Fleet News

Iraq war threat set to hit vehicle orders

FLEETS could slash orders for new vehicles if the West becomes embroiled in a war with Iraq, a leading manufacturer has warned.

Already the threat of conflict has created a period of uncertainty but sales of light commercial vehicles have remained strong. However, prolonged fear of conflict could be enough to put fleets off investing in vehicles, Iveco believes.

This would damage a growing market. Sales of 3.5-tonne vans reached a total of 65,306 units last year, up 3.6%. Sales of commercial vans in the 2.8 to 3.49-tonne sector reached 38,739 units, up 6.7%.

At its annual State of the Nation briefing, Iveco's director of commercial communications Nigel Emms, said: 'If war happens then we can expect an economic slowdown. Prolonged uncertainty prior to conflict or a prolonged war itself would be highly damaging and reduce economic activity accordingly.

'A war concluded quickly and successfully would be likely to have a limited impact, with oil prices likely to remain stable. If we avoid war, then, according to Chancellor of the Exchequer Gordon Brown, we can look forward to an improving economy, fuelled by borrowing to fund increased public spending.

'That would take the pressure off the consumer, counteracting a potential slowdown in house prices and increased concern over pensions and savings.'

Commercial Vehicle Business Unit director Chris Thorneycroft-Smith said Iveco expected a 'continued levelling off' of van sales in the 3.5-tonne market, with fleet sales helping to boost the sector.

He added: 'There's some retail business in there, so if confidence were to go, this could be a sector that's hit harder than most. But even more is contract hire – and a lot of it is based on three to four-year contracts.

'Iveco is still a relatively new player in the overall van sector – we only actually entered the lighter 2.8 to 3.4-tonne sector three years ago for example. And with a large number of long-established players, the van market has never been an easy one to break into.

'So we're delighted to have achieved what we have and in a comparatively short space of time.'

But managing director Giuseppe Franchi warned: 'Uncertainty is the byword – and until things become clearer on the political front, it is likely to remain that way.' A more stable environment is critical for the firm, as it is currently launching its new Iveco Daily HPI.

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