China vs UK: How Kenyan haulage firms choose trucks

There’s tough competition among truck sellers. FILE photo | nmg 

By BD REPORTER

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Summary

• Hauliers are shifting to brand new vehicles in push to cut maintenance costs.
• In purchasing an ex-UK truck, haulage companies, in most cases, import them, because of a lack dealerships in the country, thus incurring Sh500,000 to Sh1 million more for duty-paid.
• Chinese brands have dealerships in the country, making them more accessible.

Kenyan haulage companies are switching their preference of trucks from ex-UK vehicles to new Chinese trucks, which they say have a lower maintenance cost and are cheaper.

Since 2009, the sale of Chinese brand trucks has been rising. According to research released in 2017 by the International Energy Agency on the future of trucks, it showed that China had overtaken the United States and European Union to become the largest global sales market of new heavy-duty trucks in 2009 with its sales growing by 75 per cent between 2008 and 2009.

“Indeed, while global sales decreased, China’s sales continued to rise and its market share continued to grow rapidly; by 2015 it accounted for 20 per cent of new heavy-duty truck sales globally. In the European Union, new truck sales grew moderately through 2008 before plunging more than 40 per cent; as of 2015 its sales had not yet recovered,” reported the International Energy Agency.

“In our fleet, most of the trucks are ex-UK, but this is because when we started out, these were the best option in the market, but currently when buying new trucks we are purchasing Chinese brands because they are affordable,” said Andrew Mwangi, operations manager at Midland Hauliers Limited.

In purchasing an ex-UK truck, haulage companies, in most cases, import them, because of a lack dealerships in the country, thus incurring Sh500,000 to Sh1 million more for duty-paid.

Chinese brands have dealerships in the country, making them more accessible.

“Purchasing a new Chinese-brand truck, all the costs involved, is approximately Sh6 million shillings, whereas buying a new truck from a non-Chinese brand will cost Sh12m, an ex-UK truck will, on the other hand, cost Sh4 million, which have already covered 100,000 to 200,000 kilometres in mileage, therefore, it will require one to foot the bill of its maintenance costs, including spare parts,” said Mr Mwangi.

Indeed, in the first years of a new truck, maintenance cost is minimal because new parts. However, a used truck has ageing parts that are replaced more often to improve its function.

READ: Foton unveils first locally-assembled trucks since return to Kenya

The American Transportation Research Institute in its 2017 Analysis of the Operational Costs of Trucking report estimates that the maintenance and repair costs of an ageing heavy-duty truck to be $0.166 (Sh17) per 1.6km. 

On average a truck can cover 167,283km per year, therefore haulage companies factor in this expense when buying trucks.

An analysis by Frost & Sullivan predicts in a report released in 2017 that Asian automakers would have a bigger presence in Africa because of building trucks in line with customer demands and regional conditions.

“Asian original equipment manufacturers in the recent past have made swift inroads into the African market and contribute 73.1 per cent of the total commercial market share. They have gained traction because of optimum specifications that comply with regional demands,” reported Frost & Sullivan.

- African Laughter