After 70 years Iveco’s truck assembly plant at Dandenong will cease manufacturing trucks In June next year, as another Australian vehicle manufacturing operation is set to shut down.
The shutdown of local Iveco truck production will leave only Volvo’s Brisbane operation and Paccar’s Bayswater factory in Melbourne’s East as the only remaining local vehicle assembly plants.
The cessation of local Iveco manufacturing has long been rumoured with many industry pundits wondering how the Italian owned operation could be viable given the volume for its locally built product, particularly since the demise of the Australian developed and built versions of its ACCO model.
However Iveco in its statement issued today says that as part of its ‘global transformation process’, it will develop what it is calling its Customisation and Innovation Centre (CIC) along with related changes that will ‘impact its Australian manufacturing arm’.
Iveco currently employs approximately 120 workers in its manufacturing operation along with a team of around local 25 engineers involved in local research and product development, the remainder of the 250-strong workforce are involved in sales, product support and marketing functions.
It is understood that there will be job losses at the Dandenong facility, but Iveco is not saying how many will go, although it did say some staff will transfer into the new Customisation operation.
The Dandenong manufacturing plant was opened in 1952 under the control of International Harvester manufacturing trucks and light utility vehicles for many years, when the IH brand was the market leader in trucks. Iveco purchased International’s Australian operation, including the Dandenong plant from the ailing American company in 1992.
Many parts of the historic facility are now heritage listed and it is understood Iveco will continue to operate from there with the CIC set to use part of the existing manufacturing plant.
The factory originally covered around 34000 square metres and has produced more than 230,000 vehicles since 1952, and while it pumped out 2000 new trucks in its first year of operation in recent times the plant has built well less than half that volume each year.
T&B News sought comment from the remaining local truck makers. A Volvo Group spokesman told us that while it does not comment on opponents, the company has been actively expanding its local component supplier chain in recent times and has invested heavily in its Wacol plant to expand production with a focus on Queensland based suppliers.
Paccar did not reply before deadline.
The company said it would move to fully import its heavy duty range from its Spanish advanced manufacturing facility in Madrid and it anticipates this will take place from the end of June 2022.
Iveco already fully imports its light, medium and selected heavy duty trucks as well as its Daily based minibus and its off-road models to Australia.
The company said the decision to fully import its heavy duty range will allow it ‘to more closely align model year introduction timings with that of its parent company in Europe’.
It cited as an example, the fact that it will now be launching the new S-WAY model in Australia according to the global launch plan.
Iveco said its new S-WAY model for Australian and New Zealand will have ‘undergone thousands of hours and kilometres of validation testing on local roads and highways and had input and development from Iveco’s local engineers and specifically selected customer partners, ensuring it is designed and then tested to meet the needs of the local ANZ market’.
The company also said this will include a further iteration of its imported dual control ACCO model for the local waste market.
In what is a huge announcement for the company Iveco Australia and New Zealand managing director, Michael May, said that by focusing on the Customisation and Innovation Centre, the company would ‘strengthen one of its key selling points in the Australian and NZ market’.
“Historically, our most unique value proposition has been our ability to customise and specialise vehicles for our market, leveraging the expertise of our local engineering team and the local facility,” he said.
“By further enhancing this service, we believe there is considerable potential to provide additional value to existing and prospective customers, while growing the CIC’s capacity and scope of work.”
Michael May said the decision to move to local customisation of fully imported vehicles was a natural progression of Iveco’s ANZ transformation.
“Given our brand’s long history of manufacturing in Australia, this next step towards customisation strengthens our ability to remain agile and responsive to demanding regional requirements,” he said.
“This move will also ensure that we are in a position to offer the market the very latest in IVECO performance, comfort and safety innovation, in the most timely fashion, and at the same time, capitalise on our design and validation engineering expertise and customisation capabilities.”
Iveco said that over the coming months it will continue to engage with its employees who may be impacted by today’s announcement, and will provide appropriate support to the involved workforce.
.The company said that the CIC will be a business unit that will ‘further leverage Iveco’s local engineering and manufacturing expertise, transforming the company’s focus towards the customisation and innovation of its vehicles for local markets’.
It said that promoting innovation will be a key aspect of the CIC, allowing it to work more closely with Europe and local partners to ‘explore areas such as alternative propulsion solutions, digitisation, connectivity and autonomous driving’.
It added that the CIC is being developed to better assist its customers and body-builders – particularly those with complex body types – to achieve a more streamlined design and body fitment process for their vehicles.