Competition, funding, manufacturing: How the EU bus industry can stay competitive? President Domenico Nucera explains Iveco Bus’ approach

The growing market for e-mobility (and where to place subsidies?), the focus on industrial strategies aiming at ramping up volumes, the role of partnerships and the factors that can enable traditional European OEM to keep a relevant place in the market, on the thin line between product standardization and customer-centric personalization.

We discussed the above (and more) topics with Domenico Nucera , at the helm of Iveco Bus since late 2021. He is also covering the position of 2024 Chairperson of ACEA bus and coach division.

What trends have you observed on the European bus market in 2024? And what are the forecasts and expectations for 2025?

For IVECO BUS , 2024 will very likely be a record year. And we are confident to be similarly successful again in 2025. The story we are writing is not a trivial one: it is linked to a market that is moving at an unprecedented speed, in a non-linear way. At Iveco Bus, despite belonging to the world of traditional industry, we have been able to anticipate the trends and orient our strategy accordingly.

Any data?

Today we have an order portfolio value that has quadrupled compared to a year ago. In the electric bus market, we have reached a 20 percent market share in some markets, such as Italy. Our book-to-bill is 1.12, 50 percent higher than a year ago. And the term of comparison is with the levels of production capacity updated during the last year. Our factories will be full for a year, a year and a half.

And this year you have announced a major investment…

Yes, we will invest 600 million euros, 100 of which already invested this year, mostly in research and development or for the localization of high-tech production such as electric vehicles in Annonay. A step that comes in addition to the opening of the Foggia plant in Italy. In addition, this year alone we have hired 600 people in France, responsible for the production of electric vehicles for all European markets. These are facts that tell a lot about our strategy.

What do you mean?

Localizing the activities as much as possible and bringing our capabilities close to customers. In Foggia, for example, we customize the vehicles together with the customers. A thousand buses have passed through Foggia in the last year. In Annonay we plan to double our production capacity next year. Mostly electric vehicles, to which we should add the production coming from Rorthais. Finally, we started few months ago the production of the electric Crossway LE in Vysoké Myto and we are already delivering this year. The news is that all four of our plants (Foggia in Italy, Vysoké Myto in Czech Republic, Annonay and Rorthais in France) are enabled to produce electric buses, while maintaining a significant share of conventional vehicles, in compliance with our approach aimed at technological neutrality. After all, key enablers for a total transition to zero emissions are not yet in place.

Subsidies on the purchase of the product will not get us out of the critical phase. Instead, what should be financed are the key enabling conditions, and with viable financial models. We need to change the paradigm by supporting the costs of charging infrastructure, the cost of energy, the cost of training… The market is not yet mature enough to be self-sustaining. If we believe to make it self-sustaining through subsidies on vehicles, we are leaving the playing field to the manufacturers from the Far East.

Before delving into the topic of ‘key enablers’: how can the European industry maintain competitiveness against products, such as those from Asia, that are highly industrialized and mass-produced on immensely larger volume scales?

Competitiveness is only part of the problem. Here I’d like to answer as ACEA president of the bus and coach division. The European industry is experiencing a period of extremely high levels of stress. A stress that has two concauses: the imperatives of radical energy transition and the challenge of competitiveness. But the real cause, the trigger, is only one, namely the total disconnection between the world of regulation and the reality of the market. This gap is widening. As a European industry, we are faced with a ‘made in Europe’ that is at serious risk. Today, e-mobility is for sure a risk, but also an opportunity, and there are no longer any doubts about the future of this technology, at least in the urban segment. The disagreement arises in the other segments: interurban and touristic. On these we have asked the EU to anticipate the review of the CO2 reduction targets to 2025, two years before the deadline now scheduled for 2027.

How do we get out of this impasse?

First of all, a collective effort is needed by all players to propose shared solutions. In any case, subsidies on the purchase of the product will not get us out of the critical phase. Instead, what should be financed are the key enabling conditions, and with viable financial models. We need to change the paradigm by supporting the costs of charging infrastructure, the cost of energy, the cost of training…

As ACEA, we hope to complete with other viable and sustainable solutions for all the ecosystem, from the logic of subsidies on the purchase of vehicles. The market is not yet mature enough to be self-sustaining. If we believe to make it self-sustaining through subsidies on vehicles, we are leaving the playing field to the manufacturers from the Far East.

The goal of Iveco Bus ambitious investment plan is to update the entire product range by leveraging the successful history of our intercity model. The new generation city bus range that we are developing will have more than 50% commonality with the Class II family. And, I insist on this point, it will have a European footprint, with factories and services close to the customer, with whom we will take care of the customization of the products step by step. Customer proximity is fundamental for us, not only in terms of dealers but also of factories.

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