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Talking total cost: Swaidan, DAF and Sennebogen

by John Bambridge on Mar 12, 2017

Al Naboodah Group firm Swaidan Trading has been a hive of activity over the past 12 months with a slew of lucrative deals and more recently, with a spate of brand acquisitions.

The first big deal of 2016 was signed in April by First Vehicles — an Omani joint venture between Swaidan and Oman’s Al Izz Group — for the supply of 40 low-floor VDL-brand buses to Oman National Transport Company. In an indication of how shrewd Swaidan Trading is, the establishment of First Vehicles was, from the start, aimed squarely at the bus contract.

The deal also built on the first bus order that Swaidan signed in 2008 with Dubai’s Roads and Transport Authority (RTA) for 518 VDL buses and their service and maintenance over 10 years. At the time, Swaidan secured the distribution rights for VDL buses with the express aim of targeting large RTA contracts.

In October, Swaidan Trading also partnered with another Dutch brand, DAF Trucks, according to Harris Kaladi, general manager for the commercial vehicles and heavy equipment division at Swaidan Trading.

“We hope to have a great year ahead for our division. We are now dealing with nearly 20 brand franchises from across the globe, and we have just signed with DAF Trucks from the Netherlands, and we will soon launch these trucks into the UAE market — so that is one of the products that is being added to our portfolio in 2017,” he says. “We have already delivered the first few trucks to our own company, Al Naboodah Construction.”

DAF Trucks is headquartered in the historically industrial city of Eindhoven, which is also the home of VDL buses.

The brand was previously distributed in the UAE through Al Tayer Motors, but Al Tayer has also been representing competing manufacturer Ford Trucks since 2014.

Kaladi adds: “For the last 15 years they were inactive in the market — so after discussions between the principle and the dealer, Al Tayer gave up the agency and it was awarded to us.”

The heavy truck brand also neatly fills an omission in Swaidan Trading’s portfolio. Previously, Swaidan’s sole truck interest had been Avia light trucks — an Ashok Leyland-owned Czech product. The agency is not such good news for Dubai’s Al Shirawi Enterprises, which as the distributor for Scania in the emirate was previously supplying all of the trucks for Al Naboodah Construction.

For the Al Naboodah Group as a whole, however, the inside order is a win-win. It keeps the cash flow in-house and, as Kaladi notes, acts as a type of indirect marketing as well, by allowing potential customers to come and have a look at DAF trucks.

Kaladi adds: “We already have around 15 trucks on the road and there are 60 more on the way. The first 35 trucks will be in operation with Al Naboodah Construction by the end of March, and we hope to have 150 trucks on the road by the end of the year — that’s our plan for 2017. Given the market situation and size, 150 is a good market share.”

Kaladi is also plenty confident that the trucks will take off in the market for reasons beyond the fact that Al Naboodah Construction will keep buying them.

He attests: “Whoever has experienced DAF will prefer to go forward with DAF because of the quality of the end product. It is considered to be one of the best trucks among European trucks. Even in Europe, DAF Trucks became the number one truck in 2016 for tractor heads and it is currently in third position for rigid trucks.

“So as far as the product is concerned, it is of the highest quality, and there are operators in the UAE that consider quality to be the position to take — so we will initially be targeting only those customers who value quality of total cost of ownership.”

Kaladi reveals that Dubai Municipality also used to be a staunch customer, with an entire DAF fleet, while a number of waste management firms, including Bee’ah, are also counted as former customers.

He continues: “For a lot of companies, downtime costs them a lot in terms of their operations, so they would prefer to go for a reliable product over the price of the truck.”