Emerging from the pandemic with record sales, Hino has found an approach that ensured sustainability during a global crisis. Managing Director of Hino Motors Sales (Malaysia) Sdn Bhd (HMSM),Atsushi Uchiyama, discussed with Asian Trucker how the brand managed to not only stay relevant, but to enhance their brand value in such tough times.

AT: Last year you have posted a sales record and a record in service intake. Why do you think people spent more on their trucks last year?
AU: What I notice is that passenger cars have also seen record sales last year, which can be traced back to the SST exemption. When we are looking at commercial vehicles, the situation is different. A lot of vehicles sold last year where from the backlog of the previous years. During the lockdowns in the years 2020 and 2021, there was strong demand for trucks, as a result of the increased need for transportation for courier services and to support online shopping. Even in lockdown, people still need food. However, due to the MCO (Movement Control Order), we could not operate as usual and even had to stop production for several months. In summary, we had high demand, but could not satisfy it.

Generally, Malaysia is a very strong domestic market and the demand for trucks has always been high. To support the truck owners, we have also initiated a number of activities. HINO believes that one can not just sell the vehicles without having supportive activities to accompany the sales. A new warranty program covering our trucks for five years was launched in 2020. In addition, we launched a membership program which gave our customers access to an extended warranty of up to seven years and special promotions and parts, for instance free brake linings.

All our vehicles are now also equipped with telematics. Customers might be busy and not notice that the vehicles are due for service. Based on this insight, we have implemented the position of CSO, Customer Satisfaction Officer, in all our dealerships. This dedicated person will utilise the telematics data and call the customer whenever a service is due. Thanks to these initiatives, together with the increased sales of our trucks, lead to the increase in service intakes.

AT: What were the key factors for staying successful whereby no staff left or was made redundant during the pandemic? What made them stay and how come you did not downsize as that is an easy option to counter a crisis?
AU: We need to look again at the market conditions during the pandemic. Hino is a leader in light and medium duty commercial vehicles, and these were in high demand during the crisis, as we mentioned before. This meant that we managed to continue selling trucks, thus keeping the cash flow going and people busy. Plus, we have between 60 000 to 100 000 units on the road, which still needed to be serviced. Customers would come back to us for their regular inspections, thus again requiring us to keep the headcount and adding to the cash flow. Hino group has a policy that we do not retrench people, as they are our most important assets. Whenever one has to train new staff, it is a lengthy and costly process. Hence it is better to retain staff for when business booms again as one then has the right resources.

AT: Hino is upgrading dealers across Malaysia to 3S outlets. What is the rationale behind this move?
AU: There are only three or four 1S dealers left in our network. There is a good reason to upgrade to being a 3S outlet: margins on vehicle sales alone will not be enough to sustain a business and it is the follow up jobs will make money for the 3S outlets. Upgrading from 1S to 3S is allowing dealers to forge long term relationships with clients and this way have a more sustainable business. While we encourage our dealers to upgrade to become 3S outlets, we will not force them. From our data, we can tell that it is a beneficial move, however some are happy just selling the vehicles. And it is those dealers that we also have to thank for as they have put all these vehicles on the road that I mentioned before, those that we now serviced during the pandemic.

AT: Your tenure here is an interesting timing: you have seen Malaysia pre-pandemic and all through it, then the recovery. How has the market changed in your view?
AU: What we see is that customers are much more conscious about cost. This is in two parts: firstly the vehicle itself. Many transport companies are under pressure to drive down cost. A lower price for the truck is one way to achieve that. Beyond that, they are looking for ways to reduce cost in the operation of the trucks. Here we see that our customers are becoming more sophisticated in pinpointing where there are opportunities to find extra money. This is not just a Malaysian issue, but a global one.

For instance, customers are looking for ways to reduce the money spend on maintenance. An easy way is to buy non-genuine products. However, we know that this is a fallacy as such parts are typically not as good as the original parts we sell. Our customer will find that the uptime is much better with genuine parts than with counterfeit parts for instance and that they make more money using our services.

For this year, we are going to focus on another activity that is aimed at delivering the best value for our customers. Traditionally, one would look at sales figures and service intake. However, we want to get away from that, comparing the perception of our service network with that of our competition. Sure, we need to plan and thus sales numbers are important, but such number does not reflect the satisfaction of a buyer. Called “Best in town” we will evaluate dealers based on the criteria such as employee satisfaction and benchmark against the network of our competitors in the same area.

AT: What is your view on the implementation of e-mobility in Malaysia?
AU: The Malaysian government has made it clear that the approach is to first introduce and promote the introduction of electric buses first. It is generally acknowledged that the charging infrastructure would have to be implemented first. What we can expect is that Klang Valley will be the first area to be equipped with charging stations and then it will expand into other business centres.

We realise that we need to do more than just sell vehicles. For instance, we might be dealing with the buyer, the owner of the truck, but we may not have had any contact with the user, the driver. Hino Malaysia wants to change that by having on-boarding processes in place for drivers, and also organising more professional handovers. This will go hand in hand with a standardisation of our service delivery across all network partners. We acknowledge that this is a huge undertaking, but it will be beneficial for our customers.

In Japan Hino has introduced an e-truck for last mile deliveries last year. It is our home market and we will need to learn about electric trucks and how they can best be used first at our doorstep before we start offering them in other markets. Hino needs to gain experience first before we can confidently offer such vehicles here for instance. Currently, we have clients that want to experience this kind of new vehicles, but we have to ask for patience.

In the meantime, Daimler Truck, Mitsubishi Fuso, Hino and Toyota Motor Corporation concluded an MoU on accelerating development of Advanced Technologies and integration of Mitsubishi Fuso and Hino Motors.

AT: You added the 200 Series to the line-up. How has the response been?
UA: By now, we have received orders for about 100 units of this vehicle. It is an interesting option as it suits the new needs of transporters for smaller vehicles, perfectly fit to handle the last mile transport and missions that derive from online shopping, due to a shift in consumer behaviour. Unfortunately, we are running at full capacity in our assembly plant and those that have ordered the Hino 200 series trucks will have to wait a bit.