Iveco moves up as new products and business plant bite 14 January 2013

Conceding that Iveco's performance last year in three- and four-axle construction vehicle sales was disappointing (35% and 24% declines respectively against 2011), marketing director Marta Nappo countered that in tractor units, the OEM is flying, with an uptick of 47% compared to the previous year – albeit from a low base.

Those were among headline figures revealed at the company's 'state of the nation' press conference for the UK's transport media late last week.

The tractors statistic puts Iveco in the number seven slot, behind Mercedes, DAF, Scania, Volvo, MAN and Renault Trucks. Scania was the only other OEM to see growth, while Volvo, MAN and, to a lesser extent, Renault, witnessed declines.

And with 2013 seeing a ramp-up in production of the award-winning Stralis Hi-Way – first at Euro 5 and, in May this year, Euro 6 for 6x2 tractors – Iveco managing director Luca Sra is anticipating further growth for Iveco in the all-important tractors market.

"We're very proud of the new Stralis, as Truck of the Year 2013," stated Sra. "Fuel accounts for 40% of an average operator's costs, so, with this fuel-efficient vehicle, we're bringing down total cost of ownership.

"We're doing the same again at Euro 6, using Hi eSCR [high efficiency selective catalytic reduction]. Stralis is a great platform for growth."

And that same engine strategy will move into Eurocargo rigids this summer, with Euro 6 8x8s and 6x6s following later in the year.

Meanwhile, in Iveco's core mid-weight truck market, the company also revealed a strengthening position. 7.5 tonners showed 6% growth (albeit against an underlying market growth of 24%), putting it in the number two slot behind DAF.

And it's a similar story with Iveco's two-axle 10—12 tonne rigids (32% up, compared with 2011 against a market rise of 21%, taking Iveco to number three, after DAF and MAN) and 18 tonners (up 25% in a market that grew only 12%).

So does this mean that the trend away from 7.5 tonners in favour of 10, 12 and 16 tonne two-axle rigids – the rationale being improved flexibility and reduced costs – is happening, as predicted by Iveco and others?

No: while there has been growth – and that includes in the 13—15 tonne truck market, too, which saw a 6% rise (although a decline of 9% for Iveco) – the evidence form these figures is not there.

That said, while multi-axle trucks also had a stronger year – with three-axle rigids up 4.5% and eight-wheelers up 22.5% – following improving fortunes in the distribution and construction sectors respectively, Iveco's share at the heavy end was poor.

"Our eight-wheeler share was nowhere near where it should have been," commented Nappo, blaming some of the shortfall on ageing product.

"Our new Trakker Hi-Land is due in the spring. We have big hopes, and even bigger plans, and I think we can safely say this is an area where you can expect to see Iveco concentrate a significant amount of effort in the months ahead."

What about vans? While the overall market for 2.8—7 tonners was down 3.3% in 2012 against 2011 – with the lightest end bearing the brunt as small firms struggled – overall sales of 3.5 tonners were fairly flat – just 0.9% down.

Iveco's sales matched that trend, at 3,593 units of a market total of 63,364. But in the medium to heavy van range to 7 tonnes, the company suffered, with a 30% drop in sales compared to last year, against positive market growth of 21%.

Why? Nappo reminds us that more than 60% of this market is minibuses (up to 4.25 tonnes) and motor caravans. Less than 15% is panel vans, she insists – and, with changes in minibus legislation in 2010 hampering sales, she sees the bounce back in 2012 as no more than the market catching up.

"With a strong commercial range above 3.5 tonnes and our 7 tonne Daily, in fact this is a sector in which Iveco did well," she insists. "In particular, we won a deal for some 600, over 300 of which went as prison security transport vans."

Returning to tractor units, which is where Iveco sees much of its action for 2013, Nappo believes the small decline in overall market sales (7.2%, compared with 52% growth in 2011 against 2010) reflects nothing more sinister that a "more measured approach in the industry to fleet replacement on the run up to Euro 6".

That said, the OEM believes that the looming Euro 6 deadline at the end of 2013, while likely to have little effect on tractors and medium weight truck sales in the first two quarters, may result in some uptick later, as the industry moves to capitalise on lower cost Euro 5 engined vehicles before it's too late.

"We're expecting an increase in demand of possibly 6—8% overall – maybe 4% in medium trucks, but 10% in heavy trucks," stated Nappo, agreeing that those figures are lower than the SMMT's predictions.

For Sra, making that happen and building on Iveco's improvements during this year is about two things: familiarising customers with new products, particularly Stralis and Trakker, as they are unveiled; and meeting operators' expectations in terms of service standards.

"It's about practical added value – allowing operators to maximise revenues and minimise costs – as well as standards, in terms of the Iveco experience," he confirmed.

For him, there are no magic wands – with the exception, perhaps, of government support for green vehicles, which is sadly lacking, despite the rhetoric.

"There needs to be more positive government intervention to encourage adoption of innovative engineering capable of cutting costs for operators and reducing transport's impact on the environment," commented Sra.

"We have had CNG vehicles for 20 years, with companies like Tesco and Coca Cola taking fleets. But we need leadership here: changing to CNG doesn't make business sense, if operators have to invest hundreds of thousands of pounds in CNG filling stations. We need the infrastructure in place," he continued.

"Similarly, operators are holding back from implementing Euro 6, because there's no financial incentive to buy these more expensive trucks before they have to. And, if the Coalition is serious about reducing pollution, there should be a programme to encourage operators to move up from Euro 1, 2, 3 and 4 engines, too."

Instead, Sra stated that, effectively, operators can "buy six Euro 5 trucks today and get one free", compared to Euro 6 truck prices.

"The RPC [reduced pollution certificate] just doesn't offer enough... If you bought and registered a Euro 6 truck today, RPC would return £2,000 over the remaining four years, which doesn't scratch the surface of the increased cost of a Euro 6 truck," he insisted.

"As far as the government is concerned, they can say, we offered the incentive but no one took it up. They've gone for the 'tick box' route, rather than being serious about helping the environment," added Sra.

For Iveco product director Martin Flach, it's much the same with the Technology Strategy Board match funding – most of which is aimed at dual-fuel vehicle trials – being a particular disappointment.

"The legacy of CNG filling stations [from these projects] will be a good thing for alternative fuels, but the problem is that dual-fuel at Euro 6 is going to be much more complex than Euro 5.

"Using that same investment instead to roll out gas stations nationwide would have been a better bet, if the government was serious about pollution...

"Similarly, if the Green Bus fund was applied to trucks, which make up 90% of commercial transport, instead of buses, which are less than 10%, the impact on pollution abatement would be far, far greater."

Brian Tinham

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