Q&A: What’s New with Isuzu Commercial Truck of America – Equipment

WT: What are some of your goals with your new position?

SKINNER: Much of what I will do will stay similar or the same. But, I do believe there will need to be a shift in my goals and responsibilities. I think this shift will revolve around how we, as a distributor and how our dealers work toward the future. As what lies ahead with the ownership experience changes, we will see a transition to more of an electric vehicle base.

I don’t think it’s going to happen overnight. The support that we, as an organization, will have to provide is going to be different, and what the dealers are going to have to do is going to be different.

But, we better be prepared because electric vehicles are a very different ownership experience.

So, how we adapt to all of that will be important. I think there’s going to be more focus on this longer-term strategy. How do we ensure we’re set to go today because we still have to stay in the here and now.

Most of the trucks sold for the short- and mid-term will still be diesel and gasoline trucks. So, for 2024 and 2027, how are we going to make sure we meet those regulatory issues? And how are we going to be sure we have the products customers need? And at the same time, how are we going to be prepared as we transition to electric vehicles, whether through regulatory issues or customers trying to meet aggressive carbon neutrality goals?

How will we make sure we can stack all of that and do well at all? I think the goals versus the responsibilities with this new position will stay the same to be sure that we’re very well set for changes in the U.S. and Canada.

But, how do we do those things that we find that are challenging? And how do we deal with them? How do I convey that back?

I love a movie by Michael Lewis called Moneyball, and I quote it to the team a lot. In the end, Billy Beane sits down with the owner of the Boston Red Sox, who tries to hire him away, and says, “You know, you’ve tried to do all these new and different things. The first guy through the wall is always the bloodiest.” I always remember that quote because I feel to Isuzu that we will be a little bit of that.

How do we succeed with those shorter-term pieces and balance those long-term goals? How do you balance what you have with the current portfolio and what will happen with this transition to electric vehicles (EVs)? We will get an excellent chance to learn from all of this. But, I believe my roles and responsibilities will mainly focus on how we suitably handle this.

WT: Can you share about Isuzu’s growth since our last interview three years ago?

SKINNER: We’ve seen tremendous growth in demand. The growth we’ve since over the past year-and-a-half is considerable. The biggest challenge is keeping up with demand.

If you look at last year, and all the challenges that we like to complain about, and how difficult of a year it was, there was no denying we had unique and different challenges than ever before. But, if you look objectively at the numbers, 2021 was the second-best year for our Class 3-7 product that we’ve ever had. Our second-best year had all of these pitfalls we had to work around.

Our part sales, which is a strong indicator of our dealer service and parts business, was the best year ever, by a longshot.

When you look at what transpired in 2021, while I think many of us like to look back and say there is this issue of what we’re able to supply and market demand, there is a huge, missed opportunity that I call the “land of disappointment.” I think everyone is focused on that. But it was pretty darn good when you look at what we did.

However, we know we need to do better because there’s more demand out there. If all goes as planned, 2022 will be the year we build more product than we ever have before, trying to catch up with that pent-up demand.

There continue to be supply chain challenges. We’ve sold everything that we can build. But that’s good and bad — a double-edged sword. You don’t want to miss an opportunity. And we feel like we’ve missed that. So, we’re working on making this year one we build more trucks than we ever have before. It seems like there’s an insatiable appetite right now.

WT: Looking toward the future, what do you see as market shifts and further changes down the road?

SKINNER: That’s a serious question! Let’s start with the higher altitude stuff first: supply chain challenges.

I think we’re going to continue to face supply chain issues well past this year for many reasons. Number one, I don’t believe we are close to being out of the supply chain issue. We’ve seen what’s happening in China right now with shutdowns. We’re all going to have to get used to dealing with that.

Longer-term, I don’t think there will be an immediate fix to those challenges. I think it will cause OEMs to look at how we build protections into processes. Are there things we can do to make the flow of this supply needs more consistent? That’s a high-level question that isn’t easily fixed immediately. I think you will see that challenge more specific to our medium-duty industry.

I’ve beat this drum hard when you and I have talked over the past several years: I continue to believe that the growth in eCommerce final and mid-mile will continue to impact the medium-duty industry, which is our playground. That growth is not going to stop.

If you look at the trends with the average distance of goods hauled, the percent that eCommerce accounts for overall retail, the distance goods are hauled continues to decline. This decline indicates shorter, final-mile transfers of goods. You also see the percentage of eCommerce continues to grow.

You’re going to see areas of business that are predictable with growth, but also some that are a bit of a surprise we may not have seen coming. We’ve had a few of those, like delivering vehicles to people’s homes during COVID. Before, you didn’t have a lot of people shopping for vehicles online and not going in and inspecting them. This trend is becoming more common, and those areas help our business and will continue to.

Some changes will be what I would call more traditional; some will be a bit unexpected. You will continue to see change for us as the COVID-19 pandemic acted almost as an accelerant or a catalyst for this growth in eCommerce. That’s a trend that’s going to continue.

You also can’t ignore the shift to EV. Anyone at the Work Truck Week this year heard the electric call. There were many options, and more OEMs are getting involved in electric. That is going to impact us as OEMs. And it’s also going to affect how our dealers must operate.

Because I’ve talked about this for a long time, I think the differences in hardware in vehicles will diminish. You’re going to have more like-kind-quality products because of the expense of these technologies. And, you’re going to find more people utilizing supplier-driven content because you can’t have it all on your own.

We will have to focus more on the brand and work together as an OEM with our dealers and customers to create the best customer experience possible. What’s going to happen will become more about the brand and their experience versus the hardware, in my opinion.

WT: Any last thoughts to share with Work Truck readers?

SKINNER: All that know me will say I’m an eternal optimist. I always try to look at the bright side. I genuinely believe that, while we face several challenges right now, if you look at the medium-duty segment and our industry, I think the long-term trajectory is good.

I also feel that Isuzu can take advantage of that trajectory. We’re working on solutions with gas and diesel engines that will allow us to enhance flexibility based on upcoming emissions regulations.

We’ll have one of the broadest product offerings we’ve ever had, even though we wil
l face some pretty stringent regulations.

We announced an EV prototype for our Class 6 & 7 product that we’re doing with Cummins. Additionally, we’ll have our first N-Series EV truck that will be out in late 2023/early 2024. We’re not only going to be there for the gas and diesel market, we know those are important. We must be there to provide for the vast majority of fleet customers.

But, we also know there’s a customer base looking toward the future, and we’ve got to be there to be sure that we are playing ball.

We’re in a great position. With the growth that we will continue to see in medium-duty — I feel terrific about where the industry is going and our role. 

Originally posted on Work Truck Online