After a slow start, Foton Trucks in Australia is open for business
Trying to bring a new brand onto the market is sometimes not as easy as might at first be thought. The Foton Truck brand was first previewed back at the last Brisbane Truck Show in 2012, but after a slight fanfare everything went a bit quiet.
Rumour had it that the importer, ATECO, had expressed concerns with the manufacturer in China that final assembly quality wasn’t to the expected standard and that higher sign off quality levels needed to be implemented. Some internal management changes at ATECO also slowed down progress.
Nearly two years later, and for Foton it’s seemingly a different scenario, with a revitalised product of higher quality and an Australian truck man in the shape of ex-Hino marketing executive, Alex Stewart, heading the operation. There’s also been an expansion of the product range, with ATECO adding the sales and distribution operation relating to the Foton Tunland Ute to its portfolio.
Delivery Magazine caught up with Alex Stewart together with Issy Gispan, Foton Truck sales manager for dealership MacArthur Foton in Campbelltown, to discuss just how the initial hurdles had been overcome.
“To come into a new brand we have had to look at the whole supply chain. There were already established processes in place with the dealer network, but, because we now have trucks as part of that portfolio, the more specialised nature of the customer relationship, service and aftersales support, sales training for knowledge all need to come into play,” said Alex Stewart.
“To take someone in a dealership from the car or passenger and light commercial side of the business and fit them into the light-duty end of the truck business does require an induction. It does require a range of product knowledge and sales training that has to go along with it. The whole supply chain process has had to be looked at,” added Alex.
The aim is for 30 Foton Truck dealerships spread across the country, and currently the distributor has signed up 22 dedicated truck dealers and around 25 dealerships for the Tunland Ute products. Towards the end of the year the importer hopes to add a further six outlets.
The second half of this year will see rationalisation with the dealer network but still the need to grow it and develop its reach across the country.
“Primarily, it is intended to have Foton light commercials alongside the trucks in the dealership, where it makes sense. Obviously there will be some exceptions because of premises or location, or just the way that business is being done. But primarily we need to have the brand under the same umbrella. It makes sense logistically,” said Alex.
On the question of product range, the Foton Truck cab is available in two different sizes – the first being of standard dimensions and with a subsequent wider cab version.
There is a marketing advantage of a standard width or narrow cab that comes from a demand for that size of vehicle, whether in a metropolitan operation or just in general usage.
“People still see the standard-cab vehicle as suitable and necessary for the job, especially where access down laneways such as a concreter or landscaper,” said Alex.
“The body is not generally the same width as with the wider-cab version, for that same reason. The regulations limit maximum tray or body width to 2.5 m, but it would be very rare to find that width of body on a standard-cab vehicle. You would move them into a wide-cab version, leaving the 2.2 m width for the standard cab. We have two different alloy trays to suit those requirements,” said Alex.
There’s a big market in this light-duty truck segment for a full automatic, and Foton in China is currently evaluating options using a full-fluid torque converter type transmission supplied by Alison. This is a project that Allison and Foton have been working on in China and it is anticipated that availability could be signed off for entry into the market in 2015. The same timeframe applies with factory-bodied tippers with several options already under development.
It will be an interesting marketing exercise to monitor the acceptance of Chinese vehicles into the Australian marketplace after some significant setbacks for first of the manufacturers to test our market, such as JAC. This was a product that despite having strong credentials in the Chinese domestic market, the lack of sophistication that could tailor it to the Australian market killed the brand entry almost coincidentally at the same time as it launched.
“From the car side of the business, obviously the transition from Japanese product and through the early introduction of Korean product we have seen the continuous improvement of vehicles and fit and finish of both country’s products,” said Alex.
“The car buyer looks at the Chinese products and sees the same potential as they did when they saw the Korean or Japanese product. I believe the Chinese product is better in its first evolution than the other manufacturers were in their first evolution.
“The truck side is a little bit different, as there has never been a lot of other foreign manufacturers in this market. There have been other Korean and Chinese attempts at this market, but they didn’t get very far.
“You are coming into a domestic market dominated by the Japanese, but that doesn’t mean you can’t present the brand and create the right level of customer expectation. The products require different expectations from those of Japanese products, and that brand value proposition highlights there is a reason why they are less expensive. That’s not to say it’s a lesser vehicle, it comes down to how you promote that product,” added Alex.
The current engine exhaust emissions levels of the Cummins 2.8-litre engine used in the Tunland Ute is Euro IV compliant, while the ratings of the 2.8 and 3.8-litre engines fitted in the Foton truck derivatives are rated at Euro V emissions standards.
“The fact that all the engine range is manufactured by Foton Cummins in Beijing means the upgrade to Euro V for the Tunland is really only a question of timing. They are not the same engine in its full specification, but, as far as when they will align, we would look to Foton and legislation in Australia to set the timing,” added Alex.
Issy Gispan is sales manager for Macarthur Foton Truck and Ute, a new dealership at 29 Blaxlands Road, Campbelltown, which is a division of the Clintons Group.
Issy is certainly enthusiastic about the product and sees it as an exciting challenge to introduce the brand to a new audience.
“Since I started with them about one year ago, I can see the potential. People originally had resistance, but now it’s less and less noticeable. Now they don’t buy one, they buy four. You can see them getting more confidence, especially when they know the background of Foton in China,” said Issy.
“I see the potential also because they come at a special introductory pricing. There really is nothing better in the market unless you want to pay $15,000 to $20,000 more. It’s good in its class for the SWB and LWB, it’s got a good engine, a ZF gearbox, which is well known, and with the name of Cummins it helps a lot. People know and already recognise the Cummins engine, and that is encouraging.
“It has enough power to tow a trailer, it has an exhaust brake, and I like the features. The 2.8-litre ISF is in the standard cab, the 3.8-litre is in the wide cab. We need to rebrand the exercise and maybe identify the truck as a 4.5-tonne/110 kW. This market is all about power.
“The feature side of things are the Cummins engine. We need to start to highlight the key features. If we have better torque than a competitive vehicle, that’s just one of the highlights. I like to sell them. Any new product is a challenge in the beginning until it becomes recognised,” added Issy.
The new dealership premises at Macarthur Foton certainly raises buyer expectations with its expansive showroom and brand-new facilities. Also of interest is how Issy Gispan is utilising print and social media with activity on Facebook and the dealership website to reach buyers that may not be traditional truck buyers.
The use of social media to reach potential customers was highlighted also by Alex Stewart, who explained that as an importer the company had created access to a database that allows a dealership to look at the light commercial and light-duty trucks sales of all products from all manufacturers over the last ten years and look at the opportunity for new sales.
“The programme analyses frequency of purchase, and there are filters as to when people would be in the market for a new truck. You can put in the filters and see who might be in the market for a new product in July, and then identify postcodes and subsequently streets and produce a call list. From that you can pick the top 20 potential buyers in a specific area. You have the customer name, address, contact number,” said Alex.
“It’s all about being proactive with a lead generation process. We are also taking the same database and filtering through to our top 20 buyers types and then create an EDM process to start targeting those customer groups to then start qualifying and identifying those contacts and start following up. Long term, we will be aiming to be able to use more information from dealerships to refresh and update that dealer list.
“In terms of product support, the parts supply chain is well established and is all in-house. As a company we are well experienced with the Chinese product, and all the experience that was gained in earlier days with Great Wall and Chery is to our benefit,” concluded Alex.
A full road test of the Foton Truck range will appear soon in Delivery Magazine.