The name, Intertruck Distributors, as importers for International trucks, seems reasonable enough. But a visit to their Mt Maunganui factory reveals that Intertruck Manufacturers and Distributors would be more appropriate.
This is not an automotive import and distribute business model at all. It is import, assemble, add NZ specific value, and then distribute the finished heavy trucks.
In a well-equipped, tidy 35,000 square foot factory, Intertruck’s business is building trucks and assembling them from complete knocked down units (CKD) imported from the United States. Just like the old days. But not out of nostalgic need, as managing director Comer Board tells DIESELtalk.
Costing $3.5 million, the plant that Board built includes state of the art bake ovens and engineering workshops with capacity to assemble 300 trucks per year. Two and half acres of land are available on site to accommodate that expansion.
Board comes from a family farming background but has been obsessed by trucks since he was 18 years old. After a profitable stint in the Gulf of Carpentaria’s open cast mining industry, he became an owner-driver before moving into truck sales with Western Star; trailer and axle sales with the likes of Fruehauf and Road Haul Specialities as they were known then (now TATES).
Board’s obsession for trucks is now fully channelled through his passion and knowledge of the International brand, and New Zealand’s unique local trucking requirements.
Back in the 1990s, the International brand was distributed by Johnson International Ltd, who was then the Iveco importer, with International sold under a licence agreement from Iveco Australia. Australian-built Internationals were manufactured at Iveco’s Dandenong plant and exported to New Zealand.
Board formed a company, Central Pacific International and opened a dealership to sell both Iveco and International-branded trucks in the Bay of Plenty area. They soon discovered what Board had long suspected – customers had a distinct preference for North American manufactured Internationals over Australian ones.
Several approaches were made to Johnson to allow Central Pacific to import Internationals directly from North America, but these were routinely denied.
Eventually, Board did reach agreement with Navistar in the US (worldwide owners of the International brand) securing distribution for International trucks and parts. Re-christened as Intertruck Distributors NZ Ltd, Board adopted a single brand philosophy that is on-going.
However, the International brand had fallen off most buyers’ radar by that stage, due in part to former owners, International Harvester, re-trenching back to the US and taking their toys with them. A somewhat ‘high and dry’ feeling ensued among existing International owners and Board’s first challenge was to re-build confidence, and trust, in the brand.
As an ex-truckie, Board knew New Zealand’s roading and regulations demanded a heavy truck product configured to NZ conditions. He saw the opportunity to fill that market gap with US steel.
Buyers of American heavy have certain expectations, says Board: “Customer expectation around American trucks is high. They are buying big North American iron to do big jobs and as a truck builder and seller, we build into the vehicles the critical factors on the assembly line.”
Intertruck’s product development team gathers the customer input around specific requirements, but Board points out that Intertruck’s institutional truck knowledge as builders, mean they understand everything about their trucks (assembly is from the ground up) and the direct two-way dialogue between manufacturer and customer is empowering for customers, who can talk direct to the manufacturer, with Intertruck advising, adapting and making key specification calls as necessary.
Board is comfortable with where they’re now at quality wise after seven years of truck manufacturing: “We’ve learned a lot over the seven years and we believe we are building 99% quality into our products. We’re aiming for 100% but I doubt anyone actually achieves that; but we are always driving improvement into our product.”
International parent Navistar recognised that Intertruck Distributors were spending large amounts on equipping International to NZ homologation and standards, to compete with other heavy US and European brands.
By all accounts, all roads led to Intertruck and Navistar exploring the local assembly process. Navistar, keen to build the brand back up in New Zealand proved a good sounding board and active supporter, but not without going through robust processes which included ticking the requisite boxes for and against assembling CKU vehicles on arrival at the Mount.
Out of a total of seventeen boxes, sixteen were ticked with just one negative.
Sixteen out of seventeen isn’t bad is it? Well, only when the negative in question is the global economic downturn (GFC). These were tough times for Intertruck Distributors as factory and assembly staff had to be made redundant.
A problem that would itself have been largely irrelevant had they been ordering in complete built-up units (CBU) like everyone else, now cast its shadow across the still fledgling truck assembly business.
Board had to contend with an almost complete collapse in local demand, while Navistar had to contend with a complete collapse in global and US demand.
They also needed to survive a panic wave following the crisis – acutely felt in the auto industry – which was becoming ever more disenfranchised and Federal Government-dependent. Board was caught between a rock and a hard place: “When we were ordering CBUs, that was a US
problem – we could simply stop ordering. But if we stopped ordering [during GFC] it affected Intertruck as far as our manufacturing facility went.”
The GFC was ridden out – Intertruck’s prudent management kept the production line moving, though with significantly less demand. Navistar survived GFC’s after-shocks and Board believes that International in NZ now has a complete model offering: “Before the GFC we never had this range, and it was vital for us to focus on being successful with cab-over and smaller products also.”
Intertruck is now in the 14 to 21 tonne market, offering smaller models suitable for multiple vocations and launching into the AWD market, gathering interest from line companies, utilities and the drilling industry, “People who need AWD and a heavy front axle rating, have been drawn to the very low chassis height which is at normal road truck height; a great advantage.”
The future looks bright for Intertruck and International again after a painful GFC. With the development work on the 9800 model now paying dividends, Board says: “The 9800 comes from a general fleet truck line which we looked at holistically, and wanted to make it more appealing – we initiated a comprehensive development programme that would make it totally NZ-specific and equipped to the highest standards that Kiwi truck drivers demand as standard.”
Board points to the assembly line: “You can see it’s now a very premium truck that stands up tall against its competitor set, because we have put so much care into what our customers want.”
There is another advantage to building trucks says Board – parts. “You never have to say ‘I’ll get one airfreighted’ again. Typically a manufacturer will not have the more unusual part that may get damaged in a collision, for example.
“We simply take a part off-line (and re-stock the line) because we have the whole truck sitting out there, so we get trucks back on the road the next day.”
In emissions terms, in the cab-over range, Board says that they will meet the June 2014 deadline to be compliant with EPA 07, and that the aim is also to have all products running SCR. With conventional trucks, International is well ahead of the curve, at EPA 2010, equivalent to Euro 6.
Intertruck is now able to concentrate on increasing volume. The broader product range they now offer – including the lighter specialised cement mixers and tippers – provides a platform to allow them to realistically aim for 100 units a year.
“That will reduce our overall operating costs and enable us to be even more competitive,” says Board. “It was vitally important we developed the products to the stage we are now at, where customers will want to buy them. That is why we have welcomed back to the International fold names like Jackson Transport and Toll as customers – they love what they get, and dealing direct with manufacturers.”
Manufacturers, distributors and dealers to be precise about it.
