Altron CEO Werner Kapp is bullish about the group’s prospects in Southeast Asia and sees the region as a vital to the growth of its Netstar vehicle tracking unit.
Altron has been under pressure to expand units such as Netstar after the unbundling of Bytes Technology. Once a dominant presence in the sector, Netstar had lost ground to competitors such as Mix Telematics, which recently merged with Powerfleet, and Karooooo-owned Cartrack.
However, in its financial statements for the six months to end-August, Netstar reported 26% growth in connected devices to 2.4-million while subscriber numbers rose 21% to 1.9-million. That translated into a strong financial performance, with revenue, earnings before interest, tax, depreciation and amortisation, and operating profit rising 11%, 34% and 45%, respectively.
Cartrack recently reported 17% growth in subscribers to 2,136,610 for the six months to end-September. Mix Telematics surpassed 1-million subscribers at the start of 2024 and together with Powerfleet has subscriber base estimated at 2.6-million.
Tracker SA, another big local player, says it has more than
1-million connected customers.
In Africa, Netstar has operations in Botswana, Ghana, Mozambique, Namibia, Swaziland and Zambia. Further afield, it has a presence in Malaysia and Australia.
Competitor Karooooo also sees Southeast Asia as a growth market.
“In general, that Southeast Asia theatre is a very attractive market for motor vehicle manufacturers. We see that as a growth market. There’s also a nascent stolen vehicle recovery market. And we also see that legislation is driving specific opportunities in telematics,” Kapp told Business Day.
In October, Netstar appointed Morné Grundlingh, who has extensive experience of the region, as CFO. Grundlingh was CFO at Karooooo from 2017 to 2022.
Kapp said that while Altron was bullish about Southeast Asia as a whole, a country specific strategy was s needed to win each of the markets.
“We will look at the strategy per country. We need to feel we have an opportunity to differentiate ourselves. It’s not all about growth or scale at all costs,” he said.
For now, the group sees Malaysia as the main hub for its activities in that part of the world.
“It would be a logical first step for us because we have operated in that market for the past 10 years, though we have been active in other countries, such as Thailand, as well. But Malaysia is a good springboard because we’ve been there a long time.”
Netstar’s long-standing partnership with Toyota has also helped it to expand further into the region.
Besides Asia, Altron vehicle tracking business also has operations in Australia, but that market has been in turmoil in recent years.
“We’ve been in Australia for about six years. I was there three or four weeks ago. That market has been disrupted severely over the last two years because of the 3G to 4G migration. We think that’s settling down now,” Kapp said.
“We’ve got a really good business. I was fortunate to visit some of our key customers and strategic partners. There are opportunities for us to grow there. Whether it’s acquisitive, I’m not sure. We’ve got a base and believe we can grow from that.”
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