Markus Geyer has, since May 1st, held the position of managing director of MAN Truck and Bus South Africa, which is now headquartered in Johannesburg.

Geyer has worked on and off MAN for the last 14 years and has served on the Board as a non-executive director. He has also been involved in sales in the Middle-East and Africa region.

“I’m really excited to be here,” he says. “Everything is not new to me, although there are still a lot of things for me to learn. But I’m really excited, and so is my family to move out here.” They will join Geyer in either July or August.

Giving an update from a global perspective, Geyer said the MAN Truck & Bus Group, located in Munich, had not changed much in structure. The holding company is still MAN SC, which oversees the two company pillars: MAN Truck and Bus in Munich and MAN Latin America in Brazil.

MAN is, of course, 100% part of the Volkswagen Group. Volkswagen Truck and Bus holding have also been created, headed by Andreas Renschler, which incorporates MAN Truck and Bus, Scania as well as MAN Latin America, making it a very large commercial vehicle undertaking.

“We needed that kind of synergy in our business in order to create economies of scale and to achieve the global footprint,” Geyer explains.

“These synergies will continue, be it on the purchasing side or on the R&D side,” he adds. MAN remains a leading commercial vehicle supplier in Europe and in many other parts of the world. It currently has a truck range from 7.5 tonnes to 44 tonnes, and there are plans to expand this with a MAN van.

“I think you will see more at the IAA this year,” he teases. The van launch – in Europe – is likely set for 2017, with the company considering introducing that product range in various European markets, as well as South Africa.

MAN Truck & Bus AG appointed a new CEO, Joachim Drees, in March last year. Drees has worked closely with Renschler in the past. “I think the Board is now complete, it is stable and we feel very confident working with them. We see from Mr. Drees some very nice, in my opinion, strategic initiatives which are taking place and taking shape more and more,” alludes Geyer.

“Our corporate values remain unchanged: reliability, dynamism, innovation and openness. This is what we are trying to achieve every day in our work, in our interactions with our business partners and with our customers.”

Upping the PACE

Drees has already launched a new strategy for MAN Truck and Bus called the Future Line, which consists of three elements: PACE 27, greater market and product focus, and an extended business model that takes longer term views.

“PACE 2017 is what we want to achieve. We have to reinvent ourselves all the time. The markets are moving and the competitors are moving. So we have to raise our game all the time.

“We have to do things more efficiently, be more customer focused, more flexible and faster.”

This is what we want to achieve with PACE 2017,” explains Geyer. The initiative should be finished by the end of this year, which means that, in 2017, MAN should be able to enjoy the fruits of its labours.

“The next step involves introducing new trucks, new buses and also the van, to enlarge our product range. There are significant numbers in the van segment and it’s a lucrative segment as well,” he adds.

He says MAN will complete the above step-by-step, market-by-market. It will focus on selected markets around the world, including South Africa. “We believe South Africa has a good future. While there are one or two challenges right now, this country has a lot of potential and can become a hub for other business in Africa,” he says.

“We believe in South Africa. Moving into this fantastic building is a statement that we are not hesitating, that we are not going to move out, that we are not disinvesting. No, we are here to stay, we believe in South Africa, and this is shared by the Board in Munich, which is always good news,” he confirms.

In terms of the new business model, he says this stems from a changing environment, which includes connectivity, car sharing, and mobility solutions, not just on the car side.

“We strongly believe this will be a new reality. The first steps were seen with the introduction of telematics and the professional use of that data a few years ago. I think that is only the very, very beginning of what we are going to see, especially in the car industry, but also in the truck industry. We also believe that in the future, selling a bus or truck is not going to create that much value.

“I think it is going to be more and more the services what we and our competitors provide in addition to the hardware.”

We have decided that this is going to be the long-term future and that we must be a major player in it. Being part of the Volkswagen Group provides resources like autonomous driving and connectivity,” Meyer states.

MAN has essentially ceased production of buses in Germany, shifting it to Poland and Turkey. “That is working fantastically and I understand the quality levels are right up where they should be. Those two countries are more cost-competitive in bus production because a lot of labour goes in, there is lots of manual work that goes in, and Germany is a high wage country.”

The company’s German, Polish and Austrian production plants are important to South Africa as these are potentially where special vehicles come from or where smaller vehicles like the TGL and TGM could originate. The sister company in Brazil, with a plant in Resende, is where the Volkswagen product is sourced from.

“MAN is changing as we penetrate more markets,” Geyer says. “What we saw in 2014/15 in Europe is a robust market. They have had good growth in the market.” Order intake in Europe was up 9%, with truck sales up 7% and bus sales up an incredible 21%, while the company’s turnover also increased by 7%. “You can see the first effects of the PACE programme in terms of our efficiency. Operating profit improved, although it is not near where it should be, but we are definitely on the right track. Also, keep in mind that we get some other extra costs in here for restructuring and so on,” Geyer explains.

More than half (56%), of the company’s turnover, comes from truck sales, followed by aftersales which, Geyer says is gaining in importance in terms of turnover, profitability and customer retention. The bus business contributes 12%, with Top Used – MAN’s used vehicles division, adding another 7% to turnover.

Geyer explains that MAN defined its brand profile a few years ago, with the three major core elements being efficiency, customer proximity, and product enthusiasm. Efficiency is derived from the company’s efficient line of tools, its product lines, and its telematics.

“We believe that we understand our customers’ requirements, and we provide solutions to market requests.”

We are still a proud German engineering company, we love our products, and I think they are state-of-the-art, be they buses or trucks.”

The company’s product range for the long-haul still consists of the TGX as the premium, flagship product. The TGS the TGS WW are still selling in South Africa as well as outside Europe in Euro 3 markets. Then, of course, is the CLA for selected applications. The TGX is predominantly sold in Europe, although it has been introduced for long-haul operations in South Africa, too.

Geyer indicates that the TGS is the biggest part of the business in the long-haul segment, with the TGM with the 4X4 application and the TGS WW for export markets.

“The CAN is gaining ground in many markets. On the distribution side, it’s again the same range, but obviously for different applications. We have TGX, TGS, TGS WW and CLA. Just recently we introduced our new flagship truck with a D38 engine in Europe. It’s a Euro 6 engine only at this point in time. I think it is a fantastic engine, a fantastic vehicle – 15-litres – very efficient and up to 644 horsepower. It has some interesting features like GPS control and cruise control, to increase efficiency and reduce fuel consumption.” Will it be introduced to South Africa? “Not yet, but let’s see. At the moment, it is only available as Euro 6 and as we all know, the fuel quality doesn’t allow for that product in South Africa. There are always things in the pipeline and, after a while, these things come to our markets – usually – but not always.”

Quality

MAN has, for the fourth consecutive year now, won the TUV quality award in Germany.

All the trucks have to go for official government inspection by law, which is carried out by the TUV organisation. “They are sort of certified auditors and keep statistics for all the different brands. Trucks come in and are checked for mistakes and roadworthiness. I think that underlines our commitment and focus on quality and of increasing uptime for our customers and of reducing cost. I think there couldn’t be a better testimony than this. And we see it in our workshop turnover, which has been declining.”

Apart from an extensive bus range, MAN also has an extended chassis programme, which is sold in South Africa and predominantly in the company’s export markets.

“Worldwide, I think 80% is chassis market as opposed to an integral bus. So the chassis segment is gaining in importance.” The company’s intercity bus recently won the design gold award. In South Africa, we don’t sell complete buses, but at least you can see bus competence in MAN is there,” he says.

“We are continuing to be market leaders on the CNG side for buses.”

In South Africa, it is not so popular yet, but if ever it becomes an issue on a larger scale, we definitely have the technology in-house to serve our customers, to satisfy their needs here,” assures Geyer.

Hybrid solutions have also been introduced overseas. “They are becoming more and more popular in Europe. The worldwide trend in the city bus segment is the use of alternative engines, not only diesel but also electric or hybrid and also gas. So these things are coming and MAN is prepared for whatever the market wants.”

Selling trucks and buses alone will not do the trick, he cautions. “In the future, customers will want more and we need to deliver more. We are focusing on the long-term strategy and our business model is going to change. We see some elements have already taken place and there is more to come.

The company recently introduced ProfiDrive in South Africa and has partnered with Cartrack to provide telematics solutions. Service contracts are in place, as are financial services and service care and the company is looking at the rental market.

“More and more we believe that the used vehicle business is gaining in importance. That is a field where I believe there is room for MAN to improve its performance worldwide,” states Geyer. “So we have a much stronger focus on that business.

“It is necessary for many of our customers to move to operating lease or rental solutions. With the rental solution, the truck comes back after 3, 4, 5, 6 years depending on your contract and then you have to do something with it. If you can’t, you are losing out. It is as simple as that. We have to put more focus on that business.”