Industry News

Isuzu boss says current changes to industry can be embraced, harnessed

The most successful businesses to emerge on the other side of sweeping evolutionary changes in Australian road transport will be those planning for and adapting quickly to unfolding challenges.

It was one of several observations made by Isuzu Australia Limited Director and Chief Operating officer in a recent address to the industry.

The remarks were prompted by what Harbison sees as being a necessity to prepare businesses to pivot with change following a tumultuous year for road transport in Australia in 2020.

Bushfires, COVID-19, supply chain chaos and a national truck law review, including the ongoing intrastate border restrictions, were all cited by the Isuzu boss for the tremendous impact they have had on industry.

“Planning and processes that help guide and inform our response to situations such as we’ve seen over the past year are critical for a functioning industry, and in supporting the country post-COVID,” he said.

“I place particular emphasis here on having a structured, robust and importantly, practiced approach to critical incidents,” said Harbison.

According to Harbison, ‘business readiness’ will give operators a strong head start when issues arise, whatever they may be.

In acknowledgement of the recent snap lockdowns in Melbourne and Western Australia during February, Harbison postulated that road transport businesses were well-versed and better prepared to tackle these disruptions on the road to national recovery.

He pointed to an Access Economics report released by Deloitte in which conditions after the vaccine rollout were likely to see a 3.1 per cent hike in business investment with a further six per cent increase in household spending.

Australia’s overall economic output is also expected to rebound by 4.4 per cent.

These figures were supported by Westpac’s rolling Consumer Sentiment Index, which shows confidence at a ten year high in October 2020 according to Harbison.

“This is 48 per cent above the lowest levels reached during our toughest lockdown period in April 2020,” he said.

“Our behaviour as consumers serves to highlight the difference between this COVID recession and others in the past, including the downturn during the Global Financial Crisis and the grinding recession of the 1990s.

“Evidence of this confidence and other positive indicators, including the job market’s steady improvement with six out of seven initial job losses caused by the pandemic reclaimed, should provide further hope that the longer-lasting downsides seen in recessions of the past, will be contained.”

It is vital, however, that businesses and households fortunate enough to have established a buffer over the past year, while taking advantage of various incentives and tax breaks, will use that buffer to help offset the impact on the economy with the withdrawal of support programs said Harbison.

“Isuzu’s own research into the road transport industry shows businesses are prepared to ‘spend to stimulate,’ with 50 per cent of operators willing to purchase new equipment with the help of government incentives—which bodes well for the recovering economy,” he said.

Continuing market volatility with regard to international trade obstacles and the delicate situation with China, including its embargoes on Australian products most pointedly the sanctions on agricultural exports, have made it imperative for Australia to stand on its own two feet.

At present, the national income had hitherto increased rather than contracted as a result of the current trade circumstances.

“In reference to the effect of trade tensions on the road transport sector and other industries fundamental to the national economy, I believe in essence, we are fully prepared to grow and find new opportunities and markets,” Harbison said.

“Businesses in road transport now have a better understanding that we must adapt processes and plans for uncertainty in international parts supply and be well prepared to meet these sorts of challenges before they arise,” he said.

“And in many ways, Australia’s road transport operators are old hands at evolving.

“In a diverse and competitive industry, operators are quick to adopt technology, build cooperative relationships and have comprehensive strategies in place to changing address market demands.

As for demand in Isuzu’s own market of truck and power solutions manufacturing and sales, Harbison said the federal and state budget stimulus had created something of a ‘perfect storm’ of conditions this year.

Referencing a forecast average growth of two and a half per cent each year for the freight and logistics sector through to 2024, Harbison also pointed to the boom in construction and related industries.

“All economic indicators are pointing to a strong year ahead with a few headwinds to be mindful of, and a concerted push to take up new technology,” said Harbison.

“As always, we should be looking for growth as usual, not business as usual.

“We know it will take strong industry relationships and innovative thinking, along with rock-solid planning and processes that will drive us into the future.

“This in the hope that ‘change,’ whatever form it may take, is ours to embrace and harness.”

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