Michael May moved to IVECO at the beginning of 2020, following a 20 year career with Daimler Truck & Bus in Australia where he combined his engineering background with his sales management skills across a number of roles including aftersales and as a dealer principal at two of Daimler’s retail dealerships.
Undaunted by the revolving door of managing directors at IVECO in recent years, May presents a clear direction of where he thinks the organisation should head in the post-COVID Australian commercial vehicle landscape.
PM: As a local manufacturer, how have you dealt with COVID?
MM: We didn’t actually close down at all and we decided to keep going, although we reduced our production days. Some of the components for our ACCO and X-Way models come from Spain and I was able to see we were going to be running into trouble for supplies. When you stop the production line it’s quite hard to kick it back up, so we made a call to slow the machine down a little bit and run it three days per week.
We’ve got stringent spacing and safety requirements for our staff and the company has done a good job in making sure we hold on to the people. I’m finding IVECO is a bit like a family and there’s a real closeness to employees and making sure people are safe and retained.
PM: For the past three years IVECO has held a quite stable Australian market share. Has COVID affected this?
MM: We’ve dipped a little bit these past couple of months predominately around the light duty space. In the motorhome sector we are strong with the Daily product and it has taken a hit, but now that appears to be actually more of a delay.
We’ve had the biggest order intake in the last few months from the motorhome builders that we’ve ever had, mainly because of the billions of dollars that Australian’s now can’t spend in overseas travel. We’ll go into the launch of the new Daily model in the first quarter of 2021. The demand for the vans and even cab-chassis is getting stronger as well in that smaller parcel delivery space.
PM: The loss of the Navistar-produced International ProStar leaves you locally without a Heavy Duty conventional. Is that an issue?
MM: The International brand has a very strong heritage, particularly in relation to our Dandenong facility, so Navistar’s decision to withdraw globally from right hand drive production was a hard one for us to cop. But in reality we also understand.
I’ve had experience with other American manufacturers and appreciate the investment needed to produce right hand drive models in relatively small volumes. ProStar was a good product which I felt was starting to get some traction in our network and with customers. Navistar do what they need to do and it’s tough times for many of those companies in America. They need to be cognisant of their position and their future.
PM: How will IVECO meet its customers’ needs over the next few years?
MM: We have a broad range of products and I truly think we can do more with less. That’s not necessarily saying we’re going to draw lines through any particular product which we currently offer. Navistar is a different topic that we couldn’t control, but that’s not a precursor to what’s happening in our business at all. We have some amazing products such as the Eurocargo which stacks up well against the Japanese and is competitively priced. But for the couple of hundred units we sold we had 28 different permutations to end up with what is in basic form simply a 4×2 or 6×2 truck.
Our aim as a smaller player in the manufacture of trucks is to be a disrupter and we are working closely with customers and our network to define the product market fit a bit better and see if I can bring 28 models down to even six or eight. That may mean we have got to up-spec and make the call to go with Euro VI emissions and the full safety package as standard equipment. It’s about comfort and performance and safety. I’d like to be able to quickly explain to a potential customer we’ve got a great 4×2 or 6×2, and they can change the transmission but in power and safety and emissions we’re not making any compromise.
PM: Does the rationalisation of options have an impact on support?
MM: We have a dealer network which can be multi-franchised and in a massive country like Australia you’ve got to hold the right parts. Now if you’ve got 28 Eurocargo versions covering just 300 trucks, chances are you won’t have the right bit. With some rationalisation we can offer even better technical support and we can be sure to hold the right parts on the shelf.
PM: Overseas, IVECO is at the forefront of developments involving alternative fuels for agriculture and transport. Will Australia see any of this?
MM: The first step is natural power involving CNG and LNG, and then the next chapter is hydrogen. We’ve got to understand where we can leverage it. We’re very strong in the waste industry with our ACCO product and maybe there is space there, and/or in bus and the light duty segment. There is a fair bit of investment potential that we could leverage locally as an innovator and manufacture, so we are looking at that with some different partners.
PM: Can we expect the latest European models such as the S-Way to be available in Australia?
MM: One of the things I think we can improve is to get in step with Europe and be closer with the products that are coming out so we can get access to the latest models and technology and not be too differentiated.
In my experience if you create big gaps from the main European specifications you find yourselves two or three steps behind and always trying to catch up. The S-Way is a big step up on the Stralis and has already had good success in Europe. Here the X-Way is already offering a lot of that latest safety equipment which takes a lot of load off our drivers. I think these are super safe features that we have got to have. The cab comfort and the connectivity are the main upgrades so we can still push a lot of the safety down into the current X-Way range, but we will step up in architecture when we get to S-Way.
PM: A year ago IVECO announced a global rationalisation of production facilities. Is there a confidence about the Australian plant’s future?
MM: I’m really impressed with the calibre of people within IVECO and the smarts we have locally as Australians and New Zealanders and the breadth of what we offer and I think we really offer value.
Do I see it evolving somewhat? I actually do. I think there is opportunity for us to be a little more flexible and possibly a little more customised. We might find ourselves evolving into something that gives an opportunity for innovation to be leveraged. I’m positive about that innovative aspect of our company and what Australia can contribute. We want to evolve to be even more innovative and more flexible for customers and body builders and there is opportunity here for sustained growth. Leveraging the strong engineering and manufacturing skillsets we have here for the world is exciting.