Russia: Racing ahead?

Have you noticed the press articles about how many other economies are doing better than the Euro zone countries and even the UK? We certainly have.

It has been part of our strategy even to investigate these large growing markets. Last week I attended a Russian Aerospace and Automotive sector event organised by the UKTI.  Although this did focus on the passenger car market and commercial aircraft market, it was clear that the expectation of Russian indigenous manufacturers are intending to compete with foreign imports, as the impending admission of Russia to the World Trade Organisation, will open up this market to foreign manufacturers imports. The standards being adopted are akin to those in Europe and equivalent to ISO or DIN, and in some cases almost copied. We were however warned that it is essential to check that we meet necessary legislative requirements which are and will remain local, even if the requirements are the same, approvals still need to be sought.

I have seen reports for also that suggest that the Russian Government has to invest heavily in transport, and that Truck builders need to make 1000’s more trucks, just to be able to deliver the ever increasing amount of construction and agricultural vehicles that this market will be demanding over the next 5 years.

With events such as the Winter Olympic Games in 2014 at Sochi, and the World Cup after Qatar, there is a huge investment in infrastructure. This is driving the demand for new construction equipment, and the manufacturers are quick to react, designing new vehicles to compete for their slice of the market.

The Bus market too is on the rise, and according to Truck and Bus Builder, the Russian Bus market is up by 9.3% overall with some builders reporting a 47% increase in sales. And these vehicles are no longer the stereo typical old fashioned vehicles years behind the west in terms of technology and design. They are up to date, modern looking vehicles, packed with the latest technology in transmissions, retarders, and even Hybrid vehicles. This is one of the reasons that we are exhibiting at Busworld Russia this year. We believe that the Russian builders have advanced so much in the last few years, that foreign imports will find it hard to compete, and the fact that so many manufacturers are putting out new vehicles, means that the opportunities for companies such as ours that can offer design as well as rapid turnaround, will definitely have an advantage over some of the home grown competition.

We are very excited about the opportunity to enter this market. Are you thinking about Russia as a target? What are your fears or concerns?

Design your own products?

Here is an interesting idea from Agco Design the Tractor of your Dreams.
They are running a competition whereby you design either the whole tractor or elements of it, and the winner gets to go to the Valtra factory, meet the designers, and take part in a customer clinic to help develop the next generation of tractors.
You could take this one of two ways, the Agco designers are all out of ideas, or it is a very clever way of inviting the end user to offer up ideas that they would pay extra for.
I am not so sure we could do the same for steering. I wonder how often our customers (vehicle builders), talk to the end users about what they would like to see. What if we were to ask Bus drivers what they find most infuriating about the steering on the buses they drive every day, or tractor drivers what adjustments they would like to see on the steering column to make their life easier, then design products around those requirements, instead of those that our direct customers tell they want. I guess a lot of businesses just assume that their customers will do that work, but what if they did it instead?
The Chartered Institute of Marketers will tell you that the most successful companies are those that make and sell what the customer wants. B2B companies regard their customers as other companies, because that is who they sell to. But at the end of the day, they are not the end user. Someone told me once that if Henry Ford had asked his potential customers what they wanted, they may well have told him, a faster horse that doesn't need to eat, sleep or go to the toilet. Not that they wanted a car. His solution was to develop a way to make cars as cheap as horses to own, with all the benefits outlined above. For B2B companies, the hard bit would be to sell the fact that the customer is willing to pay more for the benefits. I think that this is a great way of testing the market to gain competitive advantage. Does anyone know of any other such schemes where companies are asking their customers to design their products, or know of any in the past that were successful?