Renault Targets Freight Transport Growth
Renault Trucks Nigeria has launched a range of trucks specifically designed to cope with the driving environment in Africa, which will be aimed at the freight transport and mining sectors. With the recent signing of a Memorandum of Understanding to develop and mine the Ezinmo Coal Block, BMI sees potential for increasing heavy commercial vehicles in the growing mining sector (see 'Economic Imperatives Generating Interest In Coal', September 25). There may be risks to freight transport growth, however, stemming from the underdeveloped nature of the country's road infrastructure.
The company is employing a proven strategy for African markets, in that it is also offering a full range of after-sales servicing and spare parts. Anecdotal evidence suggests that brands that are popular in sub-Saharan Africa, such as Toyota Motor in the passenger car segment, have built a following by providing spare parts and servicing to ensure vehicles can be consistently maintained. This becomes even more of an issue for businesses, which have a fleet of vehicles to maintain, which is why Renault Trucks' local distributor, Bukkehave, has emphasised that it will be selling and repairing the new trucks, as well as carrying spare parts and supplying mechanics, technicians and driver training.
|Roads And Bridges Infrastructure Industry Value (US$bn)|
The trucks themselves are also designed to be economical for companies, with extra filtration for diesel engines, intended to make the engine last longer, while the truck bodies are built stronger to cope with the terrain. According to Bukkehave managing director, Bernard Horrocks, 'most of the companies are trying to bring products from Europe and America but Renault said they wanted to develop a product for Africa'. Again, this move toward localisation of products is another tried and tested strategy in Africa, and one which has in some cases generated investment in the beginnings of local production (see 'Toyota Looks For Lead In High-Growth Region', October 7).
In terms of its target sectors, we do see risks to demand from the haulage sector on account of Nigeria's largely underdeveloped road network, which scores the lowest according to the World Economic Forum's Global Competiveness Index 2011-2012, out of the 12 Middle East and African countries covered by BMI's Freight Transport team. On the upside, BMI highlights that US$34.34bn is expected to be invested into the country's transport infrastructure in the medium term, according to our Infrastructure Key Projects Database. The majority of projects will be undertaken in Nigeria's road and bridge infrastructure.
This is a necessary development as Nigeria's internal freight mix is dominated by road haulage and as long as the rail network is still largely underdeveloped, this will continue to be the case. However, the booming demand from the consumer sector will put increasing pressure on the country's internal transport network, which is already highly congested.