Name : Freddy Karlsson
Position : General Manager
MI : When was your first visit to Myanmar?
I first came to Myanmar in June, 2007. The reason was that Octagon representatives visited the Bauma fair held in Germany which was the biggest fair for yellow ma- chines and moving equipment around the world. They met our Scania people at the exhibition and showed interest in working together with Scania so I visited Myanmar in June 2007 for two days. And I made frequent visits after that trip until December of 2014 and I was transferred here in April last year.
MI : What was your impression of the country then?
I think that it was very peaceful due to the fact that there were no telephones in work, basically there was no internet and at that time I was responsible for seven countries in Southeast Asia and every time I came here it was like on vacation because no one could reach me.
MI : How did you end up as the General Manager of Scania Myanmar?
I was the General Manager, from 2004 to 2013, for Scania Export Market in Southeast Asia which was for Myanmar, Vietnam, the Philippines, Laos, Cambodia, Bangladesh and Brunei. I worked with Octagon which was my customer before so I know very well people here. And their business was getting bigger as, at first, they had Liebherr, Scania, Kone and nowadays they have BMW. They needed a general manager for each brand and I got an offer of if I wanted to take the position of the General Manger for Scania. My contract with Scania expired by the end of 2013 and after a break of three months, I started working on 1st of April 2014.
MI : What is your opinion on country’s current automobile market, especial- ly on commercial buses and heavy machineries sector?
When it comes to buses, I think there is a good future for coaches and Scania is the market leader for the time being in Myan- mar. With the good infrastructure there is between Yangon and Mandalay and also some other good roads, I see there is a good potential for buses in the future as the rail-
road is not really modern basically. So I think buses will be the means of transportation and the bus market will be good for many years to come.
MI : How was Scania officially introduced in Myanmar in the first place?
Octagon is an independent distributor and is a non-captive Scania. Scania has its captive in Thailand, Malaysia, Singapore and non-captive in Vietnam, Indonesia, Myanmar and some other countries. Officially Octagon got the distributorship for Scania in October 2012.
MI : What is the target market segment for Scania?
We will continue with buses and business coaches. We are also looking into possibilities of city buses as I think Yangon city has to do something with traffic situation in order to get a better public transportation.
MI : What are the expectations of Myanmar customers and how differ- ent are they compare to other countries? And how is your team Scania Myanmar trying to meet their expectations?
Their expectations are the same as every- where. They want to have high quality with low prices which really doesn’t go well to- gether as high quality normally come with a high price. They also want to have a reliable product which doesn’t break down with a low operating cost. And I am pretty sure we are meeting the expectation of delivering a high quality product but may be we’re not the cheapest as we normally charge with a premium price but if you’re looking over a certain life time of a vehicle, one normally says that a purchasing price represents approximately ten percent of the total cost.
MI : What do you think are Scania’s unique selling points compared to Korean, Japanese and Chinese commercial buses already existed in the market?
The first part we can offer is the high utilization on vehicle. We have a low operating cost and good fuel consumption which is one of the best fuel consumption on the market. There’s no product that goes with- out any maintenance and doesn’t break- down so the second part is the backup that we offer. Octagon has done a fantastic job of having the best dealing network in the country. We have service centers in Nay Pyi Taw and Mandalay. By having such network where we have trained staff and spare parts and so on, we can also backup the products very well.
MI : What are the things that make Myanmar different from working in other countries?
The really main difference what’s annoying me sometime is traffic. Now the traffic is terrible. When I came here in 2007, the traffic is beautiful and there’s not much problem. I think it started in 2011.
MI : What is Scania current market share like for commercial buses?
Since we have started selling buses which was basically in 2011, there might be roughly 350 to 400 buses.
MI : Who would be Scania’s regular local customers and in which way purchases can be made?
Our biggest customer is Elite. I think they have almost a hundred buses. The second biggest one is Shwe Mandalar. Of all our lo- cal customers, we have some in Yangon and some in Mandalay. Normally, there’s some kind of financing in the purchase deal.
MI : From which regional production centers Scania coaches are exported to Myanmar?
Scania is only making chassis which come from Sweden and the other parts come from different body-builders. There are a couple of regional production centers; there’s one in Middle East and for example Singapore, Thailand and Malaysia also has one each. But for Myanmar, we are not involved in
those regional centers and as far as I know there is no body builder here so we are sell- ing in complete products. Chassis come from Sweden and some of the body from Malaysia and some from Brazilian Marco- polo which is one of the biggest body builders in the world and some buses directly come from Scania.
MI : How can Scania guarantee its safety and what effects Myanmar’s road system has on its buses and trucks?
As a passenger, there are mainly three things you’re looking for and they are com- fort, reliability and safety. For comfort, you want a comfortable seat and for reliability, you don’t want the bus to stop somewhere in the middle of Yangon and Mandalay. And safety of course, you don’t want to have any accidents. The most important thing when it comes to safety is the driver. It doesn’t matter how much safety you have, a bad or irresponsible driver might screw up every- thing. So we have driver training when we deliver new vehicles. And the buses that we have are equipped with as much safety as you can actually get into the buses. We have ABS (anti-lock braking system) and EBS (electronically controlled break system), ESP which is electronic stability program and we also have adaptive cruise control (ACC); if you come too close to the vehicle in front of you, the bus will brake by itself. Now all those lately delivered buses contain alcohol interlock; you can’t start the bus if you have been drinking. After blowing into the device, if you have been drinking, the bus will stop. We put as much safety in the buses as we possibly can. The difference between buses we are selling here and the European buses is basically none. The technology is as advanced as we have in Europe.
MI : How Scania is trying to extend its market apart from commercial buses?
Yes, of course we’re also selling trucks. If you’re looking at the worldwide picture, trucks consist of 90% of Scania business and buses of ten percent. Coaches are minor part worldwide, however, in Southeast Asia due to limited railroad network and huge amount of people, buses in Southeast Asia account for 45 to 40% and the trucks the rest. So, trucks are the biggest part of Scania. However, when it comes to Myanmar, I think we have delivered about as many trucks as we have been deliver- ing buses. We have been delivering 350 to 400 buses and we have something similar when it comes to trucks. Trucks are something we are looking into all the time. We are also selling gensets.
MI : What are Scania’s objectives for Myanmar market?
Well, the objective is to sell as much as possible. On the bus side, we are the market leader and well-established and we want to maintain that position. So what I feel that we need to do is to straighten of our sales and to give our customers good service. On the truck side, we need to look into different things and one thing that we would like to do is more of the on-road segment of continual transport transform.
MI : What kind of current projects your team has been working on and what are the future plans?
I think this is an ongoing business. We are launching some new bus models but the business is more of ongoing rather than with projects.
MI : From a business standpoint, what do you feel are the biggest challenges facing you and your team in Myanmar in next 1-3 years?
There is always a risk of legislation coming in which is not beneficial for the business and a risk of financial crisis like what hap- pened at the end of 2008 and 2009. I think Myanmar market will grow and there will be more and more foreign players coming into Myanmar and also local players, in or-der to be competitive, we have to adapt the business and the logistic will be more and more important and in order to get import- ant logistic, you need the infrastructure and modern equipment.
MI : What effect do you think that the sudden influx of foreign companies/ nationals will have?
Of course there will be more business opportunities for us to sell trucks and equipment mainly. I also see a kind of threat that you will have an over-heating market. There
will be fighting for staff. For the employees, that will be very good as the salary will go up and much more companies will fight over for qualified staff. There is a risk that there will be a shortage of qualified staff.
MI : What advice would you give to someone looking up to start up a business and invest in Myanmar?
First of all, I think you need a local partner in that you are never better than your local partner basically and the locals understand the market much better than the foreigners. Also you need to secure qualified staff and I think it’s a big challenge.
MI : If you could make one major change to any government policy, what would it be?
I think it’s strange that double-deck buses are not allowed here. A double-deck bus is a very good way of utilizing capacity because you have two levels in there. Many countries like Thailand, Malaysia, Singapore and so on have double-deck buses. For the road you have between Yangon, Nay Pyi Taw and Mandalay, it would be perfect and it’s good for the country. The running cost of a doubledeck bus is not much higher than that of a single bus and it can transport about twice the number of people.
MI : How are you enjoying your days in Myanmar?
I have fairly long working days here. I spend over an hour to get my work and over an hour to get back home again. I spend quite a lot of time on my family here. I have a hobby drag-biking which I normally do on Sundays and I eat out a lot with my family during weekends.
Name : Freddy Karlsson