Face to face with UD’s Filip Van den Heede
Face to face with UD’s Filip Van den Heede
From improving parts availability to focusing on sustainability and the empowerment of women, this has been quite some year for UD Trucks Southern Africa. Managing director Filip Van den Heede tells CHARLEEN CLARKE that he’s very pleased with what has been achieved in 2023.
While it hasn’t all been plain sailing, Van den Heede is happy with UD’s achievements in 2023. “It’s been a very good year for us, from both a volume and a financial point of view. The extra-heavy market has grown by 25% and we have been very strong there,” he reports.
Heavy truck sales haven’t been quite as high as desired, due to supply chain challenges. “Like many other companies, we have been impacted by the problems at the Durban port. The supply challenges we have faced meant there were times when we couldn’t build trucks. We are obviously trying to mitigate as much as we can, but this involves stockpiling, which – from a financial perspective – isn’t ideal,” says Van den Heede.
Bus sales tell a happier story, though. “Our new UD Croner Bus is proving popular, and our order book has started to fill up, especially in the second half of this year,” he notes. “Our Allison gearboxes and TCO are hitting sweet spots with the operators, while customers are also finding our telematics to be a plus point. I am happy we will hit the 100 sales mark very soon.”
Service agreements are yet another success story for UD Trucks. They are earning a reputation as well-priced in the industry, and customers like being able to predict costs. “As a result, we are seeing considerable uptake in service agreements. Previously, one-third of our vehicles were sold with service agreements. This year, we are not far off the 50% mark, so one in two vehicles has a service agreement. This has been a game-changer for us in the last year,” Van den Heede expands.
Service agreements also make sense given the ever-increasing complexity of trucks. “Euro 5 trucks are obviously more sophisticated. Customers who used to have their own workshops may not want this responsibility any longer,” he explains. UD Trucks has assembled a veritable army of highly trained technicians around the country to maintain and service the trucks. “We are putting in a lot of effort, in conjunction with our dealers, in terms of competence and training. We have more training and apprenticeship programmes than ever before,” Van den Heede points out.
This is going hand-in-hand with a focus on improving parts availability. “We have more than 25,000 line items in our warehouses and have rolled out a logistics partnership agreement with our dealers to ensure we have the right parts at our dealerships,” he reports. “It’s all about improving uptime. Depending on their location, we have daily, weekly, or bi-weekly deliveries to dealerships. We’re now in a completely different parts league compared to pre-Covid. Parts availability has improved by up to 20% as a result.”
Sustainability is another area of focus at the dealers, and he notes that this is nothing new: “We have been promoting sustainability at the dealer level for some time. Many dealers around the country have invested in solar panels – partially because of load shedding and partially because of sustainability. If I had to make a wild guess as to the amount of money invested by our dealers in sustainability this year, I would say it’s around R100 million. We even have a couple of dealers that are completely off the grid.”
UD Trucks would also like to see more women employed at dealerships and, indeed, in all areas of the business. “I’m very proud to reveal that UD Trucks was recently recognised for spearheading women and youth empowerment and was named the most improved OEM when it comes to B-BBEE at the naamsa Annual Accelerator Awards,” says Van den Heede. “Youth empowerment and a focus on women have always been close to my heart. We have also been working with Nicci Scott-Anderson, chief executive director of the Commercial Transport Academy, to try to bring more women drivers into what is still a male-dominated industry.”
He adds that UD Trucks is also working on programmes to bring women into dealer leadership roles, while the company now has its first black dealer principal. The employment of women is noticeable at the UD factory, where close to 30% of the workers are women. “Not so long ago, there were only a handful of women in the plant. We have invested substantially in ergonomics on the line, so that heavy lifting is minimised. This is good for the men too, of course,” Van den Heede says with a smile.
The company is also subscribing to the YES Programme. “From a B-BBEE perspective, we are proud to be the most improved OEM in the country,” he continues. “It involved a considerable amount of hard work!”
UD’s sense of pride extends to its innovations. “Our company is synonymous with innovation; we’ve introduced so many industry firsts. We were also the first to bring Euro 5 into production in South Africa – initially with Quon but now also with Quester and Croner,” Van den Heede points out. He is adamant that South Africa needs to become a Euro 5 market as soon as possible. “This is the biggest contribution we can make to lowering emissions. Electric vehicles are still very expensive, so I don’t see electric trucks becoming mainstream products in South Africa just yet,” he stresses.
Turning to 2024, Van den Heede hopes that challenges at the Durban port can be overcome. “I hope these issues don’t turn out to be as structural as the rail sector. If we can’t fix the Durban port issues, it will have a massive impact on the GDP, which we don’t need. I also hope for a smooth and peaceful election,” he says.
“During the first part of the year, we could see operators adopt a bit of a wait-and-see approach as the elections loom,” he predicts. “Truck sales could dip slightly, while I also don’t think extra-heavies will continue to grow. Instead, sales will flatten out. There will be more optimism in the second half of the year, after the election, and we could see 3 or 4% growth in the heavy sector.”
And what of UD Trucks’ fortunes? “We would like to continue to grow volumes and market share, of course. We have a lot in our favour. UD is known for having a strong dealer network. We are also very proud of the fact that our vehicles are extremely fuel efficient. We have excellent parts availability and reliable and robust products. So, we have a couple of good recipes in place in our UD kitchen. Now we just need to plate the dishes for our customers,” he concludes. Bon appétit!
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