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Monday, August 2, 2021
Home Features Features T&F Conference UAE: “We are back to life," say OEM Roundtable experts

T&F Conference UAE: “We are back to life,” say OEM Roundtable experts

OEM experts from Daimler CV MENA, MAN Truck & Bus Middle East, Scania, Schmitz Cargobull and UD Trucks discuss the state of the industry in 2021, and beyond

Standing tall, a question is fired over from Engineer Fahed from Abu Dhabi Waste Management Centre to a panel representing many of the world’s biggest commercial vehicle manufacturers. Asking about the direction of local manufacturing, he both addresses the gathered experts and sums up where the sector is heading as we pass the mid-way point of 2021: “Finally, we come back from a virtual life to real life.”

It has been a protracted return for the Truck and Fleet Conference UAE, after the which mixes time in the hall with demonstrations and test drives of new trucks faced a COVID-19-enforced delay. The OEM Roundtable proved that it has been worth the wait.

Moderated by Vishal Pandey, partner – Automotive and Mobility Business, Glasgow Analytics Consulting Group, the panel featured heavyweights from the local supply chain, including: Olaf Petersen, general manager – Truck Sales, Daimler Commercial Vehicles MENA FZE, Erik Bergvall, managing director, MENA, Scania, Joerg Mommertz, SVP & head of sales, Middle East, Africa & Latin America, MAN Truck & Bus, Mourad Hedna, president of UD Trucks Hub MEENA and Fabian Bahlmann, managing director, Middle East & East Africa, Schmitz Cargobull. For all, the session was an opportunity to share how they had stood firm in a challenging year.

Erik Bergvall is responsible for Scania’s operation in the region and he explained that he believes there have been positive outcomes for the Swedish manufacturer and the way its local partners have worked with fleets during the pandemic.

“Having everyone work from home; learning more about our teams, and so on, has got us used to interacting with customers through digital media. I would say that this has opened up great opportunities to have more discussions with the customer,” he began. “We now have what we call digital value selling which is basically aimed at supporting the front line to our sales organisation in a better way through the regional office, with us bringing in expertise from the factory and competence into the discussions with the customer. Digital media opens up great possibilities in this regard.”

In his career, MAN Truck & Bus’ Joerg Mommertz has worked his way up the corporate ladder from workshop mechanic to overseeing the German OEM’s business across four continents. He described Covid-19 as a challenge but an opportunity at the same time.

“For us that means, living in the customer’s proximity. Using modern tools of communication has helped a lot to stay close to the customer. We are using these tools actively in our sales and after sales activities,” he said. “I also see a trend in the market for more customisation to ensure vehicles are fit for a customer’s purpose and help give him the best fit for his business.”

The supply chain, the movement of raw materials needed to manufacturer the trucks we see on the road, has suffered major disruption since the start of the pandemic. Mommertz said that the industry has been under price pressure from its suppliers in the face of rising commodity prices and the lack of availability of some materials such as semi-conductors:

“The entire industry is getting stuck in the supply chain a little bit. You will still see this backlog until Q4 and it could last a little bit longer.”

Like Mommertz, Schmitz-Cargobull’s Fabian Bahlmann describes himself as a truck man and he said that the trailer expert had seen a strong flow of orders since the end of 2020 amid rising demand in the refrigerated market as countries leaned into their transport network to survive.

“Last year, there was certainly a dip but it’s a very busy period in terms of production right now,” he remarked. “The pandemic really has brought a focus on more localisation and more quality into that field and we bring in some answers in terms of increased quality and safety – not only in terms of road safety but also by meeting international standards in hygiene safety that can be applied to pharma distribution in the region.

“Our challenge has been to be as close as possible to fleet owners in the region without traveling but we are happy to have a strong digital set up, not only in terms of consulting fleet but also on the after sales side. Workshops have been an important part for us throughout the pandemic to keep increasing the service level. The customer needs are changing.”

UD Trucks’ Mourad Hedna said that COVID-19 has been an opportunity to address the key priorities for the now Isuzu-owned company.

“I think it helps everybody to think again that nothing is granted and that health and safety is priority number one for everyone,” he commented. “And this helped us to reconnect more with our customers, to our dealers and to our partners. We put regular exchanges in place just to take care of check on families and colleagues. It was a good trigger to connect further in the network.

“Covid has helped to accelerate some transformation. You are now talking more about digitalisation. It was clear with telematics and the other tools that are available, that it was easier to connect to customers to talk about their application, even when there was no face-to-face contact.”

Prior to the start of the pandemic, Hedna said the UD was on track with its own ambitious growth strategy: “If I take the volumes for sure, the market was slower than it was before: there was a lot of uncertainty when it came to demand especially in the first months,” he recalled. “But the region was not the worst one to suffer. We talk about a 10-20% market slow down but it’s not as major as in some other parts of the world. Covid slowed down our ambition, but still last year we did better than the year before.”

Like Mommertz, Hedna believes that raw material and its availability is a big challenge for the industry to face.

“We used to have uncertainty of demand but now it’s a combination of uncertainty of demand and the supply,” he remarked. “In general, you expect demand but the supply not being there, or vice versa. So, this is the challenge that I think we are all living and we need to be really agile. We need to be entrepreneurial and to work hand-in-hand with our customers to better protect and to better serve them.”

Daimler CV MENA covers 19 countries in this region from Morocco to Pakistan and looks after the German automotive giant’s buses and its two major truck brands for the region: Mercedes-Benz Trucks on the heavy-duty side and MCV and LCV powerhouse Mitsubishi Fuso. General manager Olaf Petersen, who brought 23 years of experience with him into the OEM Roundtable discussion, described the global supply chain as currently vulnerable and under pressure.

“Covid-19 has shown that the supply chain is not as robust as we all think. We have huge delays in shipping and container handling, as well as longer travel times in trucks because borders are closed. We couldn’t have really imagined anything like this before because we only know the big crises (like this) from Hollywood films.

“We wouldn’t have thought that such a pandemic would hit us in this way. I think the world has become much more conscious in many aspects. We’ve seen that air travel was reduced tremendously and probably will not return to the same level again because businesses will go more for teleconferencing and for non-contact or non face-to-face meetings.

“I think this will also trigger the world, in terms of environmental concerns, and we have seen during the pandemic, a huge increase in Europe in electric vehicles,” he said, adding that this rise has partially been driven by extra incentives set by European governments.

“So for example, in Germany, coming from nearly knowwhere, we are now at 13 percent share for electric vehicles. This trend will most likely continue. So, we will see this electric drive and we need to be prepared for it. We have a clear roadmap on what we want to do.

“We launched the eCanter in the US, Europe and Japan in 2017 and now have four years of experience. We will launch the eActros in Europe this year and we will continue with more and more products coming. For instance, we will have a long-distance truck in 2024 and then we are moving to the hydrogen technology. So, I think zero emission vehicles will come and this will definitely be a challenge for the industry here.”

Elaborating on his point, Petersen predicts that the near-future for alternative drives faces relative uncertainty in the region compared to Europe and other markets.

“We will still see that internal combustion engines will continue to a certain degree especially in the bigger countries. I think in Dubai, electric vehicles would work fairly well. But if I think about Saudi Arabia and the bigger countries, the infrastructure will not make it possible to enable either electric or hydrogen vehicles in the short-term.”

Turning to what the legacy of Covid-19 could be for the industry, Mommertz said he sees one major positive.

“Transport and logistics has been declared system-relevant and it has helped us to improve the image of our business and our customers business globally. Road safety and related technical solutions will not be your USP for any single car or truck manufacturer but the standard in the industry… the key is still behind the steering wheel – the driver.”

He says Covid-19 will improve the image of drivers in the sector but merely investing and relying on technology is not enough.

“This is why we have a strong focus on training, education of drivers because this is one of the key elements in the future besides all the technological development. We have a strong focus together in partnership with our customers to develop the necessary tools and instruments.”

Bahlmann says that while the trailer firm is a vital part of improving fleet efficiency it also wants to drive safety.

“On the trailer side, safety is very often is considered a cost. We really want to link to an advantage for the customer side. We’ve increased, or implemented, for instance, safety Systems, like electronic braking systems (EBS) for all trailers that we sell in the region. We’ve set certain standards on the trailer side, but we understand it comes at a certain cost and to constantly drive safety as well as efficiency is a constant challenge.

He continued: “The trailer industry is a really raw material-focused business, so we try to be close to our customers to give them really reasonable prices for reasonable products. At the moment, there is a quite a lot of uncertainty on the supply side which generates a certain challenge for us to be reasonable on the customer side and we do this as good as possible.”

Customisation is a word that comes up often during their discussion and Joerg Mommertz believes there is plenty of room of improvement and growth in the region.

“Let’s say, in highly developed markets like Germany or Central European markets, highly developed markets, I would say 90% of the trucks are customised as a perfect fit for the customer’s purpose. In the Middle East, Africa and Latin America there is still a mixed stock built to order market but I see a trend towards customisation, let’s say in a degree of 50%.”

Read our complete coverage of the Truck & Fleet Conference UAE in the July issue of Truck & Fleet Middle East magazine out next week.

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Stephen Whitehttps://truckandfleetme.com/
Stephen White was formerly editor of Big Project ME.
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