Iveco head expects smoother sales road

[kscarbel]

Financial Times / December 1, 2013

Iveco expects truck sales in Europe to flatten out in 2014 after two years of falling demand, as the need to replace ageing heavy-duty fleets offsets worries over new regulations.

Sales of commercial vehicles, from vans to heavy trucks, have fallen dramatically in Europe since the financial crisis, reflecting a slump in economic growth and industrial activity.

But a small decrease this year is set to flatten out in 2014, the president of Europe’s fourth-largest truckmaker by sales said, following suggestions from rivals that the worst might be over for the industry.

“I do not think that sales will go down in 2014. The heavy segment will increase,” said Lorenzo Sistino, referring to trucks able to carry more than 16 tons of freight. “The fleet needs to be refreshed. We think that sales will recover.”

Sales in Europe this year will be just over 1.6m trucks, or two-thirds of the continent’s pre-crisis total. High unemployment and sluggish economic activity, particularly in southern European countries, has severely reduced demand.

Volvo, Europe’s second-biggest truckmaker by sales, has said it expects sales of heavy-duty trucks to remain flat next year, while Daimler, the continent’s biggest brand, has said it is “optimistic for 2014”.

The European truck market inched up 1 percent in the third quarter of this year from a year earlier, reversing a downward trend seen since the end of 2011.

A new set of emission standards for trucks known as Euro 6 will come into force in the EU on December 31, with some truckmakers anxious that because of the advanced technology in the less-polluting trucks, the higher cost price may deter some buyers.

Iveco, the Italian brand owned by CNH Industrial, sells almost three times as many trucks in China through joint ventures as it does in Europe, and will focus on increasing its presence in that country, Africa and in Latin America to offset slower growth in Europe.

Iveco has no plans to enter the US, Mr. Sistino said, and was not interested in a return to the Indian truck market, which has seen billion dollar investments by rivals such as Daimler betting on its emerging potential, but has so far lagged behind expectations.

“We have a lot of business areas where we need to grow,” said Mr. Sistino. “There is huge potential for de-contented vehicles in Africa,” he said, referring to trucks with fewer features.