National Truck Plan: Modernising the Australian Truck Fleet

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National Truck Plan: Modernising the Australian Truck Fleet

Fremantle, 13 June 2014

Who is TIC?

• Truck Industry Council, formed 2001– Previously Commercial Vehicle Committee of the Federal

Chamber of Automotive Industries

• Promotes new trucks as: “Safer, Greener, Essential”

• 9 full members, 17 truck brands (March 2014)

• 3 associate members (engine & component suppliers)

Today’s Safer Trucks 2

Australian Truck Market: 17 TIC Member Truck brands

3Today’s Safer Trucks

Engine & Major Component Brands Represented



2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20200

5000

10000

15000

20000

25000

30000

35000

40000

45000

1870817923

20517

23544

31673

3473233499

3813136622

2865429393

27858

30745 30645 30100

Australian Truck Market (ALL > 3,500kg)Australian Truck Market by Volume

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Source of Australian Trucks

Total Truck Market: 30,745 Units (2012)

Today’s Safer Trucks

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NOTE: Australia total INCLUDES, all Kenworth, all Mack, local IVECO & local (most) Volvo

Total HD Truck Market: 11,378 Units (2012)


HD definition: All 4x2 and 4x4 over 39t GCM + all Multi-Axle

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TIC’s Proactive Stance on Emissions Performance

• TIC has been working with government to develop emissions ADRs since 2002

• It take over 60 post 2007 trucks to equal the PM emissions of just 1 pre 1995 truck


1 x Pre 1995

60 x Post 2007

EQUALS

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National Truck Plan (NTP) – V42014-2022

• Contains proposals that will assist government achieve its goals for– environment, – public health, and – safety

• Investment allowance restricted to trucks with Gross Vehicle Mass > 4,500 kg. Matches those trucks that are eligible for Road User Charge

• Assume Carbon Tax component NOT applied 1 Jul 14• A document updated 1-2 times/yr to adjust to policy and

market changesNational Truck Plan 2014-2022

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Plan seeks to address average age: Today’s technologies to modernise the fleet

National Truck Plan 2014-2022

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Proposed Incentives

• National Truck Plan offers government a 5-year proposal to modernise the truck fleet

• The proposed incentive is in two parts:1. A 15% investment allowance for new trucks meeting the

latest emissions standard2. A 25% investment allowance for new trucks exceeding the

current standard, such as alternative fuel vehicles and hybrids• A potential funding option is:

1. A Road User Charge varied by the emissions standard of the vehicle (Fuel Tax Credit lower for older trucks).

Note: Savings here help pay for the investment allowances2. This option (outlined in NTP – V4) details an incentive plan that is revenue neutral (or cash positive) over 5 years


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Tax Credit vs Emissions Standard (V4 Proposal)


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Cashflow over 5-Year Period

Net revenue exceeds cost during year 2, and remains ahead.NOTE: By 2020, HVCI Reform model (Mass-Distance-Location) may be in place


Net for Year CumulativeFinancial

Year $m $m $mYear 0 2014-15 0.0 0.0 0 0Year 1 2015-16 235.5 250.9 -15.4 -15.4 Year 2 2016-17 338.9 278.2 60.7 45.2Year 3 2017-18 324.5 309.9 14.6 59.9Year 4 2018-19 315.2 321.8 -6.6 53.3Year 5 2019-20 292.8 298.6 -5.8 47.5

By end Year 5 1,507.0 1,459.5 47.5

Savings By YearIncentive Revenue Positive over 5

years

Cost of Investment

Allowance ($m)

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Cumulative avoided health costs: Targeted vs BAU scenarios


15National Truck Plan 2014-2022

Forecast

Additional 102,000 trucks over 5 years

required average growth rate

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Total Non-Budget benefits


Very Conservative; Fuel economy gains post 2017 >5%

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Headline Figures

• Total net revenue gain of $47million in 5 yearsCost savings could continue beyond the 5 years, or can revert to an alternative HV Charging & road funding model after 2020

• Total non-budget Benefits of between $3.57 billion and $7.03 billion by 2022

• Fleet renewal accelerated by 102,000 trucks

• Timed to extract maximum benefit from current HV pricing scheme before any HVCI Reform


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Government and NTP: Common Goals

• Ageing truck fleet and transport workforce The NTP aims to significantly reduce the truck fleet age and with

more modern trucks new (younger) drivers will be enticed to the transport industry

• Improving road transport safety The NTP will modernise the national truck fleet bringing new trucks

with the latest safety features (ABS, FUPS, ESC)

• Reduce road transport fuel use and emissions The NTP will significantly reduce the number of pre 1995 Trucks on

the road, replacing them with trucks that have the latest emission technology (Euro 5 and 6) and from 2017 new trucks will potentially benefit from legislated fuel consumption improvements in Europe, USA and Japan


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Government and NTP: Common Goals

• Increase productivity The NTP will result in a younger truck fleet, with new trucks

offering much higher levels of telematics data. New trucks with RFS will replace older trucks with non RFS compliant suspension systems. These features can be used for HML, just one example of increased productivity gained from a newer truck fleet

• Improved data sharing By replacing the number of pre 1995 trucks in the national truck

fleet with new trucks, the NTP will raise the level of truck telemetry and data gathering, much of this data cannot be gathered on pre 1995 (non CAN) trucks. This increased level of truck data could be shared and used by the broader Australian transport industry and government organisations


Thank you

www.truck-industry-council.orgRegular updates and monthly

truck market commentary


Tony McMullan, Chief Executive Officer – Mob. 0427 941281

Mark Hammond, Chief Technical Officer – Mob. 0408 225212

http://www.truck-industry-council.org/

Documents

National Truck Plan: Modernising the Australian Truck Fleet