It’s fair to say that the official launch of the Valx brand at the 2010 IAA Commercial Vehicle Show in Germany was a game-changing moment for the European trailer axle industry. Then part of Holland’s MCB Group, the novice seemingly ignored the traditional market hierarchy and staged itself as a fresh alternative to the German establishment – boasting a distinct international edge and a firm commitment to innovation.
Helped by a stunning visual campaign rolled out both traditionally and online, the young brand’s British Racing Green-inspired colour scheme quickly gained traction in the market and would have probably caused the competition some serious embarrassment had the trailer market not slowed down so dramatically in 2011 and beyond – not just because of smart publicity, but also because of the convincing value proposition behind it.
Even with the Eurozone crisis silhouetted against the horizon, though, Valx’ integrated axle module – combining innovative componentry supplied by Fuwa, Wabco, TMD, Timken, SKF and VDL Weweler in a price competitive package – had a notable impact on the market and earned the company a fan base stretching from Portugal’s Atlantic coast all the way to the Russian capital of Moscow.
In 2014, with Europe slowly recovering and Valx studiously stealing market share from the powerful German competition, Fuwa stepped onto the scene to – via Australian Fuwa-subsidiary, Fuwa K-Hitch – acquire what had hitherto been but a somewhat nonconventional client business. Sensing the disruptive potential behind the brand, Fuwa K-Hitch hoped it would be able to bring the necessary firing power to the table to help Valx shake up the market once more and finally break into the top three of the European sales ranking.
To do so, a new management team led by Joop Arends as Managing Director and Martin van Willigen as Sales Director was appointed, and the Valx head office was moved to a new location in Veghel, The Netherlands. From here – with guidance from the new Australian parent and an ever-present, highly ambitious and equally resourceful Chinese mother ship – the company is now ready to take on the establishment once again. Global Trailer spoke to Joop Arends and Martin van Willigen about Valx’ second coming and their agenda as the new faces behind the brand.
Q: There has been a bit of a news lull on Valx between the Fuwa K-Hitch take over at the end of 2014 and the installation of a new management in early 2016. Please talk us through what happened in between.
A: You’re right, it’s been a bit quiet around the Valx camp of late, but behind the scenes a lot has happened – most importantly the move of our head office and the announcement of a new management team, which is a process you simply cannot rush. Think about it: Via Fuwa K-Hitch, we are now officially part of the global Fuwa family, so it’s been quite a substantial evolutionary leap for our small company. Fuwa is the biggest axle manufacturer in the world and has already opened a lot of doors for us in the market to ensure our product will be even more competitive in the future. Product development, for example, has been extremely accelerated by being so close to our main supplier, and the input we’ve received from our group companies in Australia, China and the US has been invaluable too. For our customers, the main message is that our new parent is a company with the same core business as us – axles.
Q: In line with that, in how far has the new ownership changed Valx as a brand? Has there been any strategic readjustment?
A: From a brand perspective, not a lot has changed – Valx has always done an outstanding job on that level. Even now under new ownership, we will continue to operate independently and deliver a high-end European product. What has changed is the scope of our operation, though: Helped by the Fuwa group companies, we’ve quickly learned that the Valx product is suitable for export markets outside of Europe, too. Quite a few of those markets use specifications that are comparable to, or derived from, European standards, and many of them value our robust design – so we see a lot more opportunities globally today than we’ve seen in the past. Of course it also helps that the product had had time to prove itself in the field over the past five or six years, because now we know just how versatile it is, both on and off the highway.
Q: Building on that, where do you see Valx compared to the German competition at the moment and in five years’ time?
A: We are part of an interesting market dynamic in Europe that’s very similar to trailer building: There are the big two, followed a big gap, and then there’s quite a few who want to be the number three, including Valx. However, we don’t know exactly what our competitors do and we prefer to focus on our customers and ourselves instead. As such, I’d say Valx has the potential to become a top three player in the next five years, but we are not in a hurry. After all, you need to be realistic and acknowledge that our competitors do a great job, too. We just have to be different and provide a Smart Alternative, as we call it.
Q: Did Fuwa’s involvement give you some sort of confidence boost in that context?
A: Yes, I think so. There is no doubt that when Valx first came into the market, people looked at it with a certain amount of caution – some deliberately taking the time to see how the product performed over the long run before committing to it. Now that we are 100 per cent owned by a global powerhouse like Fuwa, there is obviously a lot more brand integrity and staying power behind it, which has helped us gain the same kind of trust from the market our competition has.
Q: With that in mind, what’s your unique selling point as a brand?
A: Our USP has remained unchanged since we stirred up the market at the 2010 IAA – we have a highly flexible and relatively small team that has a direct connection to the client. We have a flat organisation, short lines of approval and no bureaucratic apparatus holding us back. This enables us to act fast and be different. For example, we can tailor our standard products to a certain degree to fit the design envelope of the trailer builder or specific requirements of the fleet with minimal lead-time. That’s a new level of service for any marketplace.
Q: Speaking of which, if there were such a thing as a business barometer for trucking in Europe, what would it say?
A: It’s hard to generalise. Western Europe is doing very well at the moment, for example. Most countries have recovered and even southern Europe is experiencing strong growth again. We have a strong presence there, so this is good for business. Unfortunately, eastern Europe is still down, though. No one knows when these markets will recover and to which extent, which is equally daunting and exciting.
Q: What do you mean with that?
A: Let’s take Russia as an example: Traditionally, Russia imported a lot of second-hand trailers from the West. With the current currency rate, however, there will likely come a shift to local manufacturing that will see local trailer builders having to compete with their western European counterparts. To do so, they will likely require European running gear.
We have been working hard on our service network in that region and closed some promising deals with local trailer builders, so we’re ready should that scenario come true.
Q: Back in central Europe, low margins have forced many an OEM to diversify and bring axle production back in-house over the past few years – starting with Schmitz Cargobull and now followed by Krone and Kögel. How does that development affect you? Is it a tough situation, or probably even somewhat easier handle given the company is still young and flexible?
A: Firstly, this development affects all axle builders, not just up-and-coming businesses like Valx. Although the trailer building market is growing, the market for axle builders is shrinking; but I still think you are right when you say we can change a threat into an opportunity. Like I said before, we are flexible and can customise our standard product easily if need be, even at volume. It’s also important to note that the trailer builders who are now operating in the axle space have also developed their own air suspension systems. At Valx, we can modify our axle beam to fit the interface with their air suspensions, so we remain in the game on that front. I also don’t think the generic OEM products include drum brake options, but we can still provide that as an alternative, too.
Q: A fellow industry executive said in a 2015 interview that the only way to deal with the increasing competition was to diversify – either on a product and service level or geographically. What’s Valx’s strategy here?
A: In The Netherlands we value the old ‘cobbler, stick with your last’ saying. That doesn’t mean we’re not open to diversifying, but we’ll be careful as to how far we’re willing to go. As such, Valx will definitely diversify in the future, but we will limit this to what we are good at. We will widen our axle range and will also introduce our own landing leg, for example, the e-Leg. Powered by an independent power supply, the e-Leg’s electronic motor is able to raise and lower landing legs at the simple touch of a button, which is revolutionary from a safety and health perspective.
Q: With so much in the pipeline, who do you think is currently driving the growth behind the Valx brand – the big OEMs, small trailer manufacturers, or maybe even fleets looking for a new alternative?
A: Fleets usually decide which axles they want under their equipment, but what we’ve learned is that the trailer builders, big or small, also have a big say in the decision making process. So I would say all three groups are driving growth, especially since so much is happening at the same time. We’re seeing that all of them appreciate our fresh approach to the market.
Q: Going forward, what can we expect from Valx at the next IAA Commercial Vehicle Show?
A: I can already reveal that Valx will introduce a new air suspension in Hanover. The current MBS suspension is an extremely versatile suspension, but the new suspension will be even more fit for purpose. We listened carefully to our customers and made it easier to install for the trailer builder, as well as easier to maintain for the fleet. The axle will remain the same, though.
Q: So there won’t be any fancy composite concept axle, for example?
A: No, we will focus on introducing our new air suspension and e-Leg instead, which will provide a direct benefit for the customer in the field. GFRP is an interesting concept and will arguably be lighter than steel, but at this stage, it is still considerably more expensive – so we remain sceptical about it until we see the business use. We’d rather stick to perfecting existing technology in the meantime and be able to offer the most cost-effective solution for the market, because that’s what Valx should be all about.