Japan Truck Maker on Long-Haul Trek in Indonesia

By : Jakarta Globe | on 12:29 AM February 02, 2014
Category : Archive

Quester A Quester heavy-duty truck at the JARI test track in Shirosato, Japan. (Photo courtesy of UD Trucks)

Shirosato, Japan. As the autumn sun lights up the treetops in this scenic Japanese countryside into a sea of auburn and gold, another gilded chariot glints beneath the expanse of blue sky.

The distant hum of the engine turns into a growl, then a roar, as it thunders down the blacktop, a hulking amber-hued truck with seemingly no business doing the kinds of speeds it’s clocking up here at the high-speed test track of the Japan Automotive Research Institute.

Nor does it seem to quite fit in among all the flashy concept cars, shiny compacts and dolled-up race queens at the Tokyo International Motor Show, a couple of hours’ drive away. Yet there it stands, at the other end of the hall from where visitors are fawning over Toyota’s latest consumer offerings, this beast of burden that isn’t even supposed to be in Japan.

That’s because the Quester, the all-new range of heavy-duty trucks from Japan’s UD Trucks, was designed from the ground up with markets like Indonesia in mind – think coal mines, winding mountain passes, and roads that are just as likely to be potholed as they are paved.

Joachim Rosenberg, the executive vice president of the Volvo Group, UD’s parent company, takes pains to point out that in this regard, the Quester represents a first among any Japanese truck manufacturer. All other models in use in emerging markets like Indonesia are lower-specified, stripped-down versions of their Japan-market counterparts.

It was with trucks like these that UD, then called Nissan Diesel, broke into the Indonesian market some thirty-odd years ago, growing to become among the top three brands by sales today. (The other two, Hino from Toyota, and Mitsubishi, are also from Japan.) The advent of the Quester, then, represents an entirely new approach to what UD Trucks acknowledges is an increasingly important market. Indonesia, Thailand and Malaysia will be the first to get the new trucks, which are being built at a previously mothballed Volvo plant just outside Bangkok – another first for UD Trucks, whose other models are all built at its factory in Ageo, outside Tokyo.

“We in the Volvo Group,” declares Loic Mellinand, the senior vice president of the UD Trucks global brand, “see Indonesia as the next Brazil.”

That’s a bold statement to make, but Mellinand is confident all the signs point to a long-term economic and development boom that his company’s trucks will play a growing role in helping deliver.

“If you consider the size of the market, Indonesia could represent easily 30 percent of total Quester sales” for Southeast Asia, he says in an interview in the cab of a 1960s Nissan Diesel PTC81 truck at the JARI track.

“In Asia,” Mellinand adds, “Indonesia will play a big role.”

Indonesia is already UD’s second-biggest market in the world, and with the arrival of the Quester looks poised to overtake Japan for top spot, Rosenberg said during a visit to Jakarta in September.

Indonesian customers were among those who placed orders for nearly 1,000 of the trucks within the first week of their global launch in late August, and are set to start receiving the vehicles this month.

Mellinand concedes that UD’s brand recognition is not as strong as it could be in Indonesia, a market that is more familiar with the Nissan Diesel brand.

“There is a very positive brand perception, but because UD is a new name in a way, I think the awareness can be improved,” he says.

“And UD in general has not been assertive enough as a brand, and I want to strengthen that so that customers can know and judge for themselves whether we are a credible value proposition for them.”

Quester A Quester dump truck, which UD hopes will become the workhorse of the Indonesian mining industry. (JG Photo/Hayat Indriyatno)

That value proposition comes in the form of the Quester, which was conceived in 2007, the same year that the Volvo Group took over the Nissan Diesel brand. The new range is thus meant to combine the best of UD’s Japanese tradition of quality with Volvo’s global manufacturing expertise to meet the demands of customers in growth markets who don’t necessarily want all the bells and whistles of trucks like the flagship Quon from UD, but still want the same high level of reliability, fuel efficiency and ruggedness.

“Indonesian businesses need better efficiency. So I don’t see why Indonesian customers would not need a similar level of efficiency” as customers in developed markets, Mellinand says.

“Can everyone afford to pay the same price? No. But aspiring to have the same level of efficiency? Absolutely. As a truck company this is a nice mission to have, to be able to bring these new technologies at a cost the customer can afford, while still being able to make a profit.”

The company is also boosting its after-sales presence in the country, having recently opened its spare parts warehouse in Balikpapan in East Kalimantan – Indonesia’s coal-mining heart. Previously, parts for customers in the area had to come from Singapore, by way of Jakarta, but the new facility is designed to ensure less waiting time and squeeze more productivity out of each truck.

But for UD Trucks and other heavy-equipment manufacturers reliant on the mining industry for sales, the short-term prospects in Indonesia will be colored by the government’s ban on the export of unprocessed mineral commodities, which took effect last month.

Industry representatives have for the past year warned of a steep decline in production should the ban, designed at adding value to mineral exports, not be eased, while heavy equipment sellers like United Tractors, one of UD Trucks’ two distributors in the country, have predicted “stagnant” sales in 2014.

Mellinand acknowledges the short-term trend, but points out that UD Trucks is not expecting swift returns on its hefty investment in developing the Quester line.

“We know that right now business is tough, we are suffering like everyone, but we are confident,” he says.

“For an investment like this, you take a return on at least a five-year period, but this is a new product and a platform which will live for at least 15 years, so we have to take a long-term perspective.”

That means seeing past the ban – about whose scope and enforcement the government has issued conflicting statements – and realizing Indonesia’s true potential.

“Indonesia is a very large economy; it’s growing fast, it has a large population, and is well-endowed with natural resources, so we believe in Indonesia,” Mellinand says.

“We have an extremely positive outlook on Indonesia. Given the demographics, the size of the country, the economics and what’s happening currently in Indonesia – a country that is really modernizing itself – we have a strong outlook.”

He emphasizes the point by noting UD Trucks’ long history in Indonesia.

“When we do something and we go somewhere, we stay,” he says.

“We are there for the long term; we bite the bullet when we have to bite the bullet, and when we have a few good years we of course enjoy that.”

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