Survival of the fittest!
I’ve said it before and I’ll say it again: this industry has never been one for sissies – and we’ve always coped. But … yikes! Recent developments within our country have left me feeling apprehensive, to say the very least. Having said that, we’re determined to hang in there – and at least one other captain of industry shares my sentiments …
Torbjörn Christensson, president of Volvo Group Southern Africa, came across as the calmest man on the planet at his annual media conference – despite predicting a tough 2016. “A combination of macroeconomic factors, including a weak exchange rate, pressure on inflation and interest rates and low business confidence levels, contributed to a decline in local truck sales during 2015. With the South African economy predicted to grow by only one percent during 2016, we expect the local truck market to be in for another challenging year,” Christensson explained.
Surprisingly, however, he was quite matter of fact about the sad situation in which we find ourselves as a country. “There are worse places to be – such as Angola, where the market is 94 percent down. That country’s gross domestic product (GDP) is totally oil dependent and, with the drop in the oil price, the economy has collapsed,” he related.
Maybe he’s relaxed because the Volvo Group had such a good year, enjoying a 15-percent share of the South African Development Community (SADC) truck and bus market, selling 4 563 units.
In the extra-heavy commercial vehicle segment, Volvo Trucks and UD Trucks both managed to increase their market share within the SADC region. Volvo Trucks moved up from fifth position in 2014 to third in 2015 (1 822 units, 13,6 percent market share), while UD Trucks claimed the fourth spot, up from seventh in 2014 (1 316 units, 9,8 percent market share). Renault Trucks sold 112 units during 2015.
According to Christensson, the Volvo Group is also the leader in the truck-tractor segment within the SADC region, with a 30 percent market share.
Of course, that’s all history now. How will the group keep its head above water this year?
“I strongly believe that you have to be service orientated and, if you get that right, your customers will stick with you through good and bad times,” said Christensson. “I believe that this has been one of our group’s strong points over the years.”
Second, Volvo will focus on cost efficiencies. It has already shed ten percent of its workforce – and the emphasis on keeping costs under control will continue. “We have taken several steps to make the company more efficient, profitable and viable for the long term,” said Christensson.
Third, there will be increasing emphasis on cross-border trade. During 2015, the company was assigned increased responsibility for the entire 21-market southern and eastern African region. Christensson said that some African markets – Ethiopia, Tanzania, Kenya, for instance – hold some promise. They won’t make up for the South African market, which will be stagnant at best, but at least that will prop up volumes somewhat.
In order to service these markets, Volvo will appoint new importers in Ethiopia, Zambia, Kenya, Tanzania and Uganda.
The company will also introduce new enhancements to its current product offering, including new specifications for the Volvo FH and FMX ranges. UD Trucks will also launch a new heavy commercial vehicle range later on in 2016. The UD Quester range will also be introduced into Africa from the first quarter this year.
Finally, Christensson believes the quality of the Volvo Group employees bodes well for a reasonable 2016. “I have the privilege to work with some of the most experienced, skilled and passionate people in the industry,” he said. “We remain committed to the success of our in southern and eastern Africa. In tough times strong companies get stronger. We are looking forward to this year, but we will have to roll up our sleeves. There will be ups and downs and we will handle it,” he said.
I feel exactly the same way about my FOCUS colleagues: I work with a wonderful team of people. Is this year going to be tough? Sure. But we are going to hang in there and ride it out! Please join us on our journey …