In the vehicle registration market, which went through a challenging period in 2023, Iveco could boast of impressive growth in its truck segment.
Daniel Wolszczak, the general director of Iveco Poland, sums up the past year in an interview with trans.iNFO and reveals plans for the current one, focusing primarily on gas vehicles as an interesting alternative to electric cars.
Judging by the HGV registration figures, Iveco Poland can consider the past year as a success. In a market slightly smaller than in 2022, they boasted a clear growth of over 45%. Nevertheless, I presume it was a difficult year for the industry?
Daniel Wolszczak, general director of Iveco Poland: Absolutely, and for many reasons. Firstly, due to the economic situation in Europe, i.e., a decrease in demand for transport services and, consequently, for vehicles. Secondly, the introduction of new generation tachographs did not help either.
In Poland, unlike many countries in Europe, there was no transition period, so just before the specified date in the regulations, we had a significant increase in the registration of new vehicles. Everyone wanted to make it before the new obligation was introduced. In the second half of the year, the effect was the opposite – a decline in the number of new registrations.
In 2023, we increased our sales of heavy vehicles by over 45% and registered 1,345 vehicles with a gross vehicle weight of over 16 tons. We are very pleased with this, because it means that more and more customers are choosing our brand. We had challenges last year, for example, due to the fact that some customers canceled their orders in the second half of 2023.
At the time of the post-pandemic rebound in 2022, vehicles were ordered many months in advance, and the changing market situation – falling freight prices and reducing freight volume – made customers more cautious when purchasing. We had to adapt to the situation and flexibly manage the order portfolio.
Also, looking at the registrations for the entire range of delivery vehicles and trucks, i.e., >= 3.49 t, we assess this year as very good. Iveco took 3rd place with 9,110 vehicles and a market share of 12.8%. In the light range of 3.49 – 7.2 t, every fifth vehicle registered in 2023 was Iveco.
In the 7.21 – 16 t segment, the market increased by 21.1%, and during this time we increased registrations by 45.6%. The entire sales team, led by our authorised partners, did a very good job, as evidenced by the results.
If we look at the registrations of HGVs in Europe in 2023, Poland recorded a 1.2% decrease. Meanwhile, the largest European markets, such as Germany, France, Italy, and Spain, could boast of significant, even double-digit growth. In the case of Germany, it was a jump of over 20%. Why do we see this disproportion between Poland and other markets?
In my opinion, this is primarily due to the different profile of the Polish transport sector. About 85% of trucks sold in Poland go to companies that operate in international transport. And as the demand for this type of services in Europe has fallen, this has affected our haulage businesses even more.
In Western European countries, such as Germany or France, there is also a different transport profile. The share of operations in domestic transport is greater, and it has not been affected by the decline in demand to such an extent as international transport.
You mentioned at the press conference that you expect a 15-20% correction in registrations on the market this year. This sounds quite ominous. How will Iveco find its place in this shrinking market?
We want to maintain a similar level of sales as in 2023. This should result in a higher market share. We are counting on our new 2024 model range, which received very good ratings after its premiere in Barcelona and the first customer shows in Madrid, which allows us to look optimistically into the future.
Recent years, especially the pandemic period, have been characterised by shortages of components (especially integrated circuits), disruptions in supply chains, production delays, and long waits for deliveries of ordered vehicles – up to several quarters. What does it look like now?
Today’s shortening of delivery times is primarily related to lower market demand. Components have always played an important role in the supply chain because delays in their deliveries automatically translate into an extension of the order fulfillment time for the vehicles themselves. Today, fortunately, we can say that the situation is stabilised.
There may be isolated cases of component shortages, but they no longer affect us globally and do not affect vehicle availability to the same extent as before. Delivery times have shortened due to lower demand and the normalisation of the transport market. We are back to the situation where we have to wait 4-5 months for the ordered vehicle.
So this year there will no longer be a situation that was visible in 2022 or at the beginning of 2023, when registrations did not reflect current demand and were the result of delayed deliveries? Will this year’s result be influenced by demand resulting from the macroeconomic situation?
The macroeconomic situation is one of the elements influencing demand. I believe that in 2022 and consequently in 2023, the market was “overheated” in terms of the real needs of our customers. There was a psychological factor at work. If I am a business owner and I have been waiting 3-4 months for a vehicle, and now I have to wait at least a year, what do I do?
I am placing an order for stock. However, during this year, there may be various macroeconomic changes that will affect my business. The cars are already manufactured, and assessing the current situation, I come to the conclusion that my needs are currently smaller than the orders placed. This is one of the reasons why we expect lower demand and fewer registrations this year.
And when do you expect the economic situation in Europe to rebound, and consequently the demand for means of transport?
Currently, the demand for trucks is declining. We estimate that registrations on the Polish market in 2024 will be at the level of 15% lower than last year. Moreover, forecasts for the whole of Europe predict a decline of 10-12%. So I expect that only in 2025 will this trend be reversed.
What is the situation on the gas car market? You are the market leader in this segment – you own 83% of the Polish LNG truck market. The year 2022, after the outbreak of the war in Ukraine, was difficult for this segment. 2023 brought some improvement. What are the prospects for 2024?
I think the prospects look better than a year ago. First of all, we have had price stabilisation for gas for a long time and the ratio of its price to diesel, resulting in lower monthly TCO (total cost of ownership – valuation of the total costs of ownership and use – editor’s note) gas-powered vehicles. Forecasts for the next quarters are also positive.
Moreover, we are receiving more and more signals that we can expect legislative changes in Europe that will promote gas vehicles. We are talking about biomethane. Vehicles powered by bioLNG or bioCNG would be treated as low-emission vehicles. For this reason, we also talk about support tools for this type of vehicles. Talks about the development of the biomethane sector are also ongoing in Poland. So we see a lot of potential in this if these changes take place.
Of course, ultimately the decisions are made by customers. It will take some time before they gain confidence in this solution again, primarily due to external factors – gas prices and possible subsidies, granted at the start or related to partial or total exemption from mandatory fees.
It is increasingly said, and this is also my opinion, that it is a mistake to consider vehicles as zero-emission only on the basis of the “tank-to-wheel” methodology [literally “from the tank to the wheel” – a concept defining direct emissions related to fuel consumption in the vehicle, from the moment of refueling to emissions – editor’s note].
To reliably assess emissions, the “well-to-wheel” methodology should be used, which determines the level of emissions throughout the entire process, including obtaining energy to power the vehicle. Of course, we hope that this will change soon, and then biogas vehicles, such as those produced by Iveco, will perfectly meet the low-emission assumptions because according to research, the emission of an Iveco truck when fueled with biomethane produced from substrates from animal production is negative and amounts to -121%.
So we won’t stop promoting gas vehicles. We believe that they are a great bridge solution leading to zero-emission transport, worth recommending due to the range and possibility of using such trucks in long-distance transport. Today, the challenge for a battery-electric vehicle is the range, as well as the charging infrastructure.
Nowadays, electric vehicles are available to a very limited extent, and their high price is still a barrier. We are waiting for the government-announced subsidies for the purchase of N2 and N3 class electric vehicles. Thanks to them, there will certainly be a revival in this sector, but the quantities will still be limited by the availability of subsidies.
Finally, changing the vehicle segment we are talking about slightly – I would like to know what your forecasts are for 2024 when it comes to the registration of commercial vehicles?
It all depends on our production capabilities. We would register more vehicles already in 2023 if we had greater availability. This year we are aiming for a result of 8,500 delivery vehicles and a similar number of trucks as last year.
We have a very committed, professional authorised dealer network, and together with our partners, we will continue to provide our customers with innovative, modern technology-based comprehensive transport solutions. We will consistently pursue our goals.