Features

Daewoo trucks in demand in Saudi Arabia

By Jerusha Sequeira

Posted on July 28, 2015

New dealer Trans Arabian Technical Services is confident it can boost sales in the kingdom

PHOTO: Longstanding ties with clients helped TATS get customers to switch to Daewoo. Credit: Supplied

At this year’s Construction Machinery Show, held in Dammam, Saudi Arabia, one of the highlights was a new range of Daewoo trucks displayed by Trans Arabian Technical Services (TATS), a sister company to Saudi Diesel.

The display was significant, as it was the first major outing for the vehicles since the company signed an exclusive distribution deal last November, says Mustapha Addada, country manager of the Trucks Division at TATS.

The trucks have been well received in the Saudi market, and brand perception in the market is quite positive, Addada says in an interview with Truck & Fleet ME. “Most of the companies in Saudi Arabia, they already know Daewoo. Everybody likes the trucks.”

The value proposition of the Daewoo vehicles is hard to beat, he continues. “The combination of the engine, the gear and the differential is almost European standard with a Japanese price.”

The Tata Daewoo trucks are available in the Novus economic and Prima premium ranges. The Novus line-up includes cargo trucks (4×2, 6×4, 8×4 and 10×4); dump trucks (4×2, 6×4, 8×4); mixers (6×4 and 8×4); and tractors (4×2, 6×4). The Prima range consists of dump trucks with payloads ranging from 8-25.5t, tractor heads (4×2, 6×4 and 6×2) and cargo trucks (4×2, 6×4, 8×4 and 10×4). All the vehicles come equipped with FPT engines, and the Prima models are available with ZF manual or automatic transmission.

So what are the key advantages that TATS brings to the table as distributor for the Daewoo range? A main benefit, particularly for contractors, is the ease of meeting all equipment needs from the same group of companies. TATS’ sister company Saudi Diesel sells construction, lifting, power generation and concrete equipment from brands like Doosan, Mitsubishi and Everdigm. With TATS now providing trucks, this is an ideal combination for contractors, Addada notes.

“If a customer wants loaders or excavators for his project, he can also buy a dump truck at the same time and in the same deal. So the customer in this case will not [need to] go to many places in order to assemble his tools for the project.”

The company also offers financing options, with competitive terms for insurance and installments.

However, as anybody familiar with Middle Eastern culture can testify, a personal relationship with customers is crucial to getting business done. This is perhaps the most important advantage TATS has: longstanding ties with several clients played a crucial role in getting customers to switch to Daewoo. “The relationship between the owner and some contractors in the market is not new, it is for the past 30 years. So they don’t work only on the basis of money and paperwork. They just trust each other, and this boosts our sales.”

He provides an example of a Saudi Diesel customer for Doosan equipment who was buying his trucks from another brand. Once TATS acquired the distribution for the Daewoo range, it was easy to get him to consider making a switch.

After-sales

Apart from purchase price and total cost of ownership, after-sales service is a key consideration for most customers looking to buy a fleet, and is naturally a focus for TATS.

“In the after-sales market, we are planning to do service on-site, unlike most companies, which do the services in workshops. We will only bring the trucks to the workshop for overhauling and major work.”

Saudi Diesel and other sister companies already offer service contracts, but TATS is yet to do so for the Daewoo truck range, as most customers tend to have their own workshops. However, Addada notes the firm is set to begin offering contracts soon.

Moreover, once the vehicles have been purchased, training is carried out at the time of handover for the customer’s drivers and mechanics. The first service is carried out on the client’s premises and the customer’s technicians are trained in servicing the vehicles, with additional support available from the dealer if required.

Growth prospects

Currently, the most demand TATS has observed for the Daewoo vehicles in the Saudi market is for tractor heads and dump trucks for the long haulage and construction industries. The vehicles are available in payloads ranging from 15-45t GCW, but 40t and 45t models are the most popular in Saudi Arabia.

Even as the oil and gas sector slows, construction is stronger than ever in the Kingdom. TATS currently sees the most opportunities in infrastructure developments like the Jeddah and Riyadh metros, as well as various Saudi Aramco projects. “Of course, with the oil prices going down [business] has suffered a little, but it will not go much longer. The Saudi market always picks up fast.”

Apart from the oil slump, another challenge the dealer has faced is global currency volatility. The weakening of the yen and euro has led to more intense competition in the market as other brands slash prices. In response, TATS is continuing to take stock of market conditions and customer expectations, Addada says.

Although business for the Daewoo trucks hasn’t been booming yet, he is confident it will pick up soon. “There are many elements working against us. But we are optimistic really, and I am sure within the next year sales will be at least three to four times more than now. Because right now, the numbers are picking up fast, but the problem is that we don’t have full stock yet so we’re not able to comply with the demand.”

As TATS is currently on a first-year trial period, they are limited to ordering a set number of trucks from the factory. “But once we pick them, of course, we will start having sales for bigger numbers.”

Daewoo in the Emirates

A common sight on UAE roads, Daewoo trucks have become a popular choice for competitively-priced medium and heavy trucks in the Emirates.

The Daewoo heavy duty truck range was introduced in the UAE in 2004, and since then has witnessed steady growth in the country in sectors like logistics, construction and applications like water and sewage tankers, says Sudhanshu Shekhar, general manager, Tata Daewoo Commercial Vehicles. The Korean brand now has an annual market share of about 15% in the UAE, he adds, due mainly to its distributors, Dalma Motors in Abu Dhabi and United Diesel in Dubai and the Northern Emirates.

“Daewoo trucks are the preferred choice of customers who expect high quality, performance and reliability, along with a competitive total cost of ownership,” Shekhar says. “Currently, almost 12,000 Daewoo trucks operating in the Middle East attest to that.”

The most popular models in the UAE are 4×2 and 6×4 tractors and 6×4 rigid chassis. The tractors are generally used for logistics operations, while the 6×4 chassis is used for applications such as tankers and 18cbm tippers.

“While our growth has been satisfactory, we believe there is much more we could do and get more and more customers associated with our brand and products,” Shekhar says. He also echoes Addada’s comments that the weakening euro and yen have brought more price competitiveness to the market. “However, with a loyal customer base and the intrinsic strengths of our products and after-sales service, we have been able to withstand the emerging scenario.”