined one truck dealer and went on to become md of another at the age of 30, and then ran Seddon Atkinson's sales and marketing operation just after the SH merger. Now that International Harvester has sold SA to Pegaso, it's nice to see them with a more secure future, he told me.
He ran sales and marketing for IH in Brussels for Europe, the Middle East and Africa. Two years ago, he was approached to join VAG, when it had just taken a majority shareholding in MAN-VW, to take care of all commercial vehicle activities — "an interesting challenge".
With the recession, MAN's market share of heavy tractive units and MT models had slipped below one per cent in the United Kingdom by the spring of last year, way below that necessary to retain a viable dealer network. Now it's up to three to three and a half per cent (seven per cent for eight-wheelers). For comfort, it needs to reach five per cent, he said.
The MAN appeal will be reinforced this summer when the 361 tractive unit, very successful since its debut in 1983 on the Continent, is introduced this summer, to be followed by a very competitive range, particularly with regard to unladen weight, of 16-tonners. MAN's, by the way, have 28 per cent of the German market, and this proportion is growing.
"As an importer, we have quality products and a quality dealer network; about 120 for light commercials but some 40 of them specialise on the bigger machines. We have to be very careful not to over franchise.
"An additional half a dozen are service-only specialists. They advise on product selection and on after-sales service and encourage the very highest standards; there is parts delivery every second day. We have been able to utilise many VAG systems for our truck dealers. The entire dealer parts stock is centrally controlled through our computerised system.
"What matters to the operator is the efficiency of dealer stockholdings. In addition, we have a programme to relieve operators who wish of the mechanics of maintaining trucks. In essence, it is the product that has attracted our dealers since our vehicles represent the finest German engineering with reliability, durability and low whole-life costs. There was a time when that was felt to be enough: no longer — you need an organisation and dealer support to allow hauliers to capitalise on low operating costs.
"For example, our MT carries a used value after three years of £1,000 more than the market leader in its class. In terms of operating costs, we can sign a full maintenance contract on a 38-tonne tractor at 3.2 pence per mile for 80,000 miles a year over five years and that includes 24-hour recovery assistance, the MoT test, safety checks and so on." I asked: what about discounting? "Clearly, we shall try to. maintain competitive prices in the market vis a vis our quality. We never entered into the cutprice warfare apparent for the past three or four years; it desperately undermines residual values. Big cut-price fleet deals sell existing customers down the river. Many operators are running MAN's today in favour of other makes and operating at cost benefits through making the change; this is really what MAN stands for."
I added: What are the immediate prospects? "Last year was a funny year,' he replied, "with indications of a pull out from recession but depressed rates, 38 tonnes and type approval causing massive problems. Now we are selling twice as many trucks; on parts we have dramatically held our prices and will do so until at least January 1985. In fact we found room to lower our main lines by 30 per cent; we are not supermarketing but keeping maintenance charges down, and our vehicles don't need parts so often as some of our competitors.
"On the bus side, however, we are not active at present — though fives Bendis are operating in Redditch — but we are keen to develop on the coach side. When we introduced the integral SR 280 we made the mistake of selling direct to the operators. Now we have appointed one dealer in the North, another in the South and are looking for one in the Midlands. The bus market needs a dedicated approach and we'll be looking for openings in a couple of years' time.
"What I would like to emphasise is 'that we have brought in a lot of experienced commercial vehicle people. We are a free-standing commercial vehicle operation within VAG, which, with Lonrho, its parent company, last year allocated £5.6m investment for the business in Britain over three years. We have all the benefits of being part of this large organisation and I can concentrate on running a commercial vehicle business.
"We are a fairly tight group. Including all the VW's, 11,000 vehicles will be imported this year, and we employ just one hundred people. Dealers and operators will get the benefits."
He added: "By the way, during the recession many sales people left and now our dealers are gearing up, recruiting and training. But this will always be a cyclical business; today there is excitement in the truck market I have not seen since the end of the Seventies — we're in for a couple of very good years."