Rod Chapman•3 Jun 2014

FEATURE

Q&A: Alex Stewart, Foton Trucks

Alex Stewart, the new General Manager of Foton Trucks Australia, is relishing the challenge of building the brand in the cut-throat 4500-8500kg GVM market…

Australian auto importer and distributor Ateco Automotive is refocussing its efforts in the ultra-competitive Australian light-duty truck segment, following the recent appointment of a new General Manager for Foton Trucks Australia, Alex Stewart, and the addition of the Foton Tunland ute to its portfolio of brands.

Owned by expat Kiwi entrepreneur Neville Crichton, Ateco bought the rights to Foton Trucks in late 2012 from Transpacific Industries Group but it has only just acquired the rights for the Tunland ute. Foton's Tunland was previously imported separately by Queensland-based FAA Automotive.

Ateco Automotive is no stranger to establishing new brands in Australia. Its expertise saw Kia successfully spearhead the Aussie market before control went back to the factory, and it currently presides over relative newcomers SsangYong, Great Wall, and Chery, along with Lotus and – under its European Automotive Imports arm – Maserati.

It's fair to say Foton Trucks has maintained a fairly low profile here in Australia but it's a truly massive entity in its native China. Owned by the state-backed BAIC Group, Foton is headquartered in Beijing and has reportedly produced over five million vehicles since it was established in 1996.

A manufacturer of trucks, buses, utes, SUVs and agricultural machinery, Foton also has significant joint ventures in place with Daimler, with which it markets its Auman range of heavy trucks, and Cummins, with which it produces the 2.8-litre and 3.8-litre ISF engines found in many Foton vehicles (including the Foton Trucks Australia range and the Foton Tunland ute).

While there will be a crossover in the Foton Truck and Foton Tunland dealer networks, the two families will essentially be handled separately within Ateco. While the Tunland will be overseen by Peter McGeowan, also Ateco's General Manager for Great Wall, the truck range will be headed up by Stewart.

No stranger to the Australian truck industry, Stewart brings a wealth of knowledge and experience to the role. He takes over from previous GM Andre Zaitzev, who returned to his home of Melbourne for family reasons at the end of 2013, and sales manager Mark Griffiths, who has since moved into a self-employed role with RV firm, Sunliner.

Fifty-eight-year-old Stewart was born just south of Glasgow, Scotland, into a family that owned and operated its own taxis, minibuses and coaches. After completing an automotive apprenticeship he went on to work for a Scottish Volvo dealer before becoming an R&D engineer with a Scottish manufacturer of 4WD and 6WD vehicles. Those vehicles were used primarily for military applications, and the role often took him to the US and the Middle East.

He then worked as an independent contractor for the Royal Guard and other government bodies in the Sultanate of Oman from 1979 to 1989 before moving to Sydney, Australia, to complete a one-year contract to assist in the restructuring of NSW's then Urban Transit Authority. One year turned into several, followed by stints with Scania (as a dealer principal), Heggies Bulkhaul (National Group Equipment Manager), and UD Trucks Oceania (National Sales & Marketing Manager).

In 2006 Stewart moved to Hino Australia. There he held a number of roles over the following eight years, culminating in Divisional Manager overseeing product strategy, marketing, dealer development and customer care.

Trucksales.com.au recently sat down with Mr Stewart (pictured, seated) at Ateco Automotive's Sydney head office to learn of his future plans for Foton Truck Australia and the significant challenges that lie ahead. Joined by Foton Truck Australia's National Service Manager, Tim Williams (pictured, standing), here's what he had to say…

Trucksales.com.au: You've tackled a wide variety of jobs in the past. Does Foton represent your greatest challenge to date?

Alex Stewart: Currently, yes! [laughs] It is a challenge but that's the attraction in joining an organisation at a time when opportunities are presenting themselves. It's not only a challenge – it also offers massive potential.

TS: Some may find your switch from Hino to Foton somewhat puzzling. What was your motivation for the change?

AS: Yes, after eight years at Hino people might say I had a good job, that things are going extremely well for Hino, that we'd taken it through all the hard yards and that we could sit back and enjoy the benefits, but I can't – I've got to get in there and stir the pot and poke the tiger.

TS: You're essentially starting from scratch with Foton Trucks in Australia. What do you see as the biggest challenges to be overcome in growing the brand here?

AS: It's several fold. If it was only one thing or a small group of things to fix that would be pretty easy and anybody could do it, but what we've got across the organisation and the product is a raft of tasks and challenges.

We've got the organisation of Ateco, whose strength is in the automotive world, but this is different, this is trucks – and that in itself creates the internal challenge of getting the organisation to develop a truck business mindset.

Then we have to take that same challenge to the dealer network, because fundamentally the Australian truck industry has a very established dealer network and all the major OEMs have got all the best dealers – you don't have a lot of choice. So because we have an established dealer network that's fundamentally based on cars or light commercials, as in utes, we have to re-educate and re-train those dealers into that truck mindset. That said, we do have a number of experienced and successful truck dealers in our network and they will be a great help in spreading that skill.

If a truck breaks down you've got someone knocking your door down to get it back on the road. It's a tool of trade, it's making money, and especially at that lighter end of the market it's the guy's life – if he doesn't have a truck he doesn't have a job. The pressures and demands on dealers are significantly higher.

Then you've got your sales teams, especially those who will be coming from the car side of the business. You have get them to understand the complexities and the differences. There's a huge raft of tasks in training in that particular area, and then you take it through to the actual sales process.

The sales teams don't necessarily know the market and they don't know their customer base, so we have to create a toolkit for them so they can understand what the market is and who their customer might be, so they can talk to that customer. It's all-encompassing in that regard, and then of course we've got to do some marketing and push the Foton brand.

If you say 'Isuzu', most people know the company and what it does. Fuso is the same to some extent and Hino to a lesser extent, but Foton is a lot further down in terms of the level of recognition. We need to raise that level.

TS: What sort of crossover will there be between the Foton truck and Foton Tunland ute dealer networks?

AS: There will be some overlap. I think we now have 22 dealers on the truck side of the business, and counting, and for the Tunland ute I think they're aiming for about 35 to start with. Probably the majority of the truck dealers will be Tunland dealers, but the numbers are virtually changing by the day. My aim would ultimately be that however many Tunland dealers we have out there, we should get pretty close to that same number for trucks.

There's going to be a transitional period for some months to come; I think it'll be the end of the year before it settles down.

TS: Is your perception of where Foton is at in this country any different to when you first began negotiations to take on the role?

AS: No, it's pretty much where I thought it was. I think Ateco's strategy of keeping a fairly low profile within the industry [since it acquired Foton Trucks from Transpacific] has done it good, because there's obviously been teething issues and carry-over difficulties to resolve. Get all that out of the way, do it quietly but do it efficiently, and then you can move forward.

TS: You're used to Hino's high-quality Japanese products – how does Foton's product stack up?

AS: Obviously there is a specification gap and there is a bit of a quality gap too, but I think every Chinese manufacturer has gone through that and is still raising the bar.

Chinese manufacturing is very much a 'dial-up' quality challenge. They can produce mobile phones and they work fine and there's nothing wrong with them. Trucks and cars are also coming out of factories in China and it's just a dial-up quality challenge of telling them, convincing them, showing them what really is required for our particular market, and then working with them to change their manufacturing and supply processes to meet our needs.

The specifications will for the near future always be less than the Japanese equivalent because we've taken the Japanese to a whole new level of consumer quality and specification, but there's a cost that goes with that.

The Chinese product comes to the market with a lower capital cost but it represents good value for money and it will meet the needs of most if not all of the operators of the product – they will get the same if not better fuel consumption, and the driveability, with the Chinese product as they do with the Japanese product, but they won't have all the bells and whistles.

There are some specification improvements we'll push for that are safety related – things such as airbags, all-round disc brakes, that sort of thing – but the luxury items of special trim and electronic media will take a much lower profile.

TS: What do you see as Foton's main strengths?

AS: One of the biggest strengths would have to be that it's one of the biggest truck manufacturers in China. It's also got existing joint ventures with organisation such as Daimler and Cummins, so it's joined with some key partners that provide the technical expertise and the technology to help it create better product.

TS: What are the main areas in which Foton trucks are in need of improvement?

AS: Probably in some of the more advanced technology, like electronics. We're expecting them to improve electrical components like circuit boards and relays to have better durability and a higher specification.

For us the focus is primarily on reliability and durability, so if we find componentry that we think doesn't give us the durability we expect for this market, then we'll put the onus on Foton to find a new supplier.

It's an evolution and it is being seen in the end result at Foton – those improvements are coming through. Whether it's the Cummins engine, the ZF transmission, or as in the Tunland the Dana rear axle – they're all quality products. Foton also works with Allison Transmissions; there's a lot of technical development going on in China that eventually translates to a better product.

TS: That's the build quality side, but buyers are obviously very interested in price, warranty and aftersales service too. Do you think Foton presents a compelling argument at this stage?

AS: Absolutely, but we've got to sell that message. We've got a reasonable product at an attractive price that does everything it should do; specification and finish-wise it's as good as a Japanese truck was in its last generation and it's getting better year on year. Combine that with our extensive dealer network, financial services offer and 24/7 roadside truck assist program and you've got a good business case to put to the buyer.

TS: How would you describe the difference in culture between working for a large Japanese firm and for a far smaller, private Australian importer of a Chinese product?

AS: In many ways it's chalk and cheese. The biggest difference is the decision-making process – here it's flat. It happens. In the Hino/Toyota corporate culture there's a whole chain of processes you go through to get some simple business decision carried out. In some cases it should just be common sense for something to happen, but sometimes it can take forever and by the time it does, it's too late – the world has moved on.

That translates to missed opportunities, whereas here the decision making is instantaneous; it gives me the autonomy to run the business the way that I believe it should be.

TS: Can you give me a snapshot of the Foton Truck line-up?

AS: Basically we've got four models with two cab widths and within the two cab widths we have two wheelbases – with the standard cab we have a 2.8m and 3.4m wheelbase and in the wide cab we have a 3.4m and 3.8m wheelbase. We also have two separate engines – the Cummins ISF 2.8 at 110kW and 360Nm and the ISF 3.8 at 115kW and 500Nm.

We have GVMs from 4500kg to 8500kg, with a 6500kg in-between.

TS: Are there any plans at this stage to look at the heavier-duty products Foton also produces in China, such as the Auman-branded products produced under the Daimler joint venture?

AS: We will have that discussion with them. They have already thrown that out there as to what they want to do, but if we said yes to everything China presented we'd sell nothing – or too many of the wrong thing. [laughs]

That will be looked at very conservatively, very cautiously; we need to sort through from 4500kg up to 8500kg first.

Yes, there is a huge market segment at that lower end of medium duty, of 10,400kg to 14,000kg – a huge market – but there's no incentive to jump into that without first getting the foundations of the business right.

TS: Is Ateco making a concerted push into LCVs or is it just the way things are panning out?

AS: Strategy-wise, I think in general terms Ateco sees the Chinese market as the next big future, so there is that concerted effort to look to China and grow the Chinese product – conservatively.

It has to be very selective. It has to have the right specification, the right safety ratings, and obviously the right price.

There's a whole group of people here at Ateco who work on Chinese product, through from determining the correct venture opportunity to providing the right aftersales support and managing the whole supply chain.

TS: And lastly, do you see much of Ateco Automotive's owner, Neville Crichton?

AS: For the short time I've been here I've seen him in the office three or four times a week. He's hands-on, but that also adds a bit of pressure – he's the man making the decisions because he's the one giving you the money.

For more information on the Foton Truck range, or to find your nearest Foton Truck dealer, visit www.fotontrucks.com.au.

Q&amp;A: Alex Stewart, Foton Trucks

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Q&A: Alex Stewart, Foton Trucks