King Long – The start of a long climb
The start of a long climb
If I had a prior relationship with a company as bad as that which I have had with the former King Long regime, the low point of which was being thrown off their stand at the NEC because one member of the team did not like what he had heard I had written in the past, I would not rush to write about them again.
Readers will therefore understand why I felt more than a little reticent about accepting an invitation to visit the Birmingham headquarters of King Long Europe UK Ltd and hear about the new set up and their plans for the future. My reluctance was not lessened following claims by people I respect that the old regime was still involved.
At the same time, B&CB has always endeavoured to cover all aspects of the business and ignoring a major manufacturer with a sizeable UK parc of vehicles is not something we are comfortable with. On top of this, we had been promised that not only was everything completely different now, but I would get straightforward answers to my questions. So recently I went to the new Garratts Green facility near to Birmingham Airport to meet up with Managing Director, Christopher Cassar. We were to have been joined by Paul Nicholson who is Sales Director on a freelance basis, but he was ill on the day and unable to make it.
I have known Chris for over a decade, having (I think) first met him in his native Malta when BMC was supplying buses there and he was supplying King Longs. His relationship with the company goes back around 17 years. He was directly employed as a consultant and European distributor by the Chinese manufacturer and set up their European sales operations, including appointing the original UK and Irish distributors for the brand. Chris retained this broad European responsibility until December 2016, since which time he has relinquished his involvement in other European markets and been solely focused on the UK and Ireland, acquiring King Long Europe UK Ltd from King Long, which now directly manages other European markets. The UK arrangements are ‘indefinite,’ Chris explained.
His more hands-on role in the UK had begun earlier than this in March 2015 following the collapse of the previous organisation. Chris explained that King Long in China was hugely shocked by the collapse and to some extent still is. It wanted to safeguard the interests of its clients in the UK and decided to step in directly with a lot of money to re-establish the company.
‘I’ve spent since then repairing the damage,’ he said. ‘I thought it would take six to eight months but it is so extensive; the deeper I dug, the more I discovered, but with the goodwill of the whole team we now have much more satisfied customers.’ By the team, Chris emphasised that he meant the workers who had been at the previous King Long distributorship.
I was given an indication of how bad some of the problems were, including deposits taken on vehicles that had not been supplied and in one case a bus that had been paid for and not delivered. To try and look after these customers, those who had lost deposits were given substantial discounts on new purchases and a deal was arrived at with the operator who had lost out entirely, and he now has three new coaches.
‘We are learning from it and trying not to repeat that past,’ said Chris.
It is a considerable personal commitment on Chris’s behalf and has seen him relocate to the UK to take it on, though he retains his Malta home and travels back there regularly to see his family. As he puts it, ‘I have sacrificed my private life and come to live in the UK for the sake of 200 or more customers with King Long coaches.’
His overriding concern at the outset was to avoid the secondhand market being flooded with used King Longs for which there was no support in place. ‘It could have made it impossible ever to sell another King Long in the UK,’ he said. Referring in part to King Long’s own commitment to the enterprise, he said, ‘We think it is honourable to respect the people who trusted you by buying King Long vehicles.’ The aim was to prevent the situation where a huge imbalance could have formed between what operators owed leasing companies for their vehicles and what their value was, and he is confident that this part of the challenge has been met. Clearly, he admits, ‘There is commercial logic behind this,’ and claims, ‘Now King Long depreciation values are settled and established within the UK.’
The new business has now been split into three different divisions within the one company, although all three have separate bank accounts. These are: spare parts, new vehicle sales and a division that combines aftersales, maintenance and secondhand. The logic behind the combined division is that secondhand vehicles invariably need attention of some sort and often need to work together.
The directly employed team today numbers ten people with functions such as accounting and IT subcontracted and the sales team employed on a consultancy basis in line with the initial remit from King Long to keep costs down as far as possible while rebuilding.
Along with Chris, the key figures are David Hoy, for many years Chief Engineer at Yorks Travel and later with Bowens, who looks after the aftermarket side and former ADL man Keith Jones, who looks after parts. He is set to be joined by another experienced electrical engineer. Plans are in hand for further recruitment in the aftermarket team in order to be able to take in more work such as preventive maintenance and work on older King Long vehicles. ‘Since we started offering this service, clients have responded and they feel safer trusting our capable people,’ said Chris.
Although Paul Nicholson acts as Sales Director and also employs a number of other independent salesmen to promote the King Long brand, it is not the intention of either party that this situation continues in the longer term. The plan is that the company will directly employ a sales team. ‘We are looking to augment the sales team with a view to the longer term,’ Chris said.
He explained that King Long’s support had enabled the business to re-establish itself. ‘Now it is taking off, we can pay our bills and be self sufficient,’ he said. ‘We are now like any normal company.’
Initially the business ran from the former Bakers Travel facility in Biddulph which was rented from Hino Tours, before Chris located and took on the lease for the new Birmingham premises at Unit 2, Bannerley Road, Garretts Green Industrial Estate, Birmingham B33 0SL in mid 2016. With a vast yard that could house upwards of 50 buses and coaches, an existing workshop with pits and a suite of offices, it is about as ideal a location as could have been hoped for. In addition, it is extremely well placed for the transport network, within easy reach of rail and motorway connections as well as Birmingham airport. Chris’s intention is that the business should never need to move again.
A priority was to re-establish an Aftersales presence and ensure that it did what operators expected of it. To do so, it was important to recommence trading as soon as possible after the collapse and to accomplish this Chris did something that he has since come to regret. He explained, ‘We took over a dormant company from the old operation because we needed a VAT number and a trading entity quickly. Our lawyers did due diligence to check it was all clean. In hindsight I would have set up a new company, but I was green and I thought it was the quickest way. I couldn’t sell parts without a VAT number.’
‘I know people are saying that it is still the same people, but it isn’t,’ he said. ‘A person from the former regime was working on transferring data from their computers, but he never worked for us.’ Chris was insistent that no other members of the former management team now had links with the operation.
One criticism I remember of earlier King Long coaches was that obtaining replacement parts following accident damage was very difficult, and when they did come they didn’t always fit. Acknowledging this, Chris said that they now had the benefit of the EPC (Electronic Parts Centre), which contains all details for every vehicle including full plans and diagrams, ‘so you don’t get the problem of replacement panels that don’t fit.’
Stock levels have been increased massively and now exceed £1,000,000 in value. Chris commented, ‘Since we moved, we have been rebuilding the inventory. Every month a 40foot container arrives from Xiamen with smaller loads every week. When we need small parts, we can get them delivered via express air freight. We have a good network system with the European dealer network whereby we only charge each other freight.’
He continued, ‘We carry all glass for everything. I’m really pleased with the increased parts levels we carry. Parts sales are going up month on month, partly because we are ringing round, but also because there is now faith that operators will get the correct part they need.’
As part of a regular programme of customer contact calls, carried out by the ladies who manage the office functions, customers are being called regularly to identify whether there are any part requirements or other services that the company can provide. It has helped to reinforce the message that the company is still there, active and keen to provide ongoing help. The reaction they encounter is overwhelmingly positive though there is understandably still some reticence about buying new examples of the brand.
To further help ensure that any issues that arise can be quickly sorted, there is always a Chinese member of the King Long team on hand in the UK to assist. Three people are on a four month roster, all of them good English speakers. A further development is that a vehicle can now be connected via computer directly to China, enabling the factory to re-programme a system if David Hoy or the appointed aftersales dealer is not able to identify a fault without assistance.
Two things that will encourage potential buyers relate to the way King Long buses and coaches are built, because corrosion was a significant issue on some early examples. Firstly, since 2016 they have benefited from greatly improved corrosion protection. The 6129 and 6130 have fully catophoretically dipped monocoque structures while those with separate bodies and chassis have the two parts dipped separately.
Secondly, the plant at Xiamen now has a separate production line dedicated to high end markets that I was told all UK products go down. Those employed on it are selected, the build pace is slower and there are more people working at each stage. ‘It’s a big plus,’ said Chris.
Also of great importance is the appointment of Euronet, an international company based in Germany, which is affiliated to the AA in the UK. Chris explained, ‘It means that if you are on the continent you get King Long Assist 24/7 which no other importer has. There is an 0800 number for KL Assist and if you ring it at any time you can get all the help you need whether it is assistance, a replacement coach, hotel bookings or whatever. This has been up and running since August and though it has not yet been used much because King Long products are more reliable, when it has, it has been useful.’
He continued, ‘It is good for operators if you know you’ve got 24 hour assistance when you go to Europe. It’s a very good system and it has saved us from a big headache. We pay the membership charge for the first two years for each new coach and operators can use it at their own cost thereafter. Older King Long coaches have all been registered to receive it at their own cost. People used to say we had no service but now we have something that operators can see does work. Every call is recorded and followed up until the matter is closed.’
The range being offered is a familiar one to UK operators with products of between 9.0m and 13.7m. There are six coach options: the 9m C9 with up to 35 seats (or 31 plus toilet); the 10m C10; the C12 at either 12.0m (6127) or 12.2m (6129) with capacities of up to 49 plus toilet or 53 plus toilet/55 straight respectively; and the three-axle C13 at either 13m or 13.7m. In addition there are the lower height two-axle intercity/day tourer or school models which are either 12.2m (6120) or 13m (6130) long with up to 60 or 70 seats accordingly. On the bus side there are currently two two-door low entry models; the 9.17m long B9 and the 12m B12. I understand that a three door 12m version for airport work has been homologated and is working in Hungary, so could also be made available.
On the order front, King Long is not tearing up trees at present though progress is being made. Chris commented, ‘The situation has improved and orders are now being delivered to customers.’
‘We are not getting as many sales as we would wish because we are telling the truth,’ he said. ‘Warranty is two years. We give people reality, they now get what they were sold, what they signed for. We are trying to build a company with a good reputation and happy end users. This is what we want.’
Despite this there have been orders. They include a pair of C12 (6129s) for Hunters of Leeds, who now have 11 King Longs and will part exchange two of them. Also taking C12 6129s are J&B Coaches of Leeds and Eamonn Rooney of Northern Ireland. It is the C12 that has been the best seller to date, but Chris is confident that the C13 has a lot more potential in the market. An order has also been taken for a C9 midicoach for Heyfordian who are celebrating 70 years in business this year. Other orders for the coming months are two C12 6129s for McCombs of Belfast, a 6130 school coach for JKT International and two additional C12 6127s for Deveron of McDuff in Scotland. Going forward, stock C9 and C12 coaches will be built, but not C13s which tend to be more bespoke in nature.
Significantly, a repeat order is about to be supplied to Airparks who are based just down the road from the new premises. Three B12s (XMQ6127s) are currently on the water on the way from the plant and will enter service on arrival. They will join three existing King Long XMQ6127Js with 12 and 13 plates running for Airparks in Birmingham. I took a walk down with David Hoy to see a couple of them between departures and they seemed to be standing up quite well to the rigorous airport work. With extensive racking towards the front of the interior, the single door vehicles are certified for 31 seated, 11 standing and one wheelchair passenger.
Although Chris sees King Long’s current UK market position as ‘a bit on the low side,’ he says they are ‘working to be where we have been before and where we belong.’ He thinks it is realistic to think that they might sell 25-30 this year and perhaps a maximum of 40 next year unless one of the new products really takes off. They are looking for niche markets and he reckons there is a saturation point beyond which it is difficult to go.
Important to long term acceptability of the brand are residual values, and here King Long has suffered in recent years. I put this to Chris who seemed very relaxed about things, accepting that there had been an issue, but claiming, ‘We’ve worked on it and we’ve reached our goal. We’re happy to take in used King Longs at the market price in good condition.’ The organisation is marketing its part exchanges through a combination of magazine advertising, mail shots and the website, not that they have many at present, though there are a small number scheduled to come in. The only one on the premises when I was there was an 08-plate King Long XMQ6127.
Chris said that he had yet to decide whether to exhibit at any trade shows this year.
Chris goes to China monthly but reckons it will perhaps be a little more often this year, ‘because we are developing and I like to be hands on.’ These developments are for the future, for 2017 it is ‘about growing with what we have rather than expanding the range.’
He commented, ‘We definitely want to be a key player, and also with electric buses. We plan to bring in a very comprehensive solution on electric buses and we are trying for the end of year. We are discussing with operators the possibility of putting one into service in London. It would be a completely King Long built 10.8m bus.’
Expanding on the specification, Chris revealed, ‘We are using standard Lithium ion Chinese batteries that have been proven in service in China. The vehicles offer advantages on weight and technology as well as information systems. We are aiming to offer really good value for money so that operators are getting a lot more for their money. Our proposition will be in conjunction with the manufacturer and the battery supplier but we will separate the battery and vehicle in terms of the financial package.’ He believed the electric city bus would offer much more potential for sales than the diesel had achieved because of the benefits it offered.
King Long’s range is a wide one and another new development that is scheduled to make an appearance around the year end is a minibus design. It is a monocoque design capable of taking 16 passengers and offering wheelchair accessibility.
Nobody is pretending that it will be easy for King Long to rebuild the industry’s trust. Those who have had bad experiences will have less inclination than I to give the new team the benefit of the doubt and risk investing with them again. Christopher Cassar knows this, and he is putting a considerable amount of commitment and emotional capital into ensuring that the project succeeds.
He has reason to be hopeful saying, ‘Considering what the brand has been through, and it has suffered a big blow, it is going very well.’ Asked how he expects things to be in five years time he said, ‘We won’t have so many enemies for sure, we’ll be seen as reputable; those things I can promise. In sales terms I can’t predict, anything can happen.’
King Long really cannot afford to get it wrong again this time and those in the new team are determined that their hard work will ensure success.