South Africa’s commercial vehicle industry is still facing some tough challenges at the halfway mark of 2016. With the industry’s growth closely linked to the country’s macroeconomic trends, it is following a similarly uphill road to recovery.
According to the latest results released by the National Association of Automobile Manufacturers of South Africa (Naamsa), Associated Motor Holdings (AMH) and Amalgamated Automobile Distributors (AAD), new truck sales remain constrained. A total of 13 046 trucks and buses were sold during the first half of 2016, a 9.3% decline when compared to the corresponding period in 2015. However, according to Gert Swanepoel, acting vice president of UD Trucks Southern Africa, certain segments are showing some improvement.
“Over the past six months, bus sales managed a 4.6% growth year-on-year to 480 units, which is mostly due to the fulfilment of some key government tender orders,” says Swanepoel. “Sales in the Heavy Commercial Vehicle segment are also almost back on par with 2015’s half-yearly results, showing only a slight 0.8% decline to 2 319 units.”
Meanwhile, the Medium Commercial Vehicle (MCV) segment is down by 19% to 3 948 units, while Extra Heavy Commercial Vehicles (EHCV) showed a decline of 6.7% to 5 898 units on a year-to-date basis.
Many of the economy’s industry sectors, including agriculture, mining and quarrying have recorded steep contractions this year and this, combined with low business confidence and GDP figures, have had an adverse effect especially on the investment-heavy EHCV segment.
On the bright side for local truck manufacturers, a lower Rand/ Dollar exchange rate combined with a renewed focus on exports into Africa saw local truck manufacturers selling 601 units outside of South Africa’s borders thus far in 2016 – an increase of 76.2% year-on-year.
“As is the case with UD Trucks, manufacturers are investing in the development of their dealer networks along the major trade corridors within the region. The result is increased support and accredited technical assistance for fleet owners who operate across borders in southern Africa,” says Swanepoel.
With twenty different brands reporting into Naamsa, competition is rife to compete for the available new vehicle sales business in the market. “For potential truck buyers, the decision mainly comes down to which product offers the best value and efficiency per kilometre, as well as the quality of aftermarket support provided by the manufacturer and dealer,” says Swanepoel.