Agility invests in 35 Mercedes-Benz Actros 2145 trucks

“We had the option of investing in any one of the leading truck brands. Several factors influenced our purchasing decision, starting with the acquisition cost. We found the pricing of the new Actros models highly competitive compared to its previous models as well as competitor models. The new, technically advanced features of the Actros 2145, particularly the Euro 5 engine, offers improved fuel economy, performance and safety. All these features matched our expectations for reduction of operating costs,” says Bassel.

Bassel El Dabbagh, CEO of Agility Abu Dhabi, and Bilal AlRibi, general manager of Emirates Motor Company – Commercial Vehicles.

A long-standing business relationship between the companies also played a major role in the deal. Agility has been purchasing trucks from EMC for over a decade.

“We value the openness and responsiveness of EMC, which has always prioritised our demands and offered customised vehicles, specifically to address the challenges of our working environments. When we place an order for trucks, we are interested in the dealer’s speed of delivery.

We’re accustomed to EMC fulfilling our orders in a short period of time. We needed Euro 5 trucks on the road as soon as possible and Mercedes-Benz offered to deliver it before any other truck supplier in the market,” says Bassel.

The need for Euro 5 trucks couldn’t have been more apparent. The operating costs of fleet operators in the UAE such as Agility have been increasing with the rise in fuel prices.

“Fuel has become a major component of our operating costs. With the Euro 5 engines, we expect to reduce fuel consumption by at least 10%, which will amount to significant savings for our customers,” says Bassel.

Last year, Mercedes-Benz, like all other manufacturers, responded to the Emirates Authority for Standardization and Metrology (ESMA) mandate that all trucks imported in the UAE from 2018 must meet Euro 4 emission standards, and launched both Euro 4 and Euro 5 compliant vehicles with engine improvements and higher fuel efficiency.

However, the price sensitivity of the UAE market has always been a challenge to selling new models. Initially there seemed to be a market reluctance to adopting Euro 5 trucks because of a price increase in the range of 5-10%.

Bilal AlRibi, general manager of Emirates Motor Company – Commercial Vehicles (EMC – CV), points out that it was only a matter of time before fleet operators evaluated their long-term operating costs and realised the benefits of upgrading to Euro 5 models. In the case of Agility, the investment decision was facilitated through a collaborative approach with EMC.

“We’ve been working with Agility for several years not only as a supplier of trucks and services but as a partner for optimisation of their operating costs. We’ve been able to do so because of the maturity of Agility’s systems and the interest from their management to understand and incorporate the best solutions for their business. When we understand each other’s businesses thoroughly, the focus shifts from the initial acquisition cost of the vehicle to total cost of ownership (TCO) over a period of 5–7 years with fuel and maintenance included in the calculations. For example, the improved safety features of the new models such as active brake assist, proximity control assist, and lane keeping assist leads to a reduction in insurance costs, and automated transmission provides 5% reduction in fuel consumption compared to manual transmission. When we calculate all these savings over a period of 5 years and more, that’s when customers see a reduction of 7–10% in their TCO,” explains Bilal.   

EMC and Agility also work as research partners. The collaboration provides EMC valuable data such as vehicle performance and drive behaviour through the Mercedes-Benz Fleetboard system, which enables Mercedes-Benz and EMC to improve their vehicles and services. The new Actros 2145 variant will use Microtransport, Agility’s proprietary telematics system. However, data sharing will be enabled through integration of Agility’s ERP systems with Fleetboard.

“Soon, we will receive valuable statistics from Agility’s utilisation of their Euro 5 models in the UAE, and this will help us improve our offerings for the logistics industry in the future,” says Bilal.

Agility’s service contract with EMC is solely based on the ‘cost per kilometre’ metric, which shifts the business model from Agility acquiring vehicles, parts, and services, separately, to EMC supplying all of these products and services as an integrated service. Everything except fuel is included in EMC’s service contract. Agility also opted for extended warranty of 5 years.

“Generally, our service contracts are customised according to the cost per kilometre. It’s important that the customer understands the maintenance cost for a year and have a projection of the costs for at least the next 5 years. This enables fleet managers to budget their annual maintenance costs easily when they have a holistic view of all costs with a single metric,” says Bilal. 

Bassel indicates that speed of service is equally important as the service itself, because timely, preventive maintenance reduces the pressure and cost of actual maintenance during the lifecycle of Agility’s trucks. Agility has a team of technicians from EMC at its disposal for first and second-line repairs of its vehicles at EMC’s workshop situated close to Agility’s depot in Abu Dhabi. When they face downtime in remote locations, Agility turns to EMC’s mobile workshops.

“This eliminates the need for Agility to stock parts or worry about fuel consumption, safety, performance, breakdown, repairs and maintenance. It helps us focus on our core business of moving and managing goods,” says Bassel.

“EMC differentiates itself among other dealers in the market with its strong aftersales capabilities. In the past few years, we’ve seen increasing demand for onsite maintenance. The ratio of maintenance at stationary and mobile workshops has reversed from 70:30 to 30:70,” says Bilal.
EMC also provides tyres and tyre management services through its sister company Central Motors & Equipment, which represents brands such as Michelin and Tyreplus, among other automotive trademarks such as Bosch.

“Tyres constitute a large component of the operating costs of a fleet. Therefore, we handle mechanical and electrical works as well as tyre management during vehicle downtime. This activity is efficient as it reduces manpower and maintenance time, significantly,” says Bilal.

Bassel foresees further investment in Euro 5 and perhaps Euro 6 trucks in the near future, as an increasing number of Agility’s customers demand environmentally-friendly and safe vehicles to transport their goods. Furthermore, Agility has seen an increase in distribution orders since Q4 2018 and expects to sustain the momentum into 2019.

“Customers that move high-value goods, particularly, cannot afford downtime and therefore demand the best-in-class vehicles and drivers to achieve their delivery targets. With increase in commitment to sustainability every year, our customers are demanding trucks that comply with the highest emission and safety standards. Such customers don’t accept older models. The progress of this trend will determine our future investments in Euro 5 and Euro 6 trucks,” says Bassel.

“Several fleet operators and municipalities have expressed interest in Euro 5 trucks for waste management and distribution. The UAE market is mature for Euro 6 trucks as the fuel quality in the UAE is compatible with Euro 6 standards. We’ve already introduced Euro 6 buses in the market, and we expect to launch the Actros Euro 6 versions in the UAE in the near future,” concludes Bilal.