Opportunity’s Whining

As I depress the accelerator of this Toyota Hilux in Bamako, Mali, more than just combustion is
at work. In this vehicle, like in most modern double-cab pickups, over the rumble of the diesel
powerplant you can pick out an ascending high-pitched whine. Turbochargers, or ‘turbos’ for short,
coiled contraptions that force high densities of cooler air into an engine to increase specific output,
are both the source of the unique sound and the reason that automotive manufacturers can offer
more power and torque from smaller engines, saving fuel along the way.

In Africa, the double-cab pickup represents the leading segment of new vehicle sales. Robust, with
an external load-carrying capacity and usually equipped with four-wheel drive, double-cabs are
prized not only for their polyvalence but for their value for money. In most markets these vehicles
are taxed less heavily than more passenger focused segments, with government customs offices
reasoning that load-carrying vehicles are more likely to be used for work and business that helps
develop the country. This is not always true of course, and their value proposition means they are
heavily sought after by private buyers too. In most African markets double-cab pickups represent
upwards of thirty percent of all new vehicle sales, and a strong majority of these are diesel-powered.

On the other end of the automotive spectrum are heavy trucks, carrying the big engines pushing
forth development projects such as road construction, mining and bridges. These are also
predominantly diesel-powered and most of them have turbos too. In the mines, all kinds of heavy
equipment runs twenty-four hours a day, seven days a week, almost all on diesel power. And if that
machine has wheels, it probably has a turbo.

Ask anyone with automotive or mechanical experience in Africa what is missing from the experience
of ownership and that person is likely to mention an aspect of after-sales support. From the
availability of spare parts to the paucity of experienced and professional technicians, most vehicle
owners have stories to tell about how the after-market has failed them. In the past, the real
issue was that African markets were emerging in every sense. Little infrastructure was available.
Electricity was spotty. Technicians had not been formally trained. And markets simply weren’t big
enough for large companies to focus their attention on. It made sense that support was hard to find.

Today, the obstacles are less, but the support problems linger. Nuevva believes that much of the
reason for this is that businesses are not doing a good job of identifying the opportunities. Today,
many projects die because of the assumption that problems will mar execution rather than from the
problems themselves. For those who look, Africa is brimming with real opportunity.

Turbo International (TI) CEO Seth Parks, working from his office in the unlikely location of Carlsbad,
California, sees these opportunities like opening doors. His company manufactures replacement
turbo components for a wide variety of global vehicle applications. His parts serve more than five
thousand automotive and heavy diesel turbo applications and can take a vehicle from moribund to
like-new in a matter of hours. ”In Africa, there is both inadequate diagnosis of turbo problems and
insufficient means to repair these problems” says Parks. Most African countries have lots of dust in
the air, the precise conditions most difficult for turbos to deal with, so their components get damaged
and performance suffers. But because after-market support entities like workshops have limited

diagnostic equipment, “many problems go ignored or are miss-diagnosed”. If they finally figure out
that the turbo is having problems, “they either remove it, leaving the vehicle permanently disabled, or
they replace the whole unit.” Replacement costs five to ten times more than repair, the option Turbo
International specializing in facilitating, and is unnecessary in ninety-eight percent of turbo-related
failures.

Parks called Nuevva CEO Matthew Bader just weeks after stepping into his job. Looking for ways
to stimulate sales growth in traditional markets like North America and Europe is a challenge, there
is immense competition and limited potential growth opportunities. The potential in Africa is huge,
because this is a whole new space, but will service an existing segment with real demand. The
problem is educating that demand.

TI has engaged Nuevva to do just that, and it is already bearing fruit. Nuevva is using its in-country
connections, focusing on west Africa, to work directly with workshops and others that do diagnostic
work. Nuevva is working with Prestige Motors, a company it represents internationally, to improve
the diagnostic capacity of local workshops in Mali, hold stock of turbos in its warehouse, and to
support similar operations in Burkina Faso.

Parks believes the opportunity will pay off. ”You have to be realistic about the time this will take, it’s
not a standard sales curve and we’ll need to adapt to the market there. But we think we can do fifty
thousand dollars a month next year in west Africa alone and with time those numbers will increase
substantially. This is an opportunity we will continue to invest in.”

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , ,

3 Responses to “Opportunity’s Whining”

  1. Klown
    April 17, 2012 at 1:49 pm #

    When it comes to Common Foreign and Security Policy (CFSP) – the second pillar of the EU, cooperation between Member States has intergovernmental character, which means that EU and its institutions have few competences in CFSP and Members State conduct their foreign policy independently from the Council, the Commission and other Member States.

  2. Reid
    June 11, 2012 at 3:07 pm #

    Wonderful blog! Do you have any recommendations for aspiring writers? I’m hoping to start my own blog soon but I’m a little lost on everything. Would you propose starting with a free platform like WordPress or go for a paid option? There are so many options out there that I’m completely overwhelmed .. Any recommendations? Appreciate it!

    • Nuevva
      June 12, 2012 at 8:17 pm #

      It’s all WordPress. Thank You! Please go like us on facebook.com/nuevva

Leave a Reply