FLEET SALES: Daimler boss urges more investment allowance, flags new charges to encourage fleet turnover
By Gary Worrall | September 22, 2009
Truck manufacturers aren’t complacent about improving sales figures, urging the Federal Government to extend tax offsets to encourage fleet investment.
Daimler Trucks boss Ken Matthews says while truck sales are beginning to show signs of long-term recovery, further stimulus is required to fuel the market.
Matthews believes the equipment investment allowance scheme has been a success, and in an interview with ATN flags the possibility of a pay-for-trade scrappage scheme to encourage fleet turnover and reduce industry emissions.
Scrappage schemes, where consumers receive a guaranteed minimum payment for trading an older model vehicle for a new one, have been successful overseas in the passenger car market.
“It is probably very early days for that here,” Matthews tells ATN, “but perhaps some state governments are thinking about it for the future.”
The parent boss of truck brands including Fuso and Mercedes-Benz believes a city congestion charge similar to London’s scheme could also be introduced in Australia – “but not yet – while seeing merit in a user charge scheme at the Port of Long Beach in California which pools fees and pays truck operators to upgrade. Older trucks are progressively banned from the port.
“I am interested in the Long Beach scheme,” Matthews says, “but I think this problem will start to self-correct as Euro 5 becomes mandatory.
“For example, Daimler Trucks is trading in plenty of trucks that are only 3-5 years old and they are re-entering the market as used trucks.”
The investment allowance remains the most effective form of stimulus, Matthews says, flagging the possibility of offering better depreciation rates for operators.
“No doubt the investment allowance has allowed a lot of good operators, right through to small trucks, to update their equipment,” he says.
“I think this is a better way to go than a cash payment, it gives operators an incentive to update.”
He says the investment allowance is also broad-based, so it can be used for other heavy capital equipment, not just trucks.
“If there are going to be emission regulations on engines, then it should be on all engines, within reason. But I believe there will be a flow-on to improve those engines as well.”
Matthews also praised truck manufacturers for the major advances in improving the environmental performances of road transport in the last 20 years.
“The on-highway engine manufacturers have done a great job, comparing back to just a few years ago,” he says.
“I am looking forward to Euro 6; it will have been an amazing leap in just 20 years.”
Matthews says these technological leaps reinforce his view that the industry will self-correct, with older trucks replaced by post-2000 models with greatly improved performance, economy and exhaust emissions.
He is also happy with how truck manufacturers are able to work together as part of the Truck Industry Council to co-operate on industry-wide issues.
“If you go 10 or 20 years forward from now, the way the country is developing, the commercial vehicle sector will be a major industry, even more so than now,” he says.
With an emissions trading scheme to be implemented, Matthews agrees some of the funds could be used in an investment allowance scheme.
“Mechanisms of investment or depreciation are the best tools a government has to put into the marketplace, and that includes the decision to stretch the delivery time, so long as the order was properly placed and documented,” he says.
“I am always in favour of that way forward, it is very precise, and you get an advantage as a good operator and that includes getting the good equipment.”