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Tuesday February 19, 2013 MYT 12:00:00 AM
Saturday April 20, 2013 MYT 3:41:32 PM
by nevash nair
It is Europe versus Asia when it comes to the heavy-vehicle industry in Malaysia, a competition that is benefiting the growth of the economy
FOR thousands of years, the Silk Road facilitated the movement of goods like silk, spices and porcelain, over land between east and west.
Today, in the 21st century, something similar is taking place, with modern manufactured products made in the east being moved to markets in the west.
Despite the importance of maritime and aviation transportion on this new version of the Silk Road, road haulage has always been a critical component of the movement of goods.
With global trade increasing, despite the occasional economic hiccup, truck companies are looking to capitalise on rising demand for their products.
Many of the truck companies in Malaysia are already improving their 4S (sales, service, spare parts and systems) centres here.
In the past European manufacturers had a choke hold on the truck industry, but increasingly Chinese truck makers are starting to make their presence felt.
MetroBiz takes a closer look at the local truck industry in this two-part feature. We start with the key European manufacturers in Malaysia.
Volvo trucks are assembled in Malaysia from completely knocked down (CKD) kits from Sweden and the company is one of the most popular truck brands in Malaysia.
According to Volvo Group Trucks Malaysia president Mansoor Ahmed, the company had a “fantastic” year in 2012 and it is not showing any signs of slowing down.
“In 2011, we decided that we wanted to be firm leaders in the prime-movers category. We stepped up our game and within seven months, we managed to surpass our targets,” said Mansoor.
In 2011, Volvo trucks had 32% market share and by end of last year, they increased it by approximately 11%.
The company believes that this year will be a positive one for the industry, with lead indicators showing positive growth signals.
“Malaysia is growing significantly and it will be an important market for Asean. We are also enhancing our business to match the growth,” said Mansor.
Volvo trucks plan to increase its dealership network throughout this year.
“Gebeng (in Pahang), Terengganu and Sibu, Sarawak will have new dealers by mid-year. We are also looking at Bukit Kayu Hitam, Klang and Ipoh,” he revealed, adding that the company will have approximately 15 dealers in total in Malaysia by end of the year.
With the planned growth, Volvo is looking squarely at the cross-border transportation of goods between Singapore, Malaysia and Thailand.
Volvo Global also recently signed an agreement with the Chinese vehicle manufacturer Dongfeng Motor Group Co Ltd (DFG) to acquire 45% of a new subsidiary of DFG, Dongfeng Commercial Vehicles (DFCV), which will include the major part of DFG’s medium- and heavy-duty commercial vehicles business.
According some industry experts, this partnership is necessary given the exponential growth of Chinese vehicle manufacturers, especially in this region.
Scania, another major European truck manufacturer in Malaysia, had a very promising year in 2012, with 350 units built.
The goal is to surpass that figure despite a slowdown in the industry globally.
Order bookings in Asia decreased compared to the previous quarter, mainly due to markets in the Middle East, said Scania president and chief executive Martin Lundstedt earlier this year. But he is bullish that the company will bounce back.
Lundstedt pointed out that the new markets that Scania has entered over the past 10 years account for 10% of the company’s sales today.
He also sees great potential in various emerging markets such as China and other Asian countries that an enormous need to improve the efficiency of their logistics systems.
“We foresee an increased need among our customers for services during the entire life cycle of vehicles, enabling them to be utilised in an optimal way for increased profitability and reduced environmental impact. Solutions such as Ecolution by Scania represent a great opportunity to strengthen our sales of service-related products,” Lundstedt said in a media statement.
And Scania Malaysia is in the heart of the growth area.
“Our plant in WestPort, Port Klang, can produce more than what we did last year,” said Scania South-East Asia regional product centre general manager Francois Baudrais.
Scania prides itself on a network of 16 physical service points in South-East Asia and will continue to invest in this division.
When asked about the potential onslaught of Chinese manufacturers in an already competitive indusstry, Baudrais said, “We strive for continuous improvement and our customers are well aware of that. We have a long relationship with our customers and they know we are reliable. We don’t look at what our competitors are doing.”
Industry expert Stefan Pertz said Malaysia has the opportunity to capitalise on the trucking boom with the trucking companies competing with one another.
“I expect double-digit growth for the trucking industry in Malaysia,” said Pert, who is organising the inaugural Malaysia International Bus, Truck and Components Expo 2013.
The exhibition, which will be held at the Malaysia International Exhibition & Convention Centre (MIECC) in Kuala Lumpur from June 13 to 15, is Malaysia’s only international-scale business-to-business trade exhibition focused on the commercial vehicle market and its supporting industries.
It is the first ever exhibition in Malaysia that specifically cater to the needs of the regional commercial vehicle industry and serves as a comprehensive platform for truck and bus manufacturers, equipment suppliers and service providers to be kept abreast on the latest features in the industry.
Statistics on the Malaysian commercial vehicle industry revealed that the 50,098 heavy vehicles were sold in 2005. This is projected to increase by approximately 38% to 69,302 units in 2012, a compound annual growth rate (CAGR) of 4.7%.
With room to grow in the local market for trucks, it’s no surprise that most major players want to be in Malaysia.
In the last decade, Chinese manufacturers such as Dongfeng and Sinotruck have been making their presence felt in Malaysia.
*Next week, MetroBiz talks to Sinotruck and Dongfeng about their interest and plans in Malaysia.
Tags / Keywords:
Community, News, Business, Automotive, trucks, Scania, Volvo
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