The manufacturer is focusing on building up small business sales with the likes of bakers, butchers and plumbers to consolidate last year’s growth, James Dallas reports
Iveco’s sales figures for 2015 in the 3.5t bracket where its Daily van operates make impressive reading.
In an overall large van market that grew by 18% to 93,490, according to the SMMT, sales of the Daily rocketed by 56% from 2769 in 2014, when the current model launched, to 4326 units last year, pushing its share of the 3.5t segment up from 3.5% to 4.6% in the process.
Large supply deals to the supermarket giants Asda and Tesco helped to drive this growth and late last year the manufacturer delivered 100 models to the access platform (cherry picker) firm The Facelift Group.
The brand’s focus going forward is to make sure small business sales keep track with fleet orders.
“There has been a huge increase in the use of vans in the retail sector,” a spokesman says.
But the explosion in the 3.5t market due to the expansion in home deliveries resulting from e-commerce is a double edged sword for Iveco because it has come with a corresponding decline in the 7.5t sector, in which it also operates but where drivers require an ‘O’licence.
The spokesman adds that legislation has had little affect on van demand but has shifted the focus of truck operators towards the 3.5t market.
“Vans have never been more important in road transport,” says the spokesman, “they are covering more miles than ever.”
A new business model
In October last year Iveco moved to separate its light and heavy commercial vehicle sales and marketing operations into two distinct divisions.
Ian Lumsden is the director of the Light Business Line so it is his task to market the Daily towards local businesses.
Iveco’s strength has traditionally been with big fleets and Lumsden admits: “We’ve struggled as a retail brand.”
He says small traders like the fabled butchers and bakers prefer to deal locally so the target must be to increase the brand’s retail footprint.
Lumsden acknowledges Iveco can not hope to equal the high street presence of rivals that sell cars as well as vans but claims the brand is making gains through targeting potential customers online and encouraging its dealers to do the same.
The aim for 2016 is, says Lumsden: “To search out new customers and to create the right packages for van customers.”
In addition to the digital strategy Lumsden says Iveco will add five more sales points to its Daily network in 2016, raising the total to 65 outlets, by encouraging a group of authorised repairers to expand their businesses by selling the vans too.
“A van buyer will not travel more than 20 minutes to buy a van,” says Lumsden.
Iveco is to unveil its Euro 6-compliant Daily at the CV Show in April before it goes on sale in the third quarter of the year.
Unlike most manufacturers, it has not confirmed whether the model will require topping up with Ad Blue to meet the emissions requirement, raising the possibility that it has found a solution that does not require the urea-based product to cut emissions.
While Lumsden claims Iveco would be at an advantage because its dealers are already familiar with Ad Blue through using it in trucks, he claims there is potential for widespread misuse by customers.
“Rental companies don’t want Joe Bloggs messing about with AD Blue,” he warns.
Stuart Webster, who took over as Iveco’s UK boss last year, following the brief tenure of Bob Lowden, insists diesel remains the right choice for both local and long-distance deliveries despite admitting that the VW “dieselgate” scandal had “rocked confidence in diesel as a fuel”.
Webster is cautiously optimistic about the prospects for 2016. “Growth is going in the right direction,” he says but cautions that “the feelgood factor is yet to return” to many consumers due to a slow down in wage growth.
He says oil prices look set to remain low, meaning large operators pay less than £1 a litre for diesel, which “has to be good news for the consumer”.
But Webster adds: “A potential cloud on the horizon is the UK’s relationship with Europe.”
He claims the business community wants the UK to remain in the European Union but says the issue must be resolved as soon as possible to stop companies from delaying operational decisions.
Focusing on Iveco’s van business, Webster says that by establishing a stronger retail presence at local level “We will continue our push to become more prominent as a retail brand”.
“It’s going to be a solid year for the economy, the sale of vans and for Iveco,’ he predicts.