Home FleetWatch 2013 Newsflash Truck sales buoyant but strike hits exports hard

Truck sales buoyant but strike hits exports hard


Despite continuing industrial strike action in the local automotive sector, year-to-date truck sales continued to climb by a noteworthy 10.2% to 20 500 units during August. Year-on-year sales results for August also show a 26.9% increase on sales, reaching a total of 2 844 units.

This is according to the latest combined results released by the National Association of Automobile Manufacturers of South Africa (Naamsa), Associated Motor Holdings (AMH) and Amalgamated Automobile Distributors (AAD).

“The encouraging sales performance in the Medium, Heavy and Extra Heavy Commercial Vehicle segments is an indication of a higher level of investment spending in the economy as a result of various infrastructure development projects,’ says Jacques Carelse, managing director of UD Trucks Southern Africa.

“We also believe that the higher sales rate was driven by some pre-emptive buying by fleet owners who wanted to avoid further price increases which are imminent due to the weaker Rand exchange rate.’

Another comment on the excellent truck sales comes from Calvyn Hamman, senior vice president for sales and marketing at Toyota South Africa Motors who says: “We, through our Hino South Africa affiliate, have seen high levels of price competition in the commercial vehicle segment and this, combined with municipal tender deliveries, has boosted truck sales and will continue to do so for the coming months.’

Looking at the performance of the various truck market segments on a year-to-date comparison with 2012, Medium Commercial Vehicle (MCV) sales increased by 13% to 7 659 units. The Heavy Commercial Vehicle (HCV) segment experienced a 9.2% growth to reach 3 477 units, which is significantly higher than in previous years.

Sales in the Extra Heavy Commercial Vehicle segment grew by 10.8% to 8 673 units. The 691 bus sales recorded represents a 13.2% decline when compared to the same period in 2012.

Equally, or perhaps more impressive, is the comparison of sales for this August compared to August 2012. Sales of vehicles in the MCV and HCV truck segments of the industry – at 1 038 units and 1 809  units respectively – recorded an increase of 201 units, or 24,0% in the case of MCVs and an increase of 405 units, or 28,8%, in the case of HCVs.  Good stuff going on out there.

Interesting to note is that for individual models, the Mercedes-Benz stable performed exceptionally well in the Extra Heavy segment capturing first, second and fourth spots on the sales ladder.

First was the Freightliner Argosy with 152 units sold, followed in second place by the Mercedes Actros with 133 units and the Merc Axor in fourth place with 124 units sold. Third spot went to the MAN TGS with 131 units sold.

Isuzu Trucks came out smiling in the Medium CV sector romping home in first place with 198 Isuzu N-Series sold. Second was the Mercedes-Sprinter with sales of 175 units and third spot went to the Hino 300 Series which recorded 152 sales.

In the Heavy CV sector, Isuzu Trucks again came away smiling taking first place with its 102 sales of the Isuzu F-Series. UD Trucks just pipped Hino Trucks to the post for second place with 92 UD units sold to the 90 Hino 500 Series sold. Phew! That was a close run.

While it has been pretty much good news on the trucking front up to now, Carelse says the latter part of the year seems to hold a less promising outlook with various factors expected to have a dampening effect on new truck sales.

“On-going labour disputes in the automotive sector and potential prolonged industry action at South African gold mines will have a definite impact on the sales within the truck industry, as its growth is closely linked to that of the economy in general,’ he says.

“In addition, business confidence also experienced a quarter-on-quarter decline of six points to 42, which will certainly affect truck sales adversely.’ UD Trucks Southern Africa earlier estimated a total of 29 000 expected trucks sales for the year.

Exports adversely affected

On a broader industry front, while the full effect of the strike in the automotive industry has not impacted heavily on across-the-board domestic vehicle sales , YET (watch September sales) , it has already had an adverse impact on exports which are normally the first sector of the industry to be negatively affected by a strike.

According to NAAMSA, new vehicle exports during August at 19 284 vehicles (the vast majority being cars), had registered a substantial decline of 5 740 units – or a fall of 22,9% compared to the 25 024 vehicles exported in August last year.

NAAMSA attributes this decline to the current strike at the seven major manufacturing plants and says further production losses will be reflected in anticipated lower export numbers for September. As a result, annual projected industry export sales numbers would be revised downwards.

NAAMSA has warned that one of the negative consequences of the current strike action is that it undermines South Africa’s status as a reliable supplier to international export markets and could well negatively affect future export contracts being awarded to South African automotive manufacturers.

“Labour stability represents a key consideration in decisions by multi-national corporations to allocate vehicles for production in South Africa. Unless the strike action is settled in the next few days, the damage to future prospects and on foreign investment sentiment could be far reaching and take years to re-address.’

One company which has been hit an early blow by the strike , albeit in a specific vehicle category – is Nissan South Africa where severe stock shortages of the company’s locally-manufactured light commercial vehicles, the NP200 and NP300, affected deliveries in the second half of August. According to Johan Kleynhans, Nissan South Africa’s marketing, sales and aftersales director, this cost an estimated 750 sales and caused huge frustration for dealers and potential customers.

“Industrial action had a dramatic and sudden impact on what initially looked like being a very good month for us, especially for our half and one-tonne bakkies. We were unable to capitalise on the continued LCV demand which is being driven by sustained economic activity and infrastructure needs,’ lamented Kleynhans.

Around 30 000 workers at automotive plants around the country have been on strike for the past two weeks which, according to NAAMSA, is costing the industry up to R700-million per day. The National Union of Metalworkers of South Africa (NUMSA) has warned that the strike will be intensified if their demands are not met.

August vehicle sales

Market segment

Aug 2012

Aug 2013

% change

Passenger vehicles

40 379

38 892


Light commercial vehicles

13 650

14 376


Medium commercial vehicles


1 038


Heavy commercial vehicles




Extra Heavy commercial vehicles


1 245






Vehicle exports

25 024

19 284


Overall market (local)

56 270

56 112


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