Could Isuzu go it alone?

When Yoshinori Ida, chairman of Isuzu Motors, recently visited South Africa, he granted one exclusive interview – and that was with FOCUS. During our chat, he revealed some fascinating information, especially in terms of Isuzu’s future in South Africa…

FOCUS: Isuzu Truck South Africa really cleaned up at the WesBank-sponsored FOCUS on Excellence awards banquet – congratulations on that! To what do you attribute the success of the brand in South Africa?
IDA-SAN: When you and I chatted three years ago, I told you that we were aiming to obtain the number one position in South Africa. We are a little bit short. But we are almost there. The goal is reachable and in sight. One of the biggest reasons behind our success at the awards and our achievements in the market is the establishment of Isuzu Truck South Africa (ITSA). Since the establishment of ITSA, communication between Isuzu, its customers and dealers has improved dramatically. As a result, Isuzu Japan has significantly more information available from South Africa. The distance between South Africa and Japan has narrowed. The responsiveness has improved tremendously. We are doing a better job of meeting customers’ requirements and remedying any customer complaints in the shortest possible time. We are also receiving more information from South Africa when it comes to engineering and planning, and the product range that we offer here has increased quite significantly. At a dealership level, the biggest effort has been made in terms of the betterment of the workshop facilities. Because of ITSA’s recommendations, the dealers are carrying optimal parts inventories on site. That obviously gives a better service capability to our customers, which has earned the trust of our customers.

FOCUS: Does Isuzu have any tie-up with Indian or Chinese manufacturers to make or distribute cheaper trucks throughout Africa? If so, what are these tie-ups?
IDA-SAN: We already have a long history of having a presence in China – ever since 1985 we have had a joint venture called Qingling Motors. We have also been in India since 2004 on the bus front and our joint venture there is called Swaraj Mazda. So we have a very good position in those two countries. We don’t have any plans to bring cheaper trucks or buses to Africa to compete against the Chinese or Indians here. We know that they are serving the same customers – sometimes at half the price… sometimes at one third of the price! We are always mindful about how we could bring in the most befitting product for this particular market. We will not be entering a price war with those Chinese manufacturers in South Africa. We could tell our joint ventures to make products as cheaply as possible and send them over to South Africa. That would be an easy thing to do. But we don’t see a future for a strategy such as this. The question here is always: what do people expect from Isuzu trucks? We believe that they want a vehicle that they can trust and technology that they appreciate. A truck has a very long life and it is usually around for more than 10 years. During the life of the truck, how much mileage does the truck do and how much cargo is carried? What is the value that operators are generating over the truck’s lifespan? Customers are using our trucks because they trust the value that our truck delivers. It does not fail their expectations.

FOCUS: What plans do you have to introduce “green” vehicles?
IDA-SAN: Isuzu has been one of the frontrunners in meeting emission regulations around the world. As an example, when Europe introduced Euro 4, we were one year ahead in terms of introducing Euro 4 powertrains. We have new long-term emissions regulations in Japan, and these regulations are tantamount to the most severe in the world. We have passed those with flying colours. We are the first Japanese manufacturer to introduce EPA 10 compatible vehicles in the US. We outpaced all other truck manufacturers in this regard. So we have a very high standard when it comes to eco-friendly technology.

FOCUS: So you believe “green” vehicles are a priority?
IDA-SAN: Absolutely. Mother Nature only has a limited amount of resources available to us. In 60 years, the oil will be depleted if we continue using it at the current pace. So what is required is the introduction of the most fuel-efficient powertrains. One of the solutions is the rationalisation of the size of the powertrain – we are producing smaller engines which are more fuel efficient. We are doing this across the full line-up of trucks. In this regard we will gain other benefits too, such as weight saving and more space for cargo. We already have a diesel hybrid and a plug-in hybrid will be introduced in Japan next year. We are looking at two different types of electric trucks. We are also investigating in-wheel motors for buses. We already have a prototype of this vehicle. We can make the ground clearance lower and the height of the vehicle can be lower. This is ideal for a mass transport bus, which can have ground level entry for easy ingress and egress. The future of transportation – with all these technologies in the pipeline – is very promising.

FOCUS: In the heavy/extra heavy sector in South Africa, UD Trucks is doing well but Isuzu is lagging behind. What are you doing about this?
IDA-SAN: Back home in Japan we are number one in this market. UD Trucks is doing a better job here because they have been focusing on this segment for longer. Now we intend putting in the right amount of money and resources to offer a more comprehensive product range, including the heaviest of the extra-heavy product range.

FOCUS: So we can expect to see new extra-heavies coming soon. What about other sectors of the market?
IDA-SAN: We have extremely aggressive plans to expand our product range across all sectors; we will be rolling out a lot of new products.

FOCUS: What are Isuzu’s investment plans for Africa? How strong is the General Motors South Africa (GMSA)/Isuzu tie-up? Is there any chance of Isuzu ever going it completely alone in South Africa?
IDA-SAN: As a manufacturer, it is natural to think that, once we get to number one, we could invest and manufacture our own products. This is a future issue and we will be talking to our partner, GMSA, going forward. If the situation calls for it, we would think of establishing ourselves here on our own. We are entrusting the assembly of our trucks to GMSA right now. We also have ITSA, a joint venture between GMSA and Isuzu, which has delivered tremendous results. But GMSA’s strength lies in passenger cars. If that company’s expertise doesn’t fit with what we are hoping for, we could establish our own presence. Having said this, going forward, this is something that we have to start talking to GMSA about.

FOCUS: GMSA will be introducing a Chevrolet pickup next year. Where does this leave Isuzu, who have no global equity links with GM anymore?
IDA-SAN: We saw the new model the day before yesterday and it’s a completely different class of vehicle. It is more of an entry-level type of vehicle. It is not opposition to the KB.

FOCUS: What effect will Toyota’s (small) shareholding have on Isuzu in the future? Will there be any alliance with Hino?
IDA-SAN: Toyota has 5,9% of Isuzu Motors. In Japan there are only four major players: Isuzu, Hino/Toyota, UD Trucks and Fuso. Three companies have more than 70% of the domestic share, namely Isuzu, Hino and Toyota. UD Trucks and Fuso are already trailing far behind. Their shares in Japan are declining and there seems to be no stopping this decline. They seem to lack the resources and capability to make their own engines; they do not have engineers to take care of the important heart of the truck. They don’t have the product that can meet future requirements. People say… “You two – Hino and Isuzu – dominate the market. So why don’t you tie your hands together?” But the employees of both companies would like to keep on competing against each other. At this moment it is quite hard for us to think of making a decision to tie the knot with Hino. However, when it comes to componentry sharing, such as under-bodies… yes, we will continue sharing technology. And we will continue to co-operate on the bus front. We will work together to attain better efficiencies. But we will continue to compete.

FOCUS: The KB has already been around for a number of years. When will the new KB be launched in South Africa?
IDA-SAN: The first prototype was lined off at the end of September in Thailand. This is a very handsome looking, sharp pickup. I strongly believe that it will attract new customers. We will be building it here in South Africa at GMSA. We are currently discussing the roll-out plan with GMSA. (GMSA has subsequently confirmed a launch date of 2013. Ed.)

FOCUS: Finally, the commercial vehicle market in South Africa is extremely competitive – and there are a number of excellent products on the market. Why should a transport operator go the Isuzu route? What do you offer that your competitors don’t?
IDA-SAN: It is a combination of two factors: the product itself and the dealers’ capabilities. When we talk about the product, we obviously have all the advanced technology being built into the vehicles – eco-friendliness, light weight and fuel efficiencies. The virtue of the product alone cannot see us win the war for the customers’ chequebook. It is the combination of the product and the aftermarket service and the parts availability, offered by the dealers. As long as we have those overwhelming strengths at the dealers and the unmatched virtues of the Isuzu trucks, we can offer an irresistible package to customers.