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Iveco tackles the Far East
Page 20
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Could a sponsorship deal with New Zealand All Blacks rugby team help Iveco become a world-beating marque? Louise Cole reports.
Anyone hoping for clarity or depth from Iveco's global strategy announcement in Monte Carlo last week would have been disappointed.
The manufacturer followed its UK 'state of the nation' address, which showed disheartening figures at the top end of the weight range, with a heavyweight marketing campaign but little business detail. The heart of the event was a sponsorship deal with New Zealand All Blacks rugby team,pitching Iveco by association as a heavyweight contender.
But Iveco's core competencies lie in the sub-18-tonne arenas, with the Eurocargoperforming strongly in the UK and the Daily providing 67% of its global sales. Although the company has claimed its falling market share is down to a determination not to pursue lowmargin fleet deals, this is either misleading or simply folly. None of the manufacturers have the luxury of ignoring volume sales because they won't compromise a margin.
However, Fiat CEO and Iveco chairman Sergio Marchionne has had considerable success with Iveco financially, taking it from a loss to an operating profit of 6% within three years. Iveco's problem is at the top end; the Stralis is a good product but its dealers at least in the UK seem unable to compete with the go-get attitudes elsewhere in the market.
IvecoCEOPaoloMonferinosaid the company's problems sprang from a lack of brand awareness, but while strong marketing is always useful,this may be too superficial a reading of the company's obstacles to success.
Half of Iveco's sales come from Western Europe a fairly fixed market with half of those from its native Italy. Globally. the company wants to expand into the rapidlygrowing economies of Asia.
The company already has three industrial relationships within China, but Monferino would not he drawn on anyfurther developments such as with Indian company Tata. He says the company is exploiting its Fiat heritage in Turkey, India and particularly Latin America. Equally, the US market is difficult but Iveco is -watching carefully".
Marchionne's presence was probably intended to quell rumours about Iveco's long-term future within the Fiat group. Sale suggestions were met with a flat denial it remains to be seen whether this indicates anything other than Marchionne's ability to control a room. But he did say that the MAN and Scania match was fraught with difficulty, whereas Iveco would have offered "the most obvious DNA to get it done".
Iveco's turnover is €9bn (£6m) but Marchionne spoke of plans to raise this to €10bn (£6.6m) by 2010 with a double-digit profit margin. "I'm hearing a commitment to build a global manufacturer with a global reach.The best part of Iveco is yet to come." m