IVECO has kickstarted the new year with the launch of its new off-road truck IVECO T-WAY and the on-road truck IVECO S-WAY in Dubai. Fabio De Serafini, Africa & Middle East Business Director, Giuseppe Cariello, Product and Marketing Manager, Elvira Ferrara, Africa & Middle East Network Manager, Marco Torta, Area Manager for Gulf Area, Iraq and East Africa and Luca Vinceti, Parts Sales Manager, explain why its new generation of trucks presents an exciting opportunity to grow its presence in the region.
First of all, why is Way-range launch important for IVECO in the region?
Giuseppe Cariello – This is a crucial event in IVECO history of the Middle East because we are launching a totally new generation of products which the market has been expecting for more than 10 or 15 years. So, with the new way range, the new generation is coming; not only for the technology because what I really appreciated in the new range is the versatility, but finally we really have a product which is able to match any customer needs. We extend our capability to satisfy the markets with a full set of vehicles which is really going to strike and increase our presence and capability to satisfy the customer more.
What is the significance of the Middle East region in the wider scheme of things? You’ve done exceedingly well in Tunisia, for example. What about the importance of the GCC for you?
Giuseppe Cariello – We have to change the mind of the customer. Sometimes here the customer is really focused on the off-road truck range but we have found some overlap with our S-Way range. For example, today heavy trucks 6×4 in the off-road segment can be replaced with the S-Way due to the applications. The fuel tanker, for example, doesn’t allow any overloading because it’s a closed structure so we can now move to a more reliable fuel-efficient truck which is definitely the S-Way.
How has this year been on the whole for IVECO in this region?
Marco Torta – After the drop of 2020 due to Covid, we have gone back to the level of the business, which was really high in 2019. It was the same for Africa and the Middle East. We recovered what we lost due to the first half of the pandemic in 2020, so the outlook is absolutely positive, meaning that if you look at the quarterly results it’s encouraging. But in general, this year, a lot of programmes have started for development, for recovery of the economy even in the Middle East and Africa so the activity of our customers has already been already planned for the following 12 months. The demand for trucks is at a very high level and is still continuing to go this way.
What opportunities and corresponding challenges do you see for IVECO going forward?
Marco Torta – In Africa and Middle East, I see only opportunities in general. But, of course, there are challenges too and the real challenge in Africa and Middle East is the social stability. In Africa, there are many countries where, despite the pandemic, the social stability is the key driver because we really see some customers that, even though they have a good outlook for their country, to further invest and decide whether to go ahead or not, we are trying to understand the political scenario that will involve their country in the near future. We have seen in Tunisia that we have 17 authorized networks but sometimes we struggle. There are many countries like Libya, Ethiopia, Sudan where the main challenge is to be able to go ahead despite the political scenario. It’s not to develop the product because we see that the customers in these countries are really developing their approach and knowledge of the transport business. The way they measure the business is as good as the best everywhere else. This is something which was not at the same level 10 years ago. So, the progress of the operations in transport in these areas has been huge.
Realistically, when do you hope for the S-Way to debut in this region?
Marco Torta – The first S-Way Truck has already been sold. Commercially, it’s already available. The T-Way will start in February 2022. Already the dealers have started orders and are finding customers for the first units of S-Way.
Luca Vinceti – Also, the after-service network has already been prepared before the launch so this special tools and parts for the new vehicles. That is fundamental to make a successful launch. Technicians needs to be trained and ready so the whole system around the trucks must be ready and put into place.
What’s your vision for IVECO going forward in this region?
Fabio De Serafini – The next step, at the beginning of 2022, there will be a split of the big group at a corporate level which is a key milestone. We will have the agricultural and construction business separated in a different company to IVECO as a unique company for transport solutions. We will have a stand-alone company in order to achieve all the development and change that will occur in the next five to ten years. Electrification, as you know is one of the challenges we have and to have a unique company dedicated to transport; this is the future.
Can you give us an idea of what you market share is here in the UAE and Middle East?
Marco Torta – We don’t have the official data but in general we talk about a presence between 8% and 14% in the GCC and now we are planning to achieve the 20% in the three years.
And you don’t have a manufacturing or assembly facility in this region?
Marco Torta – At this stage, no, we don’t, even though in a lot of countries in the Middle East, for example in Saudi Arabia, there are reasons to have local assembly. So, we don’t build the truck from scratch as we do in Europe. The truck arrives disassembled and we assemble locally because in Saudi, for example, there is a different level of custom duty between local assembly and any units that arrive from Europe. In certain countries, in Africa for example, it’s only allowed to have local assembly. We have overall eight local assembly facilities in the area, but we don’t plan on having a single platform of production inside the region at this stage..
How would you categorise your partnership between IVECO and the national dealers?
Elvira Ferrara – Well, we have two types of dealers today – first are the historic ones. We talk mainly about UAE where we have a relationship with Saeed Mohammed Al Ghandi & Sons (SMAG) in Dubai and Al Saqer Heavy Equipment in Abu Dhabi for almost 35 years. We signed a contract with them immediately after IVECO was created because IVECO was created in 1975. Most of our other dealers, we have signed in the past five or six years. This is because of the evolution of our research to find a better dealer but all our dealers have trucks only. We don’t have a multi-franchise. We don’t have dealers that sell other products.
What are some common things that dealers in the region and elsewhere are looking for the most?
Fabio De Serafini – More and more there is a high request in terms of financial solutions. This means not only to finance the vehicle but to offer a complete solution so typically, like in Europe you pay 1000dhs a month and you get your vehicle with after sales and everything. We have some partnerships with banks too. It depends on the dealer. We have started to launch this in the light range. Of course, in heavy trucks where the value is much higher, we are working on solutions, but it will come soon, especially in the new ranges.
Today the design of these trucks, S-Way and T-Way have evolved to this point after many years. Where do we see the next evolution of these trucks, if at all?
Fabio De Serafini – What you do is you follow the market and the demand of the market and the needs of each country. So, we started with diesel, then we moved to CNG (compressed natural gas), now we are going to electric and hydrogen. So, this is the trend.
The key point for it to evolve and become even more competitive than what we have today is the capability to be all connected. So, in Europe it’s already done. There’s a standard way of working. The truck is fully connected between the customer, the dealer and the manufacturer. We have a control room based in Italy. It could be based anywhere, where a technician or someone can look at the fleet every day and is able to predict the behaviour of our trucks. And this is key, because in this way you can strongly reduce the cost of ownership of the truck through the fact that you’re able to prevent the event of the truck. And then you can even make a reparation on a vehicle where necessary too. In Europe, when we launched two years ago, we had a market share of 6%. Today, we have a market share of more than 8%. We are the only manufacturer that has gained market share during the pandemic and during the re-start of the market. But this is due to this concept. The more you integrate the customer activity with your capability to manage the truck, also involving the dealership at the same time, this makes the difference in front of the customer.
I think we are not at the end; we are at the beginning in this digitalization process. Of course, as Marco said, there will be electrification and then there will be the hydrogen as part of the official business plan of IVECO and so on. The reality of the customer and the biggest thing you can bring is the value in the pocket of the customer. Because at the end of the day this is what they looks at.
So, if I am sitting down as a customer what is the thing that will make me choose you over everyone else? What is that one point I can point to and say this is why I want IVECO?
Giuseppe Cariello – In our markets, as IVECO in this region we are used to fighting. I think we are very hungry to take any business and to take care of each customer in a way other manufacturers are not able to do. We are very focused on the customer and that’s our main goal to take care of the customer from the beginning of the relationship to the end.
Marco Torta – If I could add. I am here for 10 years. I have been working in Africa and Middle East for almost 30 years. I am proud to say, absolutely, reliability is number one because in the last 30 years I have heard very few customers who are not happy about our trucks. I can say our trucks are absolutely comparable to any other one on the market, if not better.
So, looking ahead to 2030 can you give us your take on sustainability and how IVECO is currently tackling this issue?
Fabio De Serafini – First of all, definitely there will be an evolution in line with sustainability. Some of the countries in Africa and Middle East are already moving to Euro 6 trucks, in Morocco, for example. We expect UAE even to do this eventually. This is part of the game, the emission level, but one thing to think to is the electric vehicle. That will be zero emissions in the future but right now, IVECO already has a reality in place, which is the natural gas application.
This is really a key experience because we started the distribution of this about six or seven years ago, in Europe, when the key issue at the beginning was the development of the network for the fuel stations. There were 50 fuel stations six years ago and today there are more than 450 because that was a programme that was developed in conjunction with single governments, in each country, in order to promote this level of transport management. So with the natural gas we are almost at zero emissions. The challenge was to build the network but governments subsidized a lot with the building of infrastructure needed. And we moved from a marginal presence of natural gas trucks in Europe – between 250k to 300k in a year – from below 1% and today it’s almost 20%. With natural gas you have very good cost of ownership too because fuel consumption is different and time costs are different. It will take time, but we see by 2030 all three – diesel, natural gas, electrification – will be present. We see an evolution in favour of natural gas but diesel will not disappear in a few years.
And finally, what about the social pressure to bring electrification through? The shift to a greener way of working is happening in every industry at the moment. Is there an opportunity for trucking to be at the forefront and really be champions of the move towards sustainability?
Fabio De Serafini – The pressure absolutely is there but for all the big manufacturers to develop and put into the market mass quantities of vehicles is not easy. It takes time.
Luca Vinceti – We must also remember that sustainability is not just about the engine, it goes down through IVECO through all levels. Starting next year, we are introducing bio-degradable packaging for all our engine parts.