Ready to roll - UD Trucks enters Korea

It’s a crowded market, with four import truck brands and two domestic already fighting for market share. But autumn 2012 saw the launch of the Quon into Korea—and, with its first owner now ready to get on the road, optimism is high for the brand.

Traveling south from the capital city of Seoul, one quickly realizes that this is a country on the move. The highways are broad, four and five lanes in both directions, hosting a constant stream of passenger cars and trucks. Along the way are towering clusters of apartment buildings, the satellite towns being established to reduce the pressure of population in the center of Seoul itself.   Korea is not a big country, but it is a big economic and, increasingly, cultural power. Its economy is in the top 15 in the world; it is the seventh largest exporter. That means that it needs a lot of trucks to move things around, and that is why we are at the spacious, new facilities of Sunjin Corporation, about 80 kilometers south of the capital.

Here we meet Yongju Kim, a happy, but also clearly impatient man. He’s happy because his new truck is here, ready for Sunjin, one of the country’s best body builders, to put a wing body on his truck, which is now just the cab and bare chassis. The wing body splits open like the wings of a bird, allowing fast access to the cargo inside.

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Yongju Kim, the first UD Trucks customer in the country, in the cab of his Quon

He’s impatient because the body isn’t yet completed, and he wants the work finished so he can get his truck out on the road and working.

It’s not just any truck, either: Mr. Kim has, in fact, bought the very first UD truck ever sold in Korea. The official product launch only happened a short time earlier, on September 19, 2012, at a gala event in Seoul; we meet him just about a month later. It’s a bold move, entering a market where there are two domestic companies that dominate some 75 percent of the market, and five other international brands, including family company Volvo Trucks, fight for the rest. But Mr. Kim has some good reasons for making his purchase.

“I’ve been driving for 15 years, and I’ve tried them all,” he says. “I’m tired of struggling with the problems with local brands, so I’m really looking forward to driving the Quon.”

Like 85 percent of his counterparts in Korea, Mr. Kim owns and operates his own truck; he’s slightly unusual in that he has three trucks, so he could almost be seen as a fleet operator by Korean standards. Most are one-man, one-truck, family-operated businesses, with the wife often the president on paper and the person who handles business inquiries while the husband is on the road.

And, on those big highways, they’ll be on the road a lot. “Most operators will drive about 400 to 500 kilometers a day, but I usually go about 800,” Mr. Kim says. He picks up eggs or other agricultural products in Gwangju, in the southeast, delivers them to a bakery plant in central Korea, travels to the agricultural markets of Seoul, then heads back home. “Uptime is critical for me,” he says. “I had heard that these are reliable, durable trucks, so I decided to buy one. If it works well, I’ll replace one of my other trucks with another Quon.”

Japanese trucks have been imported into Korea in the past, say Youngjae Kim, president of UD Trucks Corporation, Region Korea. “We may not have a lot of experience yet with UD Trucks, but we do with Volvo Trucks,” Mr. Kim explains. “Volvo Trucks established its own marketing company in Korea in 1996, with sales beginning in 1997.” It rapidly grew in the market to take the number-one position in the import truck segment, which also includes Iveco, MAN, Mercedes-Benz and Scania. The domestic producers include Hyundai, the market leader, and Tata Daewoo, a locallymanufactured subsidiary of Tata Motors.

Mr. Kim adds that Nissan Diesel (the predecessor of UD Trucks) was imported into Korea in the 1990s by a local partner. “These helped build a positive image of engine quality and reliability, and many are still on the road more than 20 years later!”

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President Youngjae Kim, with one of the launch/showcase Quons

“We are communicating that UD Trucks are made in Japan as a proud member of the Volvo Group,” says Chang-ha Lee, Director of Vehicle Sales & Marketing. “People do appreciate Japanese technology, and the high level of craftsmanship. They know that UD Trucks also utilizes technology from the Volvo Group, one of the world’s largest makers of truck diesel engines, renowned for their fuel efficiency. We will focus on the durability, reliability and economy of the brand.”

Now, with their message in hand, it’s time for Mr. Kim’s staff to start selling those trucks. While they have set some fleet targets, such as a foreign-based company that owns one of the largest chains of discount stores in the country, a lot of the sales work will be with the one-man operators. And that implies creating a very strong personal bond with them.

“It’s definitely very much about building warmth, trust and respect,” says Hyunchul Lee, Manager of UD Trucks’ Marketing Communications Team. “We always talk to the people respectfully, and we never call them ‘driver’! We always call them ‘operator’ or ‘president’ (Mr. Lee is referring to Korean usage, in which it’s common to append the job title to the person’s name, such as ‘Lee-Manager’). You have to remember, a truck can be an investment that’s worth more than an apartment!” And, he says, he and other sales people even have truck driver licenses. “I’m working on my trailer certificate right now,” he says. “That way we can talk to them on the same level; they know that we can drive, too, so they respect us for that.”

“We’re also looking at this in the long run: it’s a marathon, not a 100-yard dash,” Youngjae Kim says. “The UD approach is going to be different, and we’ll talk a lot with people about the total profitability over the truck’s lifetime—that the initial cost, which will be higher, is offset over the long run.”

The relationship between driver and truck is even clearer at the dual-branded Volvo/UD workshop in busy Incheon. Near the port, the airport and industrial areas, it’s a prime location for taking care of trucks. As Hongkun Kwak, Director of what is known as the “own dealer network”—dealership directly owned by the Volvo Group, walks through the spotless new service area, worried-looking driver/operators peer over the shoulders of service staff. “We would prefer if they stayed in the customer part of the building (which is equipped with everything from coffee and canteen meal service to a sleep area and lounge with cameras displaying everything going on in the service bay), but we know how concerned they are. The trucks really are their life. When they’re down, they’re not making money.”

The Incheon workshop is already flying UD Trucks flags, and has the UD logo fixed to the side of the building. “I expect that the brand will do well, because customer expectation is growing,” Mr. Kwak says. “People ask, ‘What is UD?’ when they see the logo, but there also is understanding spreading in the market that this is a sturdy, reliable truck. So we’re really excited to get going with UD.”

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At the unveiling ceremony in downtown Seoul

They will be ready as more UD trucks enter service in Korea: eight workshops have completed training programs and added UD parts, a number that will rise to 15 by the end of the year and 25, including three own workshops, in 2013.

If the new buyers are anything like Yongju Kim, it should be a very pleasant process. Mr. Kim personally drove to the predelivery inspection (PDI) station in southeast Korea to pick up the truck himself, before driving north to Sunjin. “It was a very good experience,” he says. “The truck was very simple to operate and easy to drive—a good, solid feeling.” He’s curious about future technology as well, already asking about the possibility of an automatic transmission (see the story on page 18 for more on this). “So now I’m just pushing, pushing these guys to get my body done,” he says, then smiles. “I just want to get it out on the road—and I’m the only one who gets to drive the Quon!”