Challenging year in the logistics industry but a positive outlook for Hino Australia in 2021
Looking to the future but also reflecting on the past, we recently sat down with Bill Gillespie, General Manager, Brand and Franchise Development to get some insiders information.
It has been an extremely challenging year for many industries, how has Hino performed overall in 2020?
During 2020, the first quarter was business as usual and we were looking forward to a bigger year than 2019. Once the COVID-19 pandemic impact started to arrive truck factories around the world, not just Hino, started to either stop production because they couldn’t have people working in factories but in the Hino case we slowed production. That did ultimately contribute to two low months of production, which determined the outcome for the rest of the year.
The Australian government stepped in with a range of incentives including the Instant Asset Write-Off, which put a lot of stimulus into the marketplace, hence June was our biggest Hino June sales result in our 55-year history in Australia.
In the second half of 2020 we had our best market share result in our history and now going into our next quarter in 2021. We’ve got a super strong retail order bank and the dealer confidence is pretty much at an all-time high.
Hino will finish the year on a high, with a confident dealer network and strong customer demand. In the end 2020 was a very challenging year but, we’re going to end up 94% behind the same result last year, so we’re only really going to drop 6% year over year. A great result given the headwinds that 2020 have thrown us.
Has the COVID-19 pandemic challenged Hino and the network to operate differently?
Well, like all businesses, we’ve had to completely change how we operate during the COVID-19 lockdown period. It’s really been a state-by-state effect but all have implemented a number of preventative measures to ensure the wellbeing of all customers, staff and business partners.
Here in Sydney, we had everyone operating remotely for social distancing and safety reasons. Our industry and the dealers were deemed to be an essential service, so our parts warehouses stayed open to keep trucks on the road. Our biggest customer is Woolworths and their business was at a record high, so our parts warehouse and our dealer service departments stayed opened to keep those trucks on the road.
In Melbourne it was a much more challenging situation because it went on for a lot longer. Dealers in Victoria had to operate with click and collect parts. Service departments operated but bookings were essential and the sales team were working remotely, so they were impacted a lot more. But despite all of that, our Melbourne dealers have actually performed really well, and in some cases, they are going to have the same result as in 2019. A challenging year, but our dealers and our business has prospered during that period.
Launching the new Hino 300 Series must have been a key highlight for the year, how has the market responded to the new model?
The new 300 series Hino is the safest Japanese light-duty truck in its class on the market so It was a big deal for our dealers to be able to add that truck, and for us to produce it.
We went back to some of our major customers, and they responded very strongly to the safety features in that truck because driver safety and the safety of other users on the road is important to major corporate customers.
What are your top 3 predictions for the truck industry in 2021?
1. The market will be strong next year. There are a few reasons for that:
- Government infrastructure investment to support the building of supported roads and buildings.
- The last mile delivery business is double what it was previous to COVID-19. The Australia online retail market normally runs at 13% or 14% of all retail and it’s been running in the 23% or 24% range, which shows that a lot of people are getting things delivered and that means more new trucks.
- The Instant Asset Tax Write Off arriving in June 2021, that will drive bigger companies to invest because the limits that were around in June 2020 will not be there in 2021. We believe that a lot of companies will take advantage of that.
2. That last mile delivery business is forecasted to increase at the expense probably of the retail bricks and mortar business and distribution business is strong so that will mean that our medium-duty business will continue to be really strong.
3. There’s another horizon in June 2022 - the truck market is thinking it’s going to be a strong year in 2021, leading into June 2022.There are a few things that could curve but we’re all being confident about 2021.
Does Hino have any exciting plans for 2021 that you can share?
We do have a new model coming during 2021 in the heavy-duty area, and based on the pricing and specification planned we believe that this model will offer Hino a big upside in the second half of 2021.
We also have some new additions which we can’t share yet in the Built to Go range, which also will be coming through in the second half of 2021. All of those details will be revealed at the Brisbane Truck Show in May 2021.
Thanks for your time Bill.