Africa Automotive: Talking parts in Nigeria

Approval by Nigeria’s Federal Executive Council of the new National Automotive Industry Development Plan (NAIDP) for 2023 will go a long way to strengthening any proposals emerging from the West Africa Automotive Show (WAAS) Conference in Lagos that opens tomorrow (May 16).

In its broad form, the NAIDP is intended to provide competitive fiscal and non-fiscal incentives needed by automotive industry manufacturers/producers, investors, developers and all relevant stakeholders.

The NAIDP is aimed at enabling the exponential increase in the local production numbers of vehicles, reaching 40% local content and attaining 30% locally produced Electric Vehicles.

In terms of WAAS, the primary issue, according to former National Automotive Design and Development Council (NADDC) director of planning and strategy, Luqman Mamudu, is the fact local manufacturing of parts and vehicle assembly have stalled, meaning the country relies on “imports of used parts and substandard new ones” with an import bill of $3,3-billion annually.

Mamudu, who will chair the conference at Nigeria’s largest automotive aftermarket trade event says:“I expect that the inaugural conference of WAAS and the show itself will deepen demand for new parts in Nigeria.

“The dominance of used parts potentially undermines any attempt at local manufacturing as they are far cheaper than the original new ones and are perceived as OEM (original equipment manufacturer) standard.”

“Another adverse impact of the full reliance of fully-built automotive importsis that certainly constitutes a strain on the balance of payment position and missed opportunities to create employment. This has the potential to undermine the economy. It is particularly worrying to me because 70% of this is accounted for by pre-owned vehicles and used parts obtained from salvage vehicles.”

However, there is strength in the Nigerian automotive industry with investment of more than $1-billion in manufacturing and assembly capability and he adds: “These facilities remain intact in the form of annual installed capacity of more than 500 000 vehicles. The presence of several global OEMs remains a pipeline of access to technology and capital once the environment is right. Nigeria also boasts a reserve of trained but presently unemployed skilled workforce.

‘By 2017 the NAIDP through a combination of fiscal incentives and protective measures grew installed assembly capacity to above 400,000 units per annum, but only 10% capacity utilisation has been recorded  due to weak policy implementation.

“But it is noteworthy that NAIDP caused the revitalisation of existing automotive assembly plants including Peugeot, Mercedes Trucks, and Volkswagen.”

Mamudu said the conference aims to highlight the need for safety and quality in automotive products.

“Used parts imports account for nearly 90% of aftermarket share. The reasons observed are varied but the preference for used components may be due to eroded confidence for new parts.

“Substandard new components and parts are common in the market, so people are suspicious. To build confidence, suppliers must deploy product quality standards tracking systems. Global brands must also expand their service and parts network as outlets for genuine parts,” he said.

What emerges from that conference will be eagerly awaited by all the stakeholders just as eager to see the full implementation of the African Continental Free Trade Area (AfCFTA), which will be a hot topic at the Intra Africa Trade Fair in Cairo later this year.

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Colin-on-Cars - New parts store for Chery

The Chery brand has taken off in South African and the local company has now opened a new parts warehouse in Parkhaven, Boksburg that will house stock worth around R70-million of 4 500 part lines.

“In 2022, Chery’s first full year of sales, the company welcomed 13 142 new customers to the brand. This is a new record for any new entrant in the South African market and it makes Chery the seventh most popular brand in the country. We hope to further improve on this ranking in 2023,” says Tony Liu, Executive Deputy General Manager of Chery South Africa.

“Our choice of the warehouse in Boksburg gives us easy access to all main arteries in and out of Gauteng. It will allow us to dispatch parts to every dealership every day and to receive parts and components for storage throughout the day and night,” says Liu.

The new warehouse not only represents a major increase in size but also in complexity. The new facility uses state-of-the-art electronic identification systems to easily find, pick and dispatch stock.

“We are aiming for an industry-leading fill rate of 98%, which will ensure that customers do not wait longer than normal to have their vehicles serviced or repaired,” says Floris du Toit Head of Aftersales Services at Chery South Africa.

Adequate

Du Toit notes the fill rate also applies to repair parts for vehicles damaged in an accident. Chery South Africa already holds more than adequate body panels and other vehicle replacement parts that can be ordered by any of its 117 nationally approved panel shops in South Africa.

Chery has steadily expanded its range of lifestyle and functional accessories, including electrically retractable side steps on the Tiggo 8, a range of tow bars for all vehicles and additional cargo and styling solutions for the Tiggo range.

These accessories will be stocked at the new warehouse and delivered, with a comprehensive warranty, to all dealers in the Chery network.

“We hope to instil the same level of confidence in our range of Chery accessories as we do in our products. As such, we encourage our customers to buy and fit their accessories directly from their nearest dealer to make sure that it remains within warranty,” says Liu.

These benefits will also apply to customers of Chery’s new fleet-sales division. 

“Chery has seen a significant increase in sales to large fleet operators. Many of these fleet companies have strict requirements for the amount of time that a vehicle is allowed to be booked in for services or repairs. Our new warehouse will ensure that we not only meet but exceed these strict requirements,” says Du Toit

Aside from offering significantly more warehouse space and easy access for delivery vehicles, the new warehouse also has space available for future expansion. Chery is also investigating smaller regional distribution centres that would further improve parts distribution by placing the high volume service parts closest to customers.

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Colin-on-Cars - Global hub for spare parts

A truck fleet is only as good as its service backup and Daimler Truck has re-organised its spare parts logistics by opening a new global supply hub in Halberstadt, Saxony-Anhalt, Germany.

As the heart of the global supply of spare parts, a completely new logistics hub – the so-named Global Parts Center and, in the future parts deliveries will be made from this central location, eliminating additional transport routes and cutting the time until parts are available.

The new logistics hub will deliver up to 300 000 different items – from the smallest screw to a finished truck cab – to almost 3 000 vehicle dealers in 170 countries around the world. The Global Parts Center thus will make an important contribution to ensuring the international flow of goods.

Thanks to state-of-the-art storage and conveyor technology, all vehicle parts will be available for immediate retrieval in an automated high-bay warehouse and an automated small parts warehouse. Construction is scheduled to begin this year, with commissioning scheduled 2028.

Contribution

Karin Rådström, CEO Mercedes-Benz Trucks, says “Halberstadt and the Global Parts Center will play a key role in the future: Spare parts from our new logistics hub will make a significant contribution to keeping our customers and their trucks up and running, thereby delivering on our ambition ‘Trucks you can trust’.”

Jörg Howe, General Representative Daimler Truck AG, responsible for Global Communications & External Affairs, added “Our new Global Parts Center is the biggest logistics project in our company's history. In the future, the Halberstadt site will play a crucial role in keeping our trucks running and thus our economy and society. Without trucks, factories stand still and supermarket shelves remain empty.”

About 2 600 Mercedes-Benz Trucks’ suppliers will provide the logistics hub with their parts in the future so Halberstadt will become the heart of the worldwide supply of spare parts for Mercedes-Benz Trucks. Fuso parts supply in Europe will also be handled by Halberstadt in the future.

In a three-stage logistics process, the new location will serve around 20 regional logistics centres worldwide – in, for example, various European countries, Turkey, the United Arab Emirates, Brazil and China – which in turn will supply regional dealers with parts.

In the first stage of expansion, the new building in the East Industrial Park in Halberstadt will have a gross floor area of around 270 000 square metres with around 260 000 square metres of logistics space. Up to 450 qualified jobs will be created on site. After further construction stages and the assumption of additional activities in connection with global parts logistics, up to 600 jobs will be created at the site.

Energy

The new logistics location is planned from the start for CO₂-neutral operation; the energy concept completely dispenses with fossil fuels. Neither natural gas nor oil is required. The location will be heated with electric heat pumps that bring heat into the building via underfloor heating systems. Due to the low heating water temperatures and the storage effect in the industrial floors, a high level of energy efficiency will be achieved.

In addition, it is intended to equip the roofs with photovoltaic systems, which can generate up to 13-million kWh of electrical energy per year. This is more electricity than will be consumed at the site. Surplus energy from the Global Parts Center will be made available to other Daimler Truck locations in Germany. The roofs of the outbuildings will be greened.

Employees will be provided with a large number of charging stations for e-vehicles and e-bikes. Appropriate charging options will also be available for suppliers’ trucks, whose fleets are gradually being electrified.

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Colin-on-Cars - The case for remanufactured parts

There is a strong case to be made for transport operators to use remanufactured replacement parts that goes well beyond the simple cost saving.

Transport operators have to consider a multitude of fixed and variable factors that have an impact on their cost of operation, and subsequently, their business’ bottom line. These include fuel costs, financing, labour, insurance, maintenance and repair.

When a vital component breaks down the question that inevitably arises is how you should replace it. Repair, buy new or go for a remanufactured part?

To make the right decision for your business it’s vital to consider all your options to essentially solve the same problem.  

“Buying a new part could be your first instinct when something breaks down; after all you want something that works, has a warranty, and is guaranteed to fit your truck. A new part will also come with the latest technology, have the longest life expectancy and work efficiently. 

"But it will also mean a higher price tag and you will have to evaluate how this will impact your operating costs and total cost of ownership of your truck,” says Eric Parry, sustainable solutions manager at Volvo Trucks South Africa.

Eric Parry

When you repair a part, the malfunctioning or worn component gets replaced while the rest stays the same. While repairing can save you money it’s good to be aware repairing also almost always comes with certain downtime as the truck will have to be in the workshop for a while.

Understanding remanufacturing

Before considering whether remanufactured parts are the right option for your business, it’s important to distinguish remanufacturing from rebuilding a piece of equipment.

Remanufacturing is a standardised industrial process in which worn-out parts are returned to a condition that is as good as new in technical specifications and performance. It is usually a good idea to replace heavier components with remanufactured parts as these tend to be more expensive.

Engine, chassis parts, transmission brakes and steering are just a few of such components. When it comes to electronics, starter motors, control units and alternators can be replaced using remanufactured parts as well.

“When we remanufacture parts at Volvo Trucks this process includes dismantling, cleaning, re-machining, assembling and testing the equipment. The process is much like the original manufacturing process, except that some of the components have had a previous life,” says Olga Naert, remanufacturing business development manager at Volvo Trucks.

There are a few reasons why a remanufactured part might be the right investment if you are facing the breakdown of a critical component.

“The most obvious is of course the lower cost compared to a new part. When you buy a reman unit, all parts will be updated with the latest technology,” explained Naert. “Quality is another plus as remanufactured parts meet OEM standards for performance and always comes with a warranty.”

Last but not least, a remanufactured part also has a much lower impact on the environment as a lot less raw material, energy and water is used in the production process.

Concern about the environment and diminishing resources is a great reason to choose remanufacturing.

A newly produced part is made using 100% new raw material whereas a remanufactured part only uses 15% since most of the material comes from the core (the faulty part).

“Using remanufactured parts also saves energy, reduces landfill waste and it means that dangerous residuals inside worn components are taken care of,” adds Parry. “The process of remanufacturing, which is labour intensive, can also be seen as sustainable from a societal perspective as it creates demand for high-skilled jobs.”

In addition to quality and lower cost, remanufactured parts can also be a quick fix compared to repairing thanks to their growing popularity and availability. In fact, choosing a remanufactured part could put you back on the road just as quickly as purchasing a new product.

“At the end of the day whatever purchase strategy you decide on will depend on the specific needs of your business,” explained Parry. “Remanufacturing can be a great option if you are cost sensitive but also want a high-quality product. The cost of a remanufactured part can be up to 50% cheaper than a new one, depending on the type of part.”

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Colin-on-Cars - Pre-emptive service pricing from Ford

The digital space continues to expand and Ford Ranger owners can now do an online quote for their vehicle’s next service.

Ford claims this offers customers complete price transparency on vehicle servicing costs.

“This new Online Service Price Calculator echoes our Ford values,” says Harm Kruyshaar, FCSD Retail Manager at Ford South Africa. “We are committed to modernising our systems within the ambit of the service sector, especially when it leads to simplified solutions and more direct customer care. We are confident that by giving our customers more control and transparency they will continue to service their vehicles at Ford dealerships.”

Option

The Online Service Price Calculator, which is currently available only for derivatives of the Ford Ranger (but will soon roll out to other Ford model ranges), has been created to give customers the option of using Ford genuine parts or, where available, more cost-effective Motorcraft parts, which are alternative Ford approved parts that are engineered to Original Equipment (OE) specification.

Once the online quote has been generated, and a booking has been made, it can be taken to the relevant dealer and the vehicle will be serviced at the quoted price. Customers are given the option to compare quotes at more than100 authorised Ford dealers around the country.

Log on to www.ford.co.za/owner/service-price-calculator/ and, after filling in a few of your vehicle’s details, such as year model and mileage, the Online Service Price Calculator will generate a quote showing the breakdown of parts and labour costs.

Online

Customers can also download a copy of their Ranger’s Service Schedule and make an online service booking via a link to the online service booking portal at www.myfordjourney.co.za.

Customers who did not opt for the Ford Protect Service Plan when purchasing their vehicle can still use the Online Service Price Calculator and take their vehicle to a Ford dealership where all servicing and repairs are done to the highest standard with a guarantee on all workmanship and parts.

Another convenience initiative currently being rolled out across the Ford Dealer Network is the Express Service offering. It offers customers further convenience by allowing them to book a specific service timeslot, and having their vehicle serviced within 60 minutes by two trained technicians working on the vehicle in sequence. Express Service is currently offered at select Ford dealerships and needs to be requested when making the booking with the service advisor.

Ford vehicles come standard with a comprehensive four-year/120 000km warranty, four-year/unlimited distance roadside assistance and five-year/unlimited km corrosion warranty.

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