It is fair to say that MAN Truck and Bus was on the brink of a barnstorming 2020 before the COVID-19 pandemic took the wind out of the sails of the industry.
For many, few manufacturers can compete with MAN’s heavy truck technology, so there was a great deal of interest when it finally entered a new truck generation into the market at the start of the year.
Even with the threat of the emerging virus looming large, MAN look set to build on a successful integration under the TRATON Group umbrella. Here was a complete revamp which had seen it merge its own heavy duty experience with the best of fellow group member’s Scania’s modular approach to development. Many observers also felt 2020 was going to see the German brand reap the benefits of leaning on Volkswagen’s van knowhow with it accelerating its movement in the last mile, ecommerce era through the large panel TGE.
A full six months on from the launch, Jörg Mommertz, SVP, head of sales area Middle East, Africa & Latin America (MEA&LA), MAN Truck & Bus SE and Managing Director, MAN Truck & Bus Middle East FZE, paints a picture of a company that has persevered through one of the most testing periods for the industry with the adjustments it has made making him hopeful for a future.
“We started excellently in terms of business at the start of 2020. The first two and a half months went very well. It has been tough, but I’m hoping there’s going to be some shards of light coming through the clouds,” he begins.
As his job title suggests, Mommertz enjoys an international perspective on how COVID-19 has affected the industry. The pandemic may have shortened the time in the air for a role that asks him to cover the Middle East, Latin America and Africa but it hasn’t dulled his razor-sharp analysis of what is happening in the field.
“I have never seen such a market decline – globally – in such a short time. It’s such a steep decline in markets and while there is a slight increase in market demand giving an outlook from today until the end of the year will not be wise because the local situation is changing every day.
“We have been very flexible in supporting some customers. One example is their repair and maintenance contracts. Some customers have not been using the truck for two or three months, so we have agreed a grace period; helping the customer to overcome the critical situation. This was really appreciated by a lot of our customers (in South Africa).”
Looking across the region’s he is responsible for, Mommertz suggests the data and fundamentals remain strongest in the Middle East where government spending on infrastructure remains a priority.
“Giving a projection for 2021 is a challenge today but we have been in the truck business for a long time and are always optimistic but also realistic. The Middle East is still reflecting as the most stable business for us. We have had hits from the oil price on the development on countries like Saudi Arabia but I see the outlook being mostly stable and positive. The governments still want to invest in infrastructure and public transport where I still see some interesting projects ahead for us.”
“Let’s say we are in line with the market trends. We are defending our market position; we are getting very close to our customers and this is giving me the confidence that – if the economy is picking up – we can satisfy our customers in the way we could as before covid-19.”
The emergence of Asian manufacturers – with the South Korean and Chinese leading the way – has made the African market one of the most keenly fought over in the last decade. MAN is able to boast South Africa as a major stronghold and it remains the brand’s crucial point of attack on the continent. Mommertz says that the company has also been exploring new markets throughout the crisis.
“In Africa, we have a different situation to the Middle East. In South Africa we are doing very well and defending our leadership in the bus market and we have also stabilised also and defended our market position in the truck business. The orders intakes in the last week’s are giving me the confidence that we will have more stable outlook for 2021,” he explains.
“We also have different spots of business in other markets doing well. In Morocco, Togo and other countries there is demand…Morocco had a tough hit from COVID-19 and there was a long shutdown, but the outlook looks good. In the more tourist-focus countries, the coach business is similar to Europe and is more or less down but the truck business, with national distribution networks developing and construction, it is picking up fast.”
While Africa has traditionally been a destination for used trucks from the Middle East, analysts believe we could start seeing an increase in demand closer to home with financing tight and fleet operations under pressure. Mommertz argues that going ‘new’ still represents the best value in the long-run.
“Of course, there are always differences from market to market depending on the development of the country, but in Europe, we have seen a thrust in the pick up of truck orders. Outside Europe is a different pandemic situation and the downturn may last a little bit longer. They was a strong downtown in the used truck business as well. I don’t see a used truck as a long-term alternative for a highly developed professional customer.”
You can read the full interview with Jörg Mommertz in the October issue of Truck & Fleet Middle East
