Fleet operators across the country are under increasing pressure to keep their fleet on the road for longer with reliable and preventative maintenance plans to minimise costs and downtime.
UD Trucks Southern Africa (UDTSA) is pleased to have witnessed an increase of 50% on its service and maintenance contracts (Service Agreements) in 2024, which means that one in every two trucks sold has a Service Agreement contract in place. This laudable success underscores UDTSA’s commitment to delivering lifetime value to its customers, guaranteeing uptime, profitability, and increased second-hand value.
To further build on the company’s previous year’s performance, the importance of maximising uptime with customised maintenance plans, and strategies in place to increase customer absorption, we engaged with Pravesh Bhima, General Manager: Service Agreements, UD Trucks Southern Africa.
1. What motivates you every day?
What truly motivates me every day stems from my core belief in being customer centric. In my current role, this translates directly into the immense satisfaction I derive from:
Ensuring uptime and reliability for our customers: Knowing that our Service Agreements directly contribute to the smooth operation of our customers' businesses and minimise disruptions is a significant driver for me.
Building strong and lasting relationships that are based on trust and understanding: Being customer-centric means prioritising strong communication and building relationships where our customers feel heard and understood. The satisfaction of forging these partnerships and knowing we are a trusted support system for their operations is incredibly rewarding.
2. What’s that one book, habit or piece of advice that has greatly influenced your career?
In Gaur Gopal Das's book, "Life's Amazing Secrets”, he speaks about how to find balance and purpose in your life. The book uses the analogy of a car with four tyres (personal life, work life, social, and relationships). The book illustrates how neglecting any of these areas can lead to an unbalanced and difficult life.
3. As the General Manager for Service Agreements at UD Trucks, what factors do you consider when designing the maintenance plans?
Designing effective service agreements requires a multifaceted approach. Here are the key factors that we consider at UD Trucks:
Customer needs and operational requirements (application, usage, fleet size, etc),
UD (OEM) maintenance requirements (service interval optimisation, OEM standards, etc),
Consider competitive pricing (ensure revenue offsets expenses, while ensuring market-related pricing)
Ongoing data analysis and continuous improvement, reviewing history and identifying areas of improvement.
4. How do you determine the pricing structure for these plans?
There are 3 components that drive the price of the plan, together with the application, truck mode, and duration:
The cost of genuine UD parts,
Competitive labour rates, and
The pricing of UD-approved lubricants
5. Elaborate on the current Service Agreement plans that UD Trucks offers?
Currently, UD Trucks offers two types of plans which are designed to cater to diverse customer needs and operational requirements. These plans generally fall into the following categories:
UD Trust Standard: This is typically the foundational plan, focusing on preventative maintenance services as per the OEM's recommended schedules. It covers essential service areas like scheduled inspections, lubricants, and basic maintenance parts. The aim is to identify potential issues early and ensure that the truck remains in good working order.
UD Trust Ultimate: This represents a more comprehensive offering, encompassing all the features of the Standard plan with the added benefit of repair coverage for a wider range of components. This often includes major systems like the engine, driveline, transmission, and other critical elements, providing greater cost predictability and peace of mind. It also includes a 24/7 towing service.
6. What strategies have been most effective in increasing customer absorption?
To enhance aftermarket absorption and foster long-term customer relationships, we actively promote and activate 5-Year UD Trust Ultimate contracts. This strategy offers several key advantages, like guaranteed customer retention, aftermarket upselling opportunities, enhanced dealer profitability, and improved customer experience.
7. How do you track and measure the success of your plans?
We track and measure the success of our Service Agreement plans using a combination of key performance indicators (KPIs) and data-driven analysis. Contract penetration rate, customer retention rate, uptime of Service Agreement Customers vs. Non-Service Agreement Customers, and dealer feedback.
8. Have you made any recent improvements or innovations in the last 12 months? If so, what results have you seen?
To enhance customer value and drive aftermarket absorption, we have implemented a strategic initiative involving a joint financial contribution from both the OEM level and dealers. This collaborative effort has resulted in a significant price reduction on the 5-year UD Trust Ultimate contracts and an exceptional absorption achievement of 50%, which means we are now in a position where one in every two trucks sold has a Service Agreement contract in place.
9. How do you ensure that maintenance plans stay competitive in a changing market?
We have a proactive and data-driven approach. Our key strategies include:
- Ongoing Parts Pricing Reviews: We conduct continuous reviews of the pricing for parts commonly utilised within our service agreements. This ensures we remain aligned with market fluctuations and can offer cost-effective solutions to our customers.
- Strategic Evaluation of Service Interval Extensions: We consistently explore and rigorously assess the feasibility of safely extending service intervals, without compromising vehicle reliability. This optimisation of maintenance schedules directly contributes to reduced operational costs for our customers.
- Robust Budget Curve Management: A cornerstone of our competitive pricing strategy is the management of our budget curve. This dynamic tool leverages historical service and repair data to accurately forecast future maintenance costs. By regularly updating the curve with actual claim-related information, we ensure that our future predicated cost is correct.
10. What are the most common objections customers have about maintenance plans, and how do you address them?
The most common objections we encounter regarding maintenance plans typically revolve around cost and perceived control.
Customers perceive plans to be expensive. We address this by:
Providing a transparent breakdown of the required service schedules, demonstrating the necessity of the included maintenance. We encourage customers to conduct a comparative cost analysis between our service agreements and retail service pricing.
We emphasise our position as the largest UD network customer, which enables us to secure reduced parts, labour, and lubricant pricing, ultimately benefiting the customer.
We explain to the customer that there is a minimum of no downtime, as downtime incurs cost for the customer (lost revenue, missed opportunities, penalties etc) and showcase the cost of vehicle downtime, which is usually not included in the customer calculations.
For the customer who prefers to self-service or use third-party providers:
We highlight the value of utilising genuine UD parts, ensuring optimal vehicle performance and longevity.
We underscore the expertise of our factory-trained UD technicians, guaranteeing high-quality service and adherence to OEM standards.
We showcase that our fixed monthly cost allows the customer to budget accurately, and to concentrate on the core functions of their business.
We provide the customer with the knowledge that a full-service history from the OEM increases the resale value of the vehicle.
11. Are there any emerging trends or customer preferences shaping how maintenance plans are structured?
Yes, the automotive maintenance landscape is rapidly evolving, driven by increasingly demanding customer expectations.
Customers are becoming more demanding; there is a lot of emphasis on uptime, with downtime minimisation. Customers are increasingly prioritising uptime guarantees and demanding solutions that minimise operational disruptions. Our Service Agreements directly address this by ensuring proactive maintenance and efficient service, leading to significantly reduced downtime.
Demand for data analytics and reporting: Customers require access to comprehensive data and reports on their vehicle performance and maintenance history. This empowers them to make informed operational decisions and optimise fleet management.
Growing expectation for predictive maintenance: Customers are moving beyond reactive repairs and expect predictive maintenance capabilities. Our service contracts incorporate scheduled maintenance based on OEM recommendations, and our systems generate timely reminders for upcoming services, enabling proactive care.
12. How do service agreements contribute to UD Trucks’ broader vision of customer support and operational efficiency?
UD Trucks' service agreements are a critical tool for delivering on their "Better Life" purpose and nurturing "Long Life Partnerships”:
By prioritising uptime, foundation of support (Better for Logistics)
Predictable Cost Management – Empowering Businesses (Better for Business)
Building Strong and Lasting Relationships (Better for People & Business)
Ensuring Optimal Vehicle Efficiency & extending vehicle lifespan (better for the planet)
13. How do service agreements help customers improve uptime and reduce unexpected maintenance costs?
In essence, Service Agreements provide a comprehensive approach to vehicle maintenance, shifting from a reactive to a proactive strategy, which guarantees peace of mind for customers:
Proactive Preventative Maintenance
Predictable Maintenance Costs
Reduced Downtime
Genuine Parts and Certified Technicians
Early Detection and Repair
Reducing the risk of failure
14. How do you see Service Agreement plans evolving in the next five years to meet the growing business needs of customers?
Over the next five years, I foresee Service Agreement plans evolving significantly to meet the increasingly complex and dynamic business needs of customers, particularly in the commercial vehicle sector. Here's a breakdown of the key areas of evolution:
Advanced Predictive Analytics: Leveraging real-time data from telematics and sensors, predictive maintenance will become more sophisticated, enabling proactive repairs and minimizing unplanned downtime with near-perfect accuracy.
- Dynamic Service Scheduling: AI will optimize service schedules based on real-time vehicle condition and operational demands, ensuring minimal disruption.
- Service agreements will be integrated into comprehensive digital platforms, providing customers with real-time visibility into vehicle health, maintenance history, and service scheduling.
- Service agreements will shift towards performance-based models, where customers pay for guaranteed uptime rather than traditional maintenance services.
- Improved communication: AI-powered chatbots and virtual assistants will provide personalised support and proactive communication throughout the service lifecycle.
