How a big customer made DAF Trucks better

TAIWAN —The customer knows best—it’s a saying in business that’s been around for as long as anyone remembers. As passé as it sounds, it still holds true especially when you’re looking for a dependable business partner to a 13.37-billion-dollar business.

The world’s fifth largest chemical company by sales, Formosa Plastics Corporation is also one of the biggest publicly listed companies in the world according to the Forbes Global 2000. With an extensive and diverse portfolio of products of everything from plastics to textile, the Taiwan-based conglomerate continues to maintain its founder Wang Yung-ching’s four guiding principles: Diligence & Frugality, Ultimate Excellence, Sustainable Operations, and Dedication to Society. As such, they formed their own automotive group, the Formosa Automobile Sales Corporation (FASC) in a bid to service their own company’s logistics requirements.

Founded in 2005, FASC chose to partner with Dutch truck manufacturer DAF because of their aligned corporate values. At that time, the Taiwanese market was cornered by the typical Japanese choices, but because of Formosa Plastic Corporation’s exacting transportation requirements, they wanted to shift to a more reliable, more durable European truck brand; after all, these heavy-duty trucks have to run for at least eight years—the typical truck lifespan in Taiwan.

DAF itself is no stranger to making formidable trucks. Founded in 1928 by brothers Hub and Wim van Doorne, DAF Trucks is known for its reliability, durability, and class-leading driver comfort. In 1996, DAF Trucks was absorbed into the PACCAR, the group behind American truck brands Kenworth and Peterbilt. Known for their lower tare weight, DAF trucks have better fuel economy and higher payload capacities than its competitors. Together with sturdy designs, powerful engines, and a broad range of engine and axle configurations, they offer a versatile range that offers low cost of operation.

With a Japanese-designed facility in Da-du, Taiwan sitting idle from a stillborn passenger car business, FASC and DAF set to work and, in the process, transformed it into one of the Dutch truck maker’s largest assembly facility outside of the Netherlands. Sitting in a 30,000 square-meter facility, FASC now assembles DAF trucks for both the domestic Taiwan market as well as export to markets such as the Philippines. Completing a whole truck every 100 man-hours, FASC assembles around 5 units a day or roughly 900 trucks annually. They are able to assemble DAF’s full range: the LF, CF, and XF including a full customization program.

The decision of FASC to assemble DAF trucks in Taiwan has brought down the purchase price of these trucks. Typically, a buyer would have to pay NT100,000 per horsepower (~P 176,959.27), but these locally-assembled DAF trucks has brought the price down to around NT70,000 (~ P 123,871.49). Combined with better fuel efficiency and lower maintenance cost, it has made DAF the bestselling truck brand in its category in Taiwan, surpassing all their European and Japanese competitors.

Today, Formosa’s plastics business is one of FASC’s biggest customers (they’ve sold over 5,000 trucks to them already) and because of this, FASC pinned its success on the direct feedback they get from their users. This has enabled them to actually improve on DAF’s original designs based on unique Asian requirements such as the necessity for more grab handles or the switch to the use of stainless steel on some parts due to the region’s constant rains.

The same attention to customer satisfaction and hands-on business approach has led DAF Trucks to partner with Pioneer Truck Parts and Equipment Corporation as their exclusive distributor in the Philippines. Already the country’s distributor of other PACCAR brands, Kenworth and Peterbilt, an 8,000 square-meter facility in Cabuyao, Laguna will soon house DAF Trucks as well. Plans are also underway to build showrooms outside of Luzon, with the first one to be in Davao.

With trucking and logistics remaining a cornerstone of Philippines business and commerce, the entrance of DAF Trucks into the market comes at a very opportune time. And like FASC, Pioneer Truck Parts and Equipment Corporation realizes that customers know best. As such, they will take a page from DAF Trucks’ European operations and will offer a complete range of not just new (sourced from both the Netherlands and Taiwan), but factory-refurbished trucks as well. This will enable DAF Trucks to tap into a wider set of buyers, especially those who may be more on a budget.

DAF Trucks will make its Philippine market debut at the Manila International Auto Show 2018 from April 5-8, 2018. In the meantime, customers can check out the Pioneer Truck Parts and Equipment Corporation’s office and showroom at located at 341 G. Araneta Avenue, Barangay Santol, Quezon City.