At first glance, Iveco had a terrible 2014 in the light commercial vehicle market, with sales down 15% in a market that was up 19%.
But simple statistics do not tell the whole story – and Iveco’s new managing director Bob Lowden is keen to reveal the full picture.
In an exclusive interview with Fleet Van just three weeks after taking over the helm in the UK, Lowden said the reason for the fall in sales was not that fleets are failing to buy Iveco products but was instead due to problems with the changeover from old Daily to the new one last autumn.
Lowden says: “The fall in yearly sales sounds worse than it really is. We had problems with the phase-out/phase-in of the old and new Daily and we just didn’t have any to sell at one point. In fact we lost the equivalent of a whole month’s sales.
“But if you look at the December 2014 figures, when the new Daily was fully available, our sales were 17% up. Now this brand new model is available, we expect Daily sales to rise by 20-25% in the coming year.”
Lowden has just returned to Britain after a spell heading up Iveco’s business in South Africa and it would be difficult to imagine a boss who has more knowledge of the fleet market and its needs and wants.
He has an engineering background but also holds a degree in business and economics. Add to that list a former career running a truck dealership in the north east of England, and working for Iveco in several different senior roles since 1990, and Lowden’s credentials become clear.
He rejoins the Iveco team at a crucial time, with the launch of the new Daily, which has just been voted International Van of the Year.
The new van features a host of improvements such as a more functional and better quality cab, redesigned exterior, engines that offer up to 5.5% better fuel economy and improved ride and handling.
All new bosses are keen to stamp their mark on the business as quickly as possible, and Lowden isn’t any different. He has plans afoot to promote Daily sales to a wider audience.
He says: “I am pretty satisfied with the offerings we give to big fleets. As we are a truck manufacturer, we offer truck levels of aftersales service to van buyers, such as 24/7 servicing and an unrivalled breakdown service using our own dedicated repair men. But I do feel that we need a greater presence in the high street, to attract smaller fleets and retail buyers. We want to make Daily the choice of van for a lot more people.”
The way Lowden intends to carry out this plan is to extend the number of outlets at which the Daily is sold. At present there are 63 dealers (plus a further 30 service points which do not sell vans). He hopes to open a further 10-15 sales/service outlets in 2015 and more in the coming years.
“Some of these could be among the service outlets and we are also looking for entrepreneurs who feel they could make a business by setting up a Daily centre. Small fleets and retail buyers will not travel long distances to buy vans and have them serviced and we simply have to have more centres,” says Lowden.
All well and good, but can these extra outlets offer the high levels of aftercare that are available at present?
Lowden says: “It just won’t be possible to do this at all the centres, but we believe that smaller outfits don’t expect quite so much anyway. We feel they will be quite happy with what we have to offer.”
One of Iveco’s perennial problems is that fact that it only has one van on sale below 3.5 tonnes, which means that fleet operators who want a solus deal with various different sized vans can’t be catered for.
So, just how big a problem is this for Iveco?
Lowden: “We don’t really see this as a problem at all. Yes, we can’t cater for the smaller end of the market, but at the other end we offer vehicles up to 44 tonnes and there are many fleets out there who want solus deals starting at 3.5 tonnes and upwards, which of course we can cater for. Only one other van manufacturer can offer a deal like that.”
One thing that has puzzled many industry pundits is why Iveco has not maintained closer ties with Fiat – after all they are owned by the same company. Such a move would mean the firm could offer solus deals on cars, vans and trucks of every size.
But Lowden firmly rules out any closer tie-up in the future. In fact, 18 months ago Fiat and Iveco were placed in separate hands. Fiat has joined with Chrysler to form a car and van division, while Iveco is now part of CNH Industrial, which includes the Case and New Holland agricultural brands.
Lowden says: “We wouldn’t want Fiat car dealers to sell and service our vans as we don’t believe they have the right business mentality to do so. As for Fiat Professional, they have teamed up with DAF to share some dealerships and as DAF is one of our main rivals we wouldn’t want to share our business with them.”
New Electric Daily: ‘payback within six or seven years’
A brand new Daily electric van is set to be launched in the UK later this year – and Iveco bosses believe that this vehicle may finally bring zero emissions technology into the mainstream in the heavy van sector.
Iveco has been selling the electric Daily for several years now and while this van has been reasonably successful in Europe, the firm has not sold a single model in England.
But, says product director Martin Flach, things are about to change: “We have invested heavily in electric technology but this was very much for the long term – we didn’t see it as a short-term business opportunity. We have learned a lot from our past efforts and this new van should really bring the Daily electric out of the shadows and into the mainstream.”
The Daily is new from the nuts and bolts up. And the electric variant now has a longer range, up from 80 to 120 miles. It can also now be fast-charged – say, during a lunch break. It will not suffer any payload penalties over the diesel versions, despite carrying heavy batteries.
Flach says: “We believe these improvements will make this van more attractive to a lot more buyers and we are already talking to councils and parcel delivery firms in London with a view to putting some examples on fleet.”
One of the problems is that an electric Daily costs around £50,000 more to buy than a diesel one. But despite this massive difference in front-end costs, Flach still believes it can make economic sense: “Most people who choose this van will do so because they want to be seen to be green but, even so, if the vans are used in London on a daily basis, we reckon payback will come within six or seven years. As vans like this won’t be doing huge mileages, we think after that time they will still be in a very saleable condition.”