AT: MAN is better known for their buses in Thailand and Singapore (for instance). What are you planning to do to strengthen the truck segment? TH: This is right, and in addition we are very strong in Hong Kong with the buses. You are also right that we have to catch up in a number of markets for the trucks. I see this as an opportunity as we can grow, and we have the luxury of having the best product. While everyone says that, we can actually prove it. This is not just about the trucks, but also about how we are organised. It is about how our network is organised, how we treat our distributors and clients. Here we have a clear vision and strategy and we will implement new procedures; train people and we will need to increase the footprint in the market. Coming up with competitive pricing is one issue. You need to have CKD options to be competitive.
I expect us to be in a leading position within the next three years. Yes, there are some obstacles, but I am confident that we can get there. We have managed to increase sales from 150 to over 1 000 units in Korea. I am sure we know what to do.
AT: What are your plans for the service network? How are you going to address the needs of the market in Thailand now that you are severing your ties with your partner? TH: There are two dimensions to it. The first is the importer level. I think we are already in the right countries, but we need to improve the service of both, the own subsidiaries as well as the private dealers. What we need to do next is to map out a plan for each country. Within five years, we want to have the number one network.
In Thailand we have realised that you need to be very close the customers. Running ten different businesses does not allow for this customer focus. That is why we have decided to become the importer ourselves. At the same time, in Thailand, you need to be local and we will continue to work with local partners for both, the sales side as well as the after sales. We have identified locations for our service network and have found suitable partners. We are now rolling this out and our customers do not have to be afraid that they will not get the support they require. We have existing partners and we will continue working with them, strengthening them. That said, we will only keep a small number of dealers.
AT: Now that we addressed the facilities, how about spare parts and uptime? TH: Our central warehouse is in Germany and even with airfreight we would need several days to get them here. Hence, we need to ensure that we stock enough, and the correct parts here in the country. When I was responsible for after sales in China, I asked for a daily report on spare parts availability. Just looking at them, however, is not good enough. The availability needs to improve. Naturally, you cannot achieve 100 percent, but you need to keep it at 95 percent. Following that, you look at the stocks that the dealers keep. That way, you can have parts send to anywhere in China within a day.
And now you walk in the shoes of the customer. If you cannot provide the parts, then your trucks are not running and that would give the MAN brand a bad name. Now, my after sales manager sits right next to me here in the office. We are now looking for a location for a central warehouse here and his KPI is very simple: 95 percent parts availability. This will not be done overnight, but eventually we will get there. And that is a promise that I want to make.
AT: Will we see any enrichment of the product portfolio, especially with low consumption vehicles? TH: I would say that this is the very definition of our trucks as they are very fuel efficient. That is one of the tasks for our engineers as we want to have the most fuel efficient and most reliable trucks in the market. We need to remember that a difference of a few percent in fuel consumption is translating into a huge savings over the year.
Every truck that arrives here is equipped with the latest technology, just as we are selling them in Europe. The only difference is in the homologation for the emission norms, as the applicable standards still vary vastly.
While others might opt for local assembly, there is a danger that the quality will suffer. If you produce a small number of vehicles, with locally sourced parts, you cannot keep the quality level up as you do in the home market. For us, we do not compromise on quality. At the same time, we are looking at the import cost for CKD sets, too.
AT: What are the challenges you anticipate for this area? TH: To be honest: a lot! There are local issue and overarching challenges we need to tackle. Firstly, it is about the products, which need to be adjusted to the local markets. That concerns wheelbases, length, height and others. These adjustments need to be made and they actually have a huge impact on the customer’s business. This is a difficult task, but we will be able to respond to this with our local product planning team.
The next thing is then the network. We have to improve in about all markets. MAN has to improve in terms of both, quality and quantity, whereby the latter is even more important. It is our duty to ensure that anyone repairing a truck or bus is qualified to do so and we have already started to up the training quantum.
The third issue is the brand perception. German products are well known. Our advantage is that we can draw upon this positive perception of these brands to build our brand. If you ask anyone in Germany if they know MAN, they surely will. Out here in Thailand, hardly anyone would know the brand. Even in our industry itself, where many know the MAN brand, the name is not as well known as we want it to be. It has even noted that even those that know the brand have a different perception of it or a wrong understanding of it. They may have the wrong knowledge, which is purely our fault, not theirs. MAN is a company with over 260 years of history. However, here we have only been for a relatively short period of time compared to that. Hence, improving brand visibility, brand recognition and brand reputation is a clear focus here in Asia Pacific.
What we can see is that the Thai market is dominated by Japanese brands. However, we see that these brands are competing on price. In Europe we see that the customers have a different approach and requirements. There, reliability and the services surrounding the truck are more important than a low cost to invest in trucks. Take e-commerce for instance: you have to deliver on time. Otherwise you will not be in business very long. This is an opportunity for us as the requirements of users change here as well. Our customers cannot afford to have unreliable trucks, and this is where high-quality vehicles are needed, and European trucks will be the stars. This is not just applicable to Thailand, but all over Asia.
AT: As many countries are connected by land, what is the status of the connectivity for trucks? TH: MAN is leading in terms of connected vehicles. In Europe we have a fleet of connected trucks, which are in operation every day. They are connected by a specially connected and secured internet and they are operating as a platoon whereby you don’t need the drivers in the second or third vehicle. It is not so much a problem of the technology, but one of legislation. But clearly, MAN is the leader in this field.
AT: In your view, what is the single most important thing that the government(s) should do. TH: It is the creation of a single ASEAN market in terms of logistics. It should be possible to easily drive a truck from Singapore, with Singaporean registration through China or even to Europe, then we have achieved something. There is no problem to drive from the Netherlands to Russia. Everything is clear: registration, insurance and how summons are being enforced. This is what we need here, and it must start in south east Asia.
Also, a very important point for me is to create a “real” ASEAN. There is one, in theory. But if you are now producing goods in one country, you should be able to export this into other countries. However, today there are obstacles, like import quotas or CKD requirements that differ from country to country. In Indonesia you would need a local partner for CKD production as one example. These restrictions impact the truck and bus makers as they are small producers.
AT: If you could sum up the direction you are taking for MAN in Thailand? TH: Very simple: A straight line. A straight line up in terms of sales, customer satisfaction and employee satisfaction.