Jul

Truck sales holding up well

2014-07-17 16:45
The Freightliner Argosy chalked up exceptional sales in June to taking the top spot for the month in the Extra Heavy Vehicle segment with 150 units sold.

Despite persistent unfavourable economic conditions, the South African truck market once again showed great resilience by logging another positive sales performance last month. In addition, during the first half of the year, the industry has grown by 2.21% compared to the same period last year, to a total of 15 148 units.

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), a total of 2 911 units was sold during June.  This is a significant 11.49% growth on May 2014’s results, and 4.67% up on June 2013’s total.

The Volvo FH gave a good showing in the Extra Heavy Vehicle segment during June with 110 units sold.

The Volvo FH gave a good showing in the Extra Heavy Vehicle segment during June with 110 units sold.

“The truck industry is certainly bucking the trend this year,” says Jacques Carelse, managing director of UD Trucks Southern Africa. “Even though the overall economic outlook for the rest of the year remains mixed to negative, the truck market is expected to continue to hold up well and report moderate growth figures.”

Carelse says various inflationary pressures, exchange rate vulnerability, labour unrests and slow economic growth are, however, continuing to put a damper on the potential level of growth within the truck market.

The good folk at UD Trucks were rubbing their hands in glee at news of the June sales with 172 Quon trucks sold in the Extra Heavy Vehicle segment. Pictured here is the new Quon GW26 450 6x4 truck-tractor targeted at the popular 440 to 460hp market.

The good folk at UD Trucks were rubbing their hands in glee at news of the June sales with 172 Quon trucks sold in the Extra Heavy Vehicle segment. Pictured here is the new Quon GW26 450 6×4 truck-tractor targeted at the popular 440 to 460hp market.

“Proof in point is the decline in sales in the Heavy and Medium Commercial Vehicle segments, which mainly consists of units transporting freight and fast moving consumer goods. With GDP declining and the country’s general poor economic performance, sales in these segments have already declined by 1.19% and 6.25% respectively this year,” says Carelse.

While Isuzu could not have been unhappy about the 94 F Series units sold in the Heavy Vehicle sector, they must have had huge smiles on their faces with the 282 Isuzu N-Series sold during the month.

While Isuzu could not have been unhappy about the 94 F Series units sold in the Heavy Vehicle sector, they must have had huge smiles on their faces with the 282 Isuzu N-Series sold during the month.

He was quick to add, however, that sales in the Extra Heavy Commercial Vehicle segment have noticeably increased by 10.23% to 6 832 units. “The growth in the EHCV market is mainly due to continued spending on infrastructure-related projects. Over the past five years, Government’s spending in this regard is estimated at around R1-trillion and a further R847 billion is budgeted for this aim over the next three years on projects such as mining, agriculture and services. Truck models that are suited to supporting the development of these infrastructure projects will continue to sell well,” says Carelse.

Still on the positive side, looking at the remaining segments’ performance on a year-to-date basis, sales in the bus segment has increased by a significant 15.68% to 568 units as a result of a number of large tenders recently awarded

Editor’s Comment: It never ceases to amaze me how some financial institutions, when commenting on monthly sales figures, miss the all important truck segment – almost as if it did not exist. I received a press release from Wesbank which stated: “The South African new vehicle market continues to weaken, with year-on-year sales down for the third consecutive month, according to the National Association of Automobile Manufacturers of South Africa (Naamsa).”

When I read that, I had not seen the NAAMSA figures and thought: ‘Oh gats, truck sales are down”. But not so. Here’s what the NAAMSA statement on the sales figures said: “Compared to the corresponding month last year, sales of vehicles in the medium and heavy truck segments of the industry at 942 units and 1 984 units respectively, reflected a mixed performance with medium commercial vehicle sales showing a decline of 109 units or 10.4%, whilst heavy trucks and buses had registered an improvement of 254 units or a strong gain of 14.7%. “

“The domestic market was likely to register a decline, in volume terms, of around 5.0% compared to 2013 with the main impact in the new car and light commercial vehicle sectors. The heavy and extra heavy truck markets were expected to continue to hold up well. In the case of exports, further improvement was anticipated during the second half of 2014 on the back of better global economic growth.”

Surely the Wesbank comment should have been more sector specific – something like: “Apart from the heavy truck segment which continues to show strong gains, the South African new car and light commercial vehicle market continues to weaken, with year-on-year sales down for the third consecutive month.”

It is important to differentiate between the two and the banks should know this. Car sales are one of the indicators that reflect sentiment in terms of consumer confidence while truck sales are more aligned to GDP growth or decline. They are important economic indicators and should not be lumped together. That aside, the truck sector has enough challenges without being lumped into the passenger car and LCV sectors’ problems.

COMMENT ON THIS STORY
0 comments

Add Your Comment

fourteen − 13 =