| Past
Issues |
February
2005 |
Iveco’s
everimproving image
pays off
The year 2004 was a very good year for the industry in general - and for IVECO in particular. We managed to improve sales over 2003 by close to 40%. We believe this exceptional improvement was due to the ever-improving image of the company, its product range and its dealer network.
Based on our research, coupled with key data available from NAAMSA and major financial institutions, it certainly appears that commercial vehicle sales for 2005 will be as strong as 2004. For example, some forecasts indicate a GDP of 4.1%, the ROE between the Rand and the Euro in the region of R7.80 to €1 - and Prime Overdraft Rate at an average of 10.1%. Obviously other macro environmental factors, as well as key fleet replacement cycles come into play. Therefore, we forecast a market of 20 300 units, with a substantial increase in IVECO's unit sales over 2004 due to a number of key strategies, which we are in the process of implementing.
As regards what macro-economic events will shape and/or impact on the industry, as we know, we live in a volatile, albeit fast changing world. However, at this stage, IVECO does not foresee any major macro economical changes which will have a huge impact on the industry during 2005. To the contrary, changes in the sociological, political and technological environments could play a significant role albeit it not necessarily during this year. For example, in Europe, IVECO is in the forefront of commercialising gas and electrically powered Daily Vehicles, as well as buses.
Socio-political events
As to what socio-political events will shape and/or impact on the industry, IVECO is one of the largest exporters of commercial vehicles from South Africa into Sub-Saharan Africa based on the statistics available. Obviously, local socio-political issues affect our ability to sell into the region. One can only trust that the region will remain relatively stable because we have the network into Africa; what we really need is the market demand.
Driver shortage
You ask if the dearth of skilled drivers will continue to plague the industry. To this, the answer is yes, the shortage of skilled drivers is certainly a major issue we as an industry are struggling to overcome. Other factors, such as long working hours and AIDS should not be overlooked. Therefore, other than our current involvement in fighting AIDS, IVECO will, during 2005, act as one of the main sponsors in a local initiative, which will be referred to as "OPS RS AIDS AWARENESS" - more information on this will be forthcoming.
Clean diesel
On the question of whether cleaner diesel will become available and the ramifications of this for new and old vehicles, while huge uncertainty remains whether fleet owners will be able to purchase cleaner diesel from certain retail outlets or not, we believe that we as an industry should form a steering committee with assistance from, for instance NAAMSA, to attack this problem. Contaminated diesel affects both us as OEM's as well as our customers. At IVECO we believe that the diesel leaves the refineries fully compliant to SABS spec. However, afterwards it gets contaminated due to incompetent handling and storage (not to mention adding other substances such as paraffin).
Image of the industry
As regards the image of the industry, we believe that overloading, putting the wrong trucks into the wrong applications, poorly paid drivers and a lack of maintenance go hand in hand. Unfortunately, many of the cash-strapped operators see this as the only way out. The result is without doubt, a poor public image.
Law enforcement
On whether traffic authorities should be more selective in their policing of trucks, it is our opinion that enforcement of legislation is imperative to ensure greater safety, productivity and image of our industry. Environment issues must also be considered with new technology available to help reduce engine emission levels. Vehicles that do not comply with existing and future legislation should be removed from our roads.
New legislation needed
On the legislation front, clearly South Africa is not keeping pace with environmental issues relating to engine emission levels. While many countries are implementing Euro 4/Euro 5 engine technology, we have yet to legislate Euro 2. With South Africa on show to the world during the 2010 Soccer World Cup, legislation needs to be fast-tracked to mirror many of our overseas trading partners.
Lighter materials
As to whether or not more truck components and trailers will be made using lightweight materials like aluminium or Comdex, this certainly seems to be the case. If you recall the recent Auto Africa show, it became apparent that more and more fleet operators are looking at the total life cycle costs of their rigs - not only at the initial purchase price. We believe that certain lightweight materials will prove to offer more cost-effective transport solutions.
In conclusion, we have recently invested millions of Rands in our company-owned dealership in Durban, which proves our faith in a stable and growing commercial vehicle market. Moreover, IVECO believes it will, during 2005, continue to grow and improve its offering to the local commercial vehicle market, as it has managed to do in Europe and other Australasian countries across the globe.
Managing Director, Geoff Richardson
and Jan Nell, Sales and Marketing Director
Iveco South Africa
