Adekunle Adekoya
4 May 2008
interview
Lagos — YOUTHFUL Kolawole Ogunbajo is the managing director of Avis Nigeria, the global car rentals giant.
Ogunbajo cuts the picture of someone who is impatient with the system, as it were, in his country, Nigeria, and he has reasons to be, as will be seen in the conversation below which held in his Apapa office. Responding to a question about airports, his impatience with the system became palpable when he said that running efficient, friendly airports is not as difficult as it is made out here, and subscribes fully to the bid to concession airports if it will make them more business friendly.
HOW do you think the car rentals business could thrive in our kind of economy?
For car rentals in Nigeria, I would say it is the best in terms of providing short term car rentals to individuals and corporate bodies and big organizations that do not want to bother with fleet management as part of their services and with the introduction of renting of cars in Nigeria we are here to provide such service. I've been all over the country in the past seven months and we are located in Lagos, Abuja, Port Harcourt and Warri and in the next three months we'll be in Uyo, Calabar, Yenagoa and Benin.
What is the profile of the business like; how do you get customers? How do you get people to patronize you?
That's a very good question. Now you would agree with me that the world is a global village now and there are different means of communicating with the customers. What we are doing is to create the awareness in terms of advertisement - advertising through different media, the radio, the television, the website, direct marketing of our services with individuals and organizations and God has helped us to move fast because we are on the global Avis network and we are connected to seven thousand, two hundred (7,200) locations in one hundred and twenty-one (121) countries all over the world. So, with that performance, the business flows in on the individual side and on the organization side as well and that helps a lot and that's part of the advantages of having a franchise.
What is the competition like?
In Nigeria today, there's no competition because we don't concentrate on the competition. Though we study them, we don't concentrate on the competition because, as I said, the market has been going well.
What is the clientèle structure like?
I would say our clients are divided into three groups. I would say the first one, which is about fifty per cent, comprises Nigerian individuals and corporate bodies; another thirty per cent are the multinationals, while the remaining twenty per cent are foreigners coming to Nigeria that want to use our service.
How does the peculiarity of the Nigerian environment - state of the road network, the security situation and other systemic hiccups-impact on your operation?
Well, you will agree with me that every region in the world has its own problems associated with running a business. With Nigeria, so far, the problem we face or the challenges are the bad roads. The roads are bad but not all the roads are bad, there's the problem of traffic, problem of power, the fuel situation. Now, what we've done with each of those factors is to try and build at least a wall that will protect our business. Now, because the roads are bad, we will be running the business on high cost because we will have to be changing tyres and spares; so what we do is invest a lot in training of our chauffeurs, and when we train them, we try and get them familiar with the road network especially in the north or south-west area.
In terms of traffic, traffic is only intractable in Lagos and part of Port Harcourt; if you go to other parts of the country, the issue of traffic is less. With Lagos, what we've done is work one or two hours ahead of schedule, like if a client calls and says he needs a car at a particular place and at a given time, we try and make sure we are there, especially if it's advance booking. Once it's advance booking, we can plan very well. If you want our drivers to be at your house by 4p.m. or 5p.m., they'll be there. Sometimes in the service industry there can be problems; take for instance UK's Heathrow Airport Terminal 5, they spent billions of pounds, yet the problem are there.
Even in the service industry, problems will come up but you have to deal with those problems as you go along and when you are solving problems, it creates new ideas of how to create new ways of doing business, those are the areas we try to concentrate on. On security, we make sure they are where they are meant to be at the right time. So far we've had our problems but we've tried to cope in the kind of environment we operate in.
Are you into tracking?
Yes. In fact, tracking is good for performance. When you track a vehicle, you know when it is due for servicing, you can check the mileage, you can know know exactly the ending parker, to show you all the movement from day one. So tracking is very good, apart from security, it helps a company to know the bottom line and you will actually know where all the vehicles are.
Part of your operations are around the airport, either you take people from the airport or return them to the airport. How do you see our airports?
With the airport and the relations we have with car rentals, Nigeria is really under developed. Every continent, apart from Africa, like Asia, North-America and Europe, all the major car rentals have their offices near the airport and they have hotels because hotel business, car rentals are inter-related but here in Nigeria, it took us months to get a place at the airport.
What was the problem?
The problem was..........you see, I can't really say (shakes his head in frustration). Even when one director agreed to it, all the other directors approved it almost immediately but the problem with the airport was too much. Meanwhile we had agreed to start in almost two weeks. The director of commercial investment agreed and approved it but there's always this problem. Even up till now it takes time to secure space in all the other airports and we tell them that this is an added advantage as an emerging market if we have this kind of thing running. People coming into the country, we want them to feel safe. For those who don't know, once you travel out, you can book your hotel, you can book your car rentals, you can buy a mobile phone, you can do everything at the same time but here they think it is a luxury whereas it is a necessity - all the things that businesses need to be online. The other one is logistics.
There is only one airport here now that is actually trying to do what airports in the rest of the world are doing. Of course they have their shortcomings, but I give credit to them because of what they've done. The other airports in the country, I don't know what they are really up to, but we're hoping government will invest more and make sure that all these airports are brought up to standard and all these additional businesses like hotels, car rentals, logistic companies are all situated in the same heartbeat so that at least it provides a free flow of this business.
This underdevelopment you talked about, don't you think it's a matter of attitude, or mind set?
Well, I've noticed something, you know in Nigeria we always like going through the back door even though the solutions are always very easy. That's from my own experience. I've made applications to two or three airports now and nothing has come out of it, even when FAAN (Federal Airports Authority of Nigeria) has approved. Some airports are actually okay, some are difficult, the people there you tell them what you are doing and they know what you mean but some of them are difficult.
Airports are the first entry point of any country that visitors come in contact with. If you get to most of these airports in Nigeria, it is true that they are under developed and it is bad and I will implore the government to do more on these areas, make sure all the facilities are working. Nigeria is the giant of Africa but the people want to frustrate people like us that want to encourage these things because when you travel abroad and you see these things, it's not a difficult thing, it's so easy to do. We are not telling them to give us money, we are the ones to provide service, we want to present the country in good light, all these things are possible, it's no magic, it's so easy to do.
Once you put your mind to it, you'll do it; so we are imploring the government to make sure that people that will run our airports are people that understand the business of travel and the businesses that are associated with running an airport, not just the airport alone. Let them run it well and make sure that everything is working, let them know that al these other businesses are complementary while people that are coming into this country can easily book an hotel, can have an aircraft that can take them to Abuja, Port Harcourt. You go to our websites, you see our other business services, you'll see our local flight, Virgin Nigeria, Bellview. We put all of them there. All the hotels in Nigeria are also there so when people are making their bookings for car rentals, they can book their hotels or call them and also call their airlines within Nigeria.
Would you in that situation support the bid by the Federal Government to concession airports?
Government cannot run these businesses. I am in support of the government concessioning all these airports; I can assure you that all our airports will be able to run effectively and, like I said, once the airports are run effectively, all these fall-out business will come in line and, when you get to Maiduguri, it will be the same standard, Imo, the same standard, Lagos and the airports will be well taken care of. Just make sure that the necessary infrastructure, the lights, the communication, everything is working properly and all the departments are okay, that's all.
You are a Nigerian, you must have followed in the media the reports about the concessioning of similar facilities in the past like the seaports. Do you think we are really capable of doing this kind of business?
We are capable. Let me give you an instance. If the government for some Nigerian state's concessioning is bad, this concessioning would not run properly. We can always learn from people that have done it well, countries that have done it well. These countries that have done it, how did they do it? Let's see what they've done, let's see their environment and let's see what suits our own environment in terms of concessioning. We don't have to copy them, we just have to pick some valuable things that are working in their countries that we believe can work here. So, back to car rental, the factor to introduce self-guide is not good in Nigeria. So we now look at what factor will work well in Nigeria and the ones that won't work well.
Our credit card system seldom works properly, we are still developing our debit card system here. You improvise something to the store, sometimes the network is down; not that the service is not very good but it is just that the network is not available. The platform keeps developing, so we can plan which is a good thing with developing, we get there very soon. That's where we are now. If you go to some countries, they won't just give you the car, they will ask for certain things. So it depends on the environment, that's why we implore the government, if you want to concession, let's see which one our people in Nigeria can do well. Okay, the one that we can't do well, let's admit our failures, our shortcomings, and say okay please come and help us and after we study them, the next set of people coming in will take over.
Do you have in mind examples of countries we can partner with, any that has concessioned successfully?
I know of ACSA (Airports Company of South Africa) that is operating one in India, and others in Europe.
Apart from car rentals, what other services do you render?
Fleet management service is a core area we're taking our time to offer. This management service involves going to the client, buying their cars, their choices, do the training, the insurance, everything. All the company wants is a certain number of drivers and vehicles to be in wherever locations they desire in Nigeria. We signed the contract with them. The advantage to that company is that it makes them concentrate on their core business so they don't have to start worrying themselves on how to manage when the car breaks down, when some particular drivers are not reporting to work. In fleet management, we take care of all these things and that's why we try to partner with most companies in Nigeria.
How do you see the role of car rentals in the development of hinterland tourism within the country?
Car rentals are always in any available location in Nigeria now with individuals or people coming into the country. We can provide such services if they can identify where they want to go to like Jos, Ikogosi, etc. With car rentals, these places are now accessible because we need services for tourists, for Nigerians at home and foreigners coming into the country. Some might say they want to see some places in Lagos and we take them, charging the normal fees.
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