Heading for a healthy future

GAVIN MYERS chats to Ray Karshagen, head of the bus division at Iveco South Africa Works, to find out how Iveco Bus is getting on

It’s probably fair to say that Karshagen is currently a very happy man … The bus division of Iveco South Africa is making significant strides in the local bus market and, importantly, the company is successfully beginning to break into key players in the Industry, who are building up confidence in the Iveco Afriway bus product and proving its capabilities.

Karshagen explains that this strategy extends beyond the purchase price of a vehicle; having been based on the creation of products that are reliable, have proven cost of ownership benefits and professional aftersales support.

“To prove this to the operators Iveco has been running a programme of demo buses with target fleet customers. Of the demo buses we’ve had in the market over the past 12 months, all but two have been purchased by the customers that were testing these buses. This tells us they were happy with the buses and that we proved that the vehicle can do what we say it can,” he says.

Naturally, this has attracted the interest of some significant bus operators, but Karshagen explains that there is another crucial spin off.

“We’ve been following those demo vehicles very carefully and improving the product as we go along; especially regarding protection of chassis components in severe operating conditions, which gives the customer added confidence.

“South Africa has it all: from all-paved roads to the extreme mix of 20 percent paved and 80 percent unpaved. A lesson we’ve learnt is that the product has to be tested to this worst of extremes. You don’t know up front who the end user is going to be. It could be someone who has challenging operating conditions,” notes Karshagen.

The success is plain to see: Iveco has upped its share of the South African bus market to an impressive ten percent in the year to date (to June). “We’re making strides, but the challenge we have is to attack the rest of the market – which is a tough task,” Karshagen adds.

How does one do this, then? By focusing its efforts on the 70 to 80 percent of the total market volume made up of front-engine vehicles – and that means some exciting new models are on the way…

The first of these is an automatic transmission for the Afriway 4×2, which premiered at this year’s Southern African Bus Operator’s Association (Saboa) annual conference. By the time you read this, the first units will be with customers – Karshagen says that an impressive number of orders are on the books already, from customers who have used the manual transmission versions, but would prefer to run the automatic transmission derivative.

“We’ve successfully launched the front-engine, manual Afriway 4×2 and are happy that it has proved to be so reliable. The automatic will open up another market sector to Iveco. Again, we’ll select target customers and put demos into their fleets to prove fuel consumption benefits, operational suitability and lowest cost of ownership.”

The onslaught continues with a 6×2 version, which is currently entering its testing programme before being released to market in early 2017.

“Mechanically the 6×2 is exactly the same as the 4×2, but with the addition of an air-suspended tag axle. It will be 13,9-m long, with 80 seats, and will be launched with both transmission variants,” explains Karshagen.

“The Iveco strategy of delaying time to market to get the development right, and focusing on full durability testing at Gerotek, is really paying off,” he adds. “We’re selling proven products. It’s been a tough task, but the results are starting to show.”

Another factor aiding the company, Karshagen says, is its after-market service partners.  

“It’s imperative to have good partners for future success. The first sale is made by the sales team, and the rest by the aftersales team. It’s a factor in any market, and especially important across the border; because of distance our partners can’t wait for a customer to break down before they order parts. That level of service is what will determine future success.”

Incidentally, Karshagen notes that Iveco plays a significant role in the right-hand drive southern African markets, and is doing well – especially in Zimbabwe.

What about making those future sales in a South African market that’s not showing any significant growth, but remaining stable at 1 100 to 1 200 units a year?

“To grow we must also help the customer trade out older buses to get our vehicles into their fleets. Bus Centre is our partner and is an approved Iveco used bus dealer. It is an expert at valuing and reselling these buses,” says Karshagen.

Despite the intricacies of the South African market, Karshagen is optimistic about the future of Iveco Bus. No doubt this time next year, when the automatic and 6×2 models have established themselves, Karshagen will have an even bigger grin on his face.