Interview | Gerrit Marx, President, CNH Industrial Commercial and Specialty Vehicles

Interview & photo by: Gianenrico Griffini

By regrouping trucks, buses, coaches, off-road and quarry vehicles together with firefighting, protection and civil defence vehicles under one roof, we will be able to boost the drive on internal synergies and empower the brand.

Q. How would the new organisational structure at CNH Industrial work?
A. The new organisational structure is simpler and strengthens our five global segments – Agriculture, Construction, Commercial and Specialty Vehicles, Powertrain, and Financial Services. Each segment is fully responsible for the global growth and performance of its business, which gives us more focus and accountability. The new set-up brings the businesses closer to the customer and facilitates a faster decision-making process. By regrouping trucks, buses, coaches, off-road and quarry vehicles together with firefighting, protection and civil defence vehicles under one roof, we will be able to boost the drive on internal synergies and empower the brand. Supported by streamlined global functions, the five operating segments will help to focus on core company tasks such as strategies, emerging technologies, systems and processes, and supply chain. They have the task to support the segments to enable faster decision-making. They will also guarantee adequate synergies inside the organisation. With the new setup, we aim to become more customer-centric. We aim to enhance focus on our five operating segments. We aim to be more entrepreneurial and reduce complexity. Apart from empowering the five operating segments, we are aiming at a leaner and more agile operation that is simpler; has more streamlined decision making processes, and is more innovative and faster.

Q. What changes does this new organisation involve? How will it benefit IVECO customers?
A. The new organisation brings together the Group’s IVECO commercial vehicles business with the bus and coach, firefighting and defence vehicles brands to create the new Commercial and Specialty Vehicles Segment. It builds on the strong heritage of the brands that are coming together, and have deep European roots. The brands have made important contributions to the history of their respective sectors. They are illustrious brands like Magirus, which is an internationally recognised authority on firefighting and emergency vehicles. Providing us full accountability for global growth and performance, the new set-up gives us the freedom to change, anticipate and adapt. It gives us the freedom to change, anticipate and adapt to the fast-changing environment that we operate in. The leaner organisational structure that will result, will also give us the flexibility to innovate at the speed to be more effective, to be more focused, and get closer to our customers by providing the solutions they need. The structural changes will enable us to address key industry trends that matter to our customers and make a difference for their businesses. For us, the key to success is to present the customer with an offer that goes beyond a commodity. To present the customer a vehicle that is laced with a whole range of services. The customer-centric mindset will enable us to continuously improve the aftermarket support we offer to our customers. It will enable us to provide them with a complete solution that addresses their operational and business needs.

Q. Speaking about accelerating automation, vehicle electrification, digitalisation and servitisation among others, what change will IVECO as a brand witness under the new structure?
A. Automation, vehicle electrification, digitalisation and servitisation are not new to IVECO. A case in point is our Daily Electric, or our market-leading buses. A case in point are the TCO2 Live services that we introduced with the Stralis in 2016. The TCO2 Live services were an early example of servitisation. Even our participation in the EU Platooning Challenge. Enabling us to drive such megatrends, and to anticipate as well as meet our customers’ demands better, the new structure will enable us to focus on offering a whole range of services enabled by digitalisation to our customers. We are about to launch a new vehicle with new services that leverage digital technology to maximise the uptime, productivity and fuel efficiency. We will continue to develop and expand these new services. They will become an increasingly important part of the complete package that our vehicles will offer our customers. The new organisation will also allow us to continue to innovate in vehicle electrification. We have been doing it for some time, and will be able to accelerate the process. Out of the many award-winning innovations we have made in this field, one is the IVECO Bus CREALIS In-Motion-Charging, which won the ‘Move Green’ innovation award at the Paris Public Transport Show and the ‘Sustainable Bus of the Year’ title at the IAA Show. This bus is seen as an e-bus solution with the highest operational potential since it never needs to stop for charging. It has a small set of batteries, which enable it to operate free of the overhead lines and recharge in motion when the bus is reconnected to the lines. Electric traction technology in its current state of development is viable for urban mobility. It has an important role to play in low speed, low energy intensity stop-and-go missions, and in high-value missions such as people transport in city centres. It is important to remember that electricity is clean only if it comes from a clean generation process. A vehicle running on electricity generated from coal is only moving polluting emissions from the city to the site of the power plant. Another important consideration is about the battery and its material extraction, its cost, its weight, its end of life, recycling and ultimate overall environmental balance. Long-haul applications will follow in the longer term, and in the coming years we will see an evolution that will transform the industry.

Q. What role will gas vehicles and LNG technology play in IVECO’s future in the long-haul segment?
A. We have a clear investment roadmap for IVECO to consolidate and grow our position in each segment – light, medium and heavy commercial vehicles. We are leading the way in natural gas technology, and we will continue to invest in order to maintain this leadership in the LNG vehicle market. In the medium term, we see LNG as the only sustainable traction for long-haul transport that presents a viable alternative to diesel from the point of view of Total Cost of Ownership. We see it as the best technology in this segment both for the CO2 reduction it achieves and for the new European policies supporting the use of gas, such as the motorway toll exemption in Germany, or the decrees to promote the use of biomethane from cow manure and agricultural waste in France and Italy. The necessary infrastructure is also developing, creating increasingly favourable conditions for the use of natural gas. The gas distribution network today covers the main European freight routes with over 300 truck gas refuelling stations and by the end of 2019 it is expected to extend to more than 500. It is also worth considering the opportunities of biomethane, which can reduce well-to-wheel CO2 emissions by as much as 95 per cent. The transition from low emissions to zero emissions opens the door to a circular economy approach based on the generation of energy from organic or agricultural waste.

Q. The use of biomethane from liquid manure from animals could bring up to 182 per cent of CO2 saving towards conventional fuel according to the NGVA (Natural and BioGas Vehicle Association) and EBA (European Biogas Association). How would the highly ambitious CO2 reduction targets for trucks set by EU affect IVECO?
A. The targets set by the EU are indeed highly demanding. It is very likely that electrification will come. However, this doesn’t depend only on vehicle manufacturers, but requires the infrastructure to be in place. The charging infrastructure for electric vehicles is easier to develop in urban areas – a process that has started – while coverage of regional and longer distance routes will follow further in the future. At IVECO we will continue to work on developing electrified vehicles for urban missions, where our customers will be able to find the infrastructure they need. As for natural gas, the EU Parliament and Council recognise the key role of renewable gas in the transport sector, and have called upon the European Commission to develop a methodology which we urge must be applicable by 2025 to include the CO2 emissions reduction effect from bio-CNG and bio-LNG in the computation of average fleet emissions. At IVECO, we see natural gas as the mature solution available today to achieve sustainable heavy-duty transport, and we will continue to invest in this technology to enable our customers to operate their fleets profitably while meeting these ambitious targets.

Q. What are your expectations from the new products?
A. This year we have important launches. They are in all ranges, and are the end result of significant investments and big projects involving our engineering and manufacturing teams. You will see that they will bring with them some key innovations. We expect them to be very competitive on the market, setting the foundation for our future growth. We are about to launch the New Daily. This product family has a long history of 40 years of success. The latest arrival will be more competitive than ever. Very soon we will follow up with great news as well on our heavy line. IVECO is here to stay, compete and win across the segments where we compete today – from light to heavy trucks, buses and specialty vehicles.

Q. Do you think the New Stralis, or whatever is its name, will be able to boost IVECO’s sale volumes in EU markets?
A. Yes, absolutely. The market is coming out of a difficult time, and we are bringing in an extremely competitive product. We have invested heavily in the Stralis, and the new range will raise the bar in fuel economy, comfort and reliability. The new organisation will also play a role, and will help us to be more aggressive on the market. We are confident that these factors together will enable us to increase our volumes and improve our market share.

Q. Do you think IVECO has the ‘right’ size and ‘right’ footprint around world to stay independent?
A. IVECO is the fifth largest manufacturer of commercial vehicles in Europe. We are in the top ranks in the LCV segment, thanks to our best-seller, the Daily. Not only in Europe are we in the top ranks, but also in China. We are at the top of the medium range there. We are also the leader in natural gas-fuelled vehicles, with CNG and especially LNG for long-haulage transport. We enjoy a clear predominance in market share in these fields. We are already thinking about the future. We are thus considering hydrogen fuel cells. Our sister brand, FPT, unveiled a first prototype during the last IAA, in Hanover, mounted on our IVECO chassis. In the area of buses, our Intercity range is dominating the market. With Heuliez Bus, we have an electric range for urban buses. In the specialty business, last year we won a momentous tender with the U.S. Marine Corps. to provide the next generation of their Amphibious Combat Vehicles through Iveco Defence Vehicles. Having touched China with the Daily, we also see a market recovery in South America, mainly driven by conducive borrowing rates, old fleet renewals and increased freight for agriculture. As Commercial & Specialty Vehicles company, we run more than 20 manufacturing plants around the world, including joint-ventures, and nearly the same number of R&D centres. We have the right size, and the right footprint. Most of all, we have the technological advantage to remain competitive in the market on our own and face the industry’s upcoming challenges.
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CV is an associate member of the International Truck of the Year (IToY). As part of this association, the magazine provides exclusive articles, written especially by IToY jury members.

Trendline
It gives us the freedom to change, anticipate and adapt to the fast-changing environment that we operate in.

In the medium term, we see LNG as the only sustainable traction for long-haul transport that presents a viable alternative to diesel from the point of view of Total Cost of Ownership.

IVECO is here to stay, compete and win across the segments where we compete today – from light to heavy trucks, buses and specialty vehicles.

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