Iveco this week re-launched its Driveaway bodybuilder programme offering off-the-peg conversions of its popular Daily range.
The move came as many businesses struggle to adapt and grow their fleets to meet business demands amidst the turbulence caused by COVID-19.
Driveaway, says Iveco, will help by cutting vehicle lead times and making a diverse range of vehicles available quickly.
This week, TNB caught up with Mike Cutts, Iveco’s UK Light Business-Line Director, to discover what trends and factors lie behind the scheme’s reintroduction and whether the company is noticing a shift in buying habits.
TNB: First of all, can you tell us a little about the Iveco Daily?
MC: Sure. The Daily has been around 40-plus years and is a vehicle that is produced and shipped globally. We’ve had a number of iterations of Daily over the years and it’s a vehicle that’s probably best known for its versatility in terms of the range of vehicles produced.
That range stretches from 3.5 tonnes all the way up to 7.2 tonnes so effectively we enter into the lower end of the medium truck segment, but on an LCV platform. That gives us a great USP in the market. What we’ve seen is that a lot of 7.5 tonne medium truck customers are looking to downsize into a 7.2 tonne Daily because it’s got all the advantages of being cheaper to buy, cheaper to run with a class-leading payload.
TNB: And how has the new Daily been performing for you?
MC: Really well. We were recognised with the What Van? safety award for 2020 which was great for us because one of the big changes we made when we introduced MY19 Daily ( the most versatile commercial vehicle with the widest line-up in the industry) was the amount of technology, driver assistance and safety-related systems we put into the vehicle.
TNB: So, you’re relaunching your Driveaway scheme but what was the scheme like before relaunch?
MC: The scheme hadn’t been in place since 2018, so it’s been a while since we managed a central programme.
The programme ended centrally, and the dealers kept the overarching Driveaway brand going but effectively just managed it locally themselves. They’d order the chassis product from the factory, co-ordinate with whoever their local bodybuilder was and offer customers products that would vary greatly from dealer to dealer.
We wanted to reintroduce the programme centrally, which allowed us to offer nationally a consistent level of quality of product and warranty, a wider range of vehicles, but also underpinned by some different financing options.
This gave us an opportunity to have a fresh look at what we thought the market would want and need, especially in the current COVID situation, and tailor that offer in a way that works for a wide audience.
TNB: And how does the new scheme differ from last time around?
MC: Firstly, we’ve a wider range of vehicles. Just to walk you through the range, we’ve got 3.5 tonne products available as a tipper, dropside and Luton with and without a tail-lift. And then, on the 7.2 tonne product we’ve got curtainside and box vans, again with tuckaway and tail-lift options.
All vehicles now come with a three-year unlimited mileage warranty.
In the past, dealers had the ability to put the three-year unlimited mileage warranty on a panel van or a chassis but then, if the customer went away and sourced a body or the dealer added a body locally, they wouldn’t be able to match that.
Now we’re able to give the full package of peace of mind on the full vehicle, including the body.
TNB: The relaunch seems particularly well timed?
MC: With the shortage of supply of vehicles post the COVID peak, we’re finding that operators are now restarting their businesses and need product fast. And the factory order lead times and the backlog at the bodybuilders means that being able to offer ready-to-go stock for our dealers to sell off the shelf is definitely an attraction.
We only launched the programme last week, and we’ve already started to sell vehicles from it, so timing-wise it’s worked out quite well.
TNB: And the current situation around COVID etc has also led you to take another look at how you finance the vehicles, is that right?
MC: We’ve introduced a contract hire offer across the full range of vehicles with no deposit because we know that cash flow is a real challenge for a lot of businesses at the moment.
A lot of the other contract hire packages in the market sound really attractive but then, when you look at the small print, you see that it’s six payments up front and the customer’s got to put £3,000 plus deposit down.
We recognised that that’s not going to be palatable for the vast majority of businesses in the current climate so we’ve structured our headline rates around just one advance payment with no deposit.
That means that from just £505, the customer can get straight into the vehicle from day one and then manage the contract hire across a three, four or five-year cycle, fully maintained and with parts and tyres included and a full manufacturer warranty.
TNB: How did you go about developing the conversions in the range? What was the process?
MC: First, we looked at the overall registration figures produced by SMMT to see which conversion products are the biggest volume sellers.
It would be all well and good for us to create a weird and wonderful range of conversions but ultimately, we need to manage a programme that we can sell in volume.
Just by reviewing that data it was clear that tippers, dropsides and Lutons are by far the biggest volume products in the 3.5 tonne sector and box and curtain on the seven tonne.
We then overlaid the fact that home delivery and other delivery activity as the outcome of COVID means that Luton, box and curtainside vehicles are all very much in demand at the moment.
After that we consulted with our own internal dealer council to discuss the exact models that they felt would be most saleable within their world because ultimately the dealers are the ones that are selling to the end customers.
They gave us some guidance over what had sold well previously on their own local schemes, and they made recommendations on things like wheelbase, and what payloads we should be achieving and the options and specifications on the vehicle.
All of this gives us the confidence that we’ve got the right products in the market that customers are going to want to buy.
TNB: You said earlier that you’re already seeing sales but what’s the response from dealers been like?
MC: It’s clear that stock on the ground is sparse right now and, due to the impact of COVID, dealers have been selling out of their existing stock. They’ve placed a wave of new orders to protect themselves against Brexit, but those vehicles aren’t due until later this year.
So, we found that some of our dealers have wanted to take advantage of pulling on our central stock and making those vehicles directly available to their customers.
As I said, we only launched the programme last week and within 24 hours we’d already sold six vehicles.
Again, it demonstrates that if you’ve got the right product, at the right price on the ground, in the current climate, it works.
The scheme’s been really welcomed and well-received by dealers and they’re promoting and marketing it heavily and I fully expect that the stock we’ve got coming through between now and the end of the year will move quite quickly.
TNB: Finally, you talked about the impact of COVID and mentioned the dreaded ‘B’ word – Brexit. What’s your outlook?
MC: Sometimes it feels like you have to reach for the crystal ball to work out what’s going to happen at the moment but we’re just continuing to monitor the SMMT figures on registrations and work from there.
It’s really difficult to call where I think the market is going to finish this year. Our view is that we’ll see some recovery and catch up and we’re forecasting an expected 20% drop against our original plan for the year.
Whether we’re right or wrong, we’ll have to wait to see but we’ve been working really closely with our dealer network to order sufficient stock, even for those customer orders where decisions have been delayed because someone in purchasing has been on furlough, or because they weren’t in a position to make that commitment but are now back at work and realising they’re behind on orders.
So, there’s been a lot of closing deals over the month or so.
With regards Brexit, we had a massive order entry in orders from our dealers in August and about 80% of those are sold customer orders. This is a sign that our dealers are trying to proactively protect their customers the best they can by getting them ordered and through before any tariffs, whilst also carrying a manageable level of stocking to start in Q1 2021.