Keep calm and sell trucks...
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Successive MDs have been brought in to drive performance at Iveco, Luca Sra is the latest to try his hand. CM gets a progress update
IT WAS A WET, miserable day in Watford when we called at Iveco’s headquarters for our allotted hour with Luca Sra, the UK MD of the Italian truck builder. Against the background of an economy reluctant to come out of recession and a stop-start truck market, it would have come as no surprise to find a deeply worried and stressed individual wondering why he had swapped the sunshine of Turkey, his previous market, for the clouds of Britain.
If Sra is having second thoughts, he’s not showing it. This likeable Italian has a focus and passion for the business that would indicate he’s thriving in this pressure cooker environment and, if our straw poll of operators is anything to go by, the needle of perception for the Iveco brand seems to be nudging in the right direction. “I enjoy working under pressure,” he says. “This is how I work and how I like to function in the company.
“I’m quite an optimistic person and I’m positive. Unfortunately, I’m not a magician, nor do I have the ability to see into the future. We are looking to end the year having made some progress. There is a positive feeling across the company and that’s a good first step. The second point is delivering something more, every single month, with respect to the same month of the previous year. It’s just a starting point, but we are starting to see things happen.
Decision making
“I wouldn’t say the business is easy, it’s very tough for us all,” Sra continues. “There is some delay in decision making from hauliers. This is quite normal. There has been a big shock in the markets from 2007 to 2010 and you can understand why people are cautious.
“But if you are an entrepreneur, as most people in business are, you have to trust your future and in order to put your company in the right place to expand, you have to invest. That means new products, services and people.” You don’t have to have a great insight into the UK truck market to know Iveco has been a consummate underperformer for many years. Twenty years ago it was at the top of the league, its market performance founded on the alliance with Ford and an undoubted excellence in the medium-duty section thanks to Cargo. The growth in the tractor unit sector in the UK in recent years has not played to the strengths of Iveco, while successive product overhauls have had a limited effect on sales.
Sustainable recovery
While the product is important of course, Sra’s approach is to focus on the organisational items that will change performance. “Our objective is to recover in a sustainable way,” he says, indicating that he’s not about to mortgage the company for short-term sales glory. “I believe we now have the widest and most effective product portfolio in the market. I am comfortable with our products and we have in place a process and strategy, which will continue to make improvements to our performance.” The strategy for Iveco under Sra would appear to be simple and is based around three pillars of excellence: people; standards; and customers. “Our strategy is very easy,” he say. “We are talking about people, across the company and the network, and their knowledge and competencies.
“Next we focus on our standards. Over the past few years we have invested in the infrastructure to have the right standards in place, now we should be raising the standard level across the UK market. These standards include MoT pass rates; vehicle off-road performance; speed of response for our assistance non-stop recovery service and others.
“Across these areas we are in a strong position and are in the condition to deliver bright results across the UK. We have recently put in place a proper infrastructure, a viable dealer network that is solid financially. We now seek to enhance the standards, concentrate on our people and get closer to the customers.”
Back to basics
The customer is the third pillar of Sra’s back-to-basics approach for the company and we know he has been spending plenty of time out in the market since taking up his position. “We’re not going to make the progress I expect if I’m sat in Iveco House in Watford. I have to be in constant touch with dealers and customers – letting them know who I am and what the company is. There is no magic wand, it’s about putting us and the customer together on a more consistent basis.” Iveco has undoubtedly made improvements to its dealer network and the standards and consistency across the country are improving, which is sure to have an effect on performance. “The improvements we have made need to be replicated on our heavy truck sales performance,” says Sra. “We have to build a sustainable and competitive business proposition for the customer. We respect everybody, but I believe we can offer a competitive solution in terms of total cost of ownership with our product range. That’s a package built around net price, residual value, repair and maintenance prices and fuel consumption, of course, where we have a very competitive offer. If I touch the fuel consumption of the vehicle, I touch 30% of the operating costs of every single operator.
“I recognise that on heavy trucks in particular, it’s a matter of perception,” he continues. “I can tell you we can offer a competitive fuel consumption solution, I can tell you we have a competitive total cost of ownership. But what matters is how we make a difference to an operator’s business and we do this by facts and delivering trucks to the customer. We have to put customers in our trucks, proving what we can deliver, then we have to cover the complete customer base.” By his own admission, Sra doesn’t have a magic wand to make an instant change to Iveco’s fortunes. But he does have a clear focus and determination to get things moving. An absence of magic means progress will be based on a process of continuous improvement giving sustained and continuous growth.
Effective approach
On the evidence of a couple of meetings with Sra – talks with colleagues and the market – we’re inclined to believe the approach is sound and will be effective. After all, turning Stobart’s head to Iveco is no mean feat. Given Iveco’s habit of changing MDs regularly, we just hope he’s given time to see the project through to fruition. ■
It’s a tough job
Luca Sra is a dedicated businessman who recognises the contributions individuals make to the performance of the enterprise. “You have to nurture your people if you expect to get results,” he says. “It’s a tough job, but I love it. I like working with people and trying different stuff. This is the only way to survive working a minimum 14 hours a day.” Outside of work he enjoys spending time with family and friends. His hobbies are skiing, mountain biking and Second World War history. His favourite food is pasta.
And what does he like best about the industry? “The competitiveness, you have to reinvent yourself every day of your working life.”