Jun Narahashi
Chairman and CEO
Isuzu Motors de México
View from the Top

Japanese Truck Leader Offers Personal Touch

Mon, 09/01/2014 - 10:46

Q: 2013 was a difficult year for many truck companies but Isuzu’s sales figures improved towards the end of the year. What can this be attributed to?

A: Many fleet customers were hesitant to make purchases at the beginning of 2013 as they were waiting to see the economic fallout of changes happening in Mexico. This impacted our results in the early part of the year. We stayed close to our customers, however, and kept in regular contact with them. This meant that they thought of us when they began feeling comfortable about purchasing again at the end of the year. Our dealer network has also done a great job, leading to our non-fleet business seeing the best results in 18 years in 2013. While having non-fleet customers is very important, we are very keen to maintain good relations with our large fleet customers as they will continue to grow in the future.

Q: What factors motivated Isuzu’s entry into the Mexican market?

A: Isuzu has been in operation for almost 100 years, and over that time we established ourselves as one of the companies with the longest history of vehicle exportation. Mexico may be a new market for Isuzu but it is an important market nonetheless. Mexico was actually one of the last markets we entered as part of our global growth strategy. There is a lot of room for growth here due to a rapidly growing population and the increase in middle-class purchasing power. The kind of service that we can offer is a service beyond what this market is accustomed to. Our trucks are sold in over 120 countries, and we are very familiar with what customers demand. In terms of installations, we have an assembly site in Cuautitlan, and we are happy with the people, quality, and processes in place so far. We are assembling just two models at this site for the moment, and the rest are being imported from Japan. When you look at the investment needed in relation to the amount of trucks that would be produced here, it is simply not economically viable for us to build an entirely new production facility in Mexico.

Q: How are you translating your value proposition into actual sales?

A: The big fleet customers in Mexico are very sophisticated and they understand the superior performance that Isuzu trucks provide. This gives us a clear advantage as the more fleets use our trucks, the more our trucks are advertised to potential customers. In our experience across all of our dealers, it has become evident that once clients understand the benefits of our products, they want to buy them. After initial sales, we also put a large focus on maintenance and servicing to keep our clients coming back. Large fleets in Mexico are naturally very keen on fuel efficient products. Our diesel engines provide just that, since Isuzu is number one in its segment for fuel efficiency in more than 35 countries. That reputation precedes us and helps us a lot. We have two kinds of diesel engines for Class 3 and Class 6 trucks, making us the only truck producer on this level to offer that. For those clients who are not so up-to-date with fuel efficiency issues, we recently carried out a vehicle driving seminar, aimed at improving fuel efficiency.

Q: What allows you to stand out from the other Japanese companies that have come to Mexico?

A: From the minute we entered Mexico, our aim was to provide the best service as rapidly as possible. One of our major competitors came in two years after us, but that gap made a big difference in terms of how well entrenched we were here. Of course, new companies coming in later can build on the success achieved by others, so we have to keep pressing ahead. Another way in which we differ from the Japanese way of doing business is that our managers here really try to visit our customers in person. We can therefore see how they are doing with our products and what we can do to improve our service. Isuzu is also one of the greenest truck producers in the market, but the infrastructure is not yet in place in Mexico to support us in this segment. For example, we cannot propose our natural gas products in this country as customers would not have access to refueling facilities.

Q: Are you planning to expand your passenger vehicle business?

A: This is the next step for Isuzu in Mexico, but it will happen further down the line. Buses are very expensive, and many old buses in Mexico need replacing. It may take a long time for this to happen though, and it might well have to entail government support. We have begun selling some buses but this is only moving ahead little by little.