New truck sales in South Africa ticked up 2.04% in 2014 compared with last year, to 31 554 units.

The local truck market had delivered yet another “dynamic performance”, said UD Trucks Southern Africa (UDTSA) MD Rory Schulz on Tuesday, speaking at a media conference in Ekurhuleni.

“The truck market has managed to weather the storms we have seen over the last couple of years.”

Looking at the various segments in the South African truck market, sales of medium commercial vehicles (MCVs) declined by 4.86% in 2014, to reach 11 021 units. 

Sales of heavy commercial vehicles (HCVs) increased 0.04%, to 5 476 units. 

The extra-heavy commercial vehicle (XHCV) market saw sales jump by 7.68%, to 13 804 units. 

“A recovery in the platinum mining sector and increased activities in heavy construction and long haulage were the main drivers of demand for extra-heavy trucks,” notes Schulz. 

The star performer of 2014 was the bus market, jumping 19.79% compared with 2013, to 1 253 units.

“The phasing-in of bus rapid transit systems in metros such as Tshwane and Cape Town contributed significantly to the increase in new bus sales,” said Schulz.

Mercedes-Benz remained the top selling commercial vehicle brand in South Africa, with a 16.35% share of the market (2013:17.21%), followed by Isuzu with 12.84% (2013:13%) and Hino with 12.77% (2013:12.77%).

UDTSA, in fourth position, increased its market share from 9.96% in 2013, to 10.66% in 2014.

The local arm of the Japanese truck maker also increased sales by 9.29%, to 3 365 units, with the brand again the top-performer in the HCV segment.

Gazing into the crystal ball, Schulz expected more of the same in 2015, with the domestic new truck market anticipated to expand by 2.05%, to 32 201 units.

However, this forecast did not include any shock event in its modelling, such as prolonged strikes or energy blackouts, he added.

Several factors would impact on the local truck market, said Schulz.

Economic growth in South Africa was expected to increase slightly, to 2.5%, while some credit rating downgrades remained a concern. 

The country’s Gross Fixed Capital Formation index was also set to decrease marginally, as investment in construction and non-residential buildings decline – always a good indicator that there would be a demand for construction-related truck applications, noted Schulz.

Inflation was expected to ease owing to lower crude oil prices, while no interest rate hikes were expected until the third quarter of the year.

“Exchange rates remain a problem for the industry, with the effects of rand weakness in 2013 and 2014 to be felt through higher than inflation product price increases in 2015 by all truck manufacturers,” said Schulz. 

“We are also hoping that labour relations will be better after the prolonged industrial action in various segments throughout 2014,” he added.

Schulz also noted that bulk goods were still transported by road in South Africa, and not rail, creating demand for new trucks.

Transport operators were also operating younger fleets, with more responsible replacement policies in place, as compared with the expensive habit to sweat assets, as seen during the economic downturn in 2009.

UDTSA expected the MCV segment to contract by 1% in 2015, with 1% growth in HCV sales, 4% growth in XHCV sales, and a 12% expansion in the bus market.

UDTSA would work to “maintain and hold” its position in 2015, with the company expected to lose some market share this year as product gaps in the MCV segment impacted sales.

However, new products due for release in 2015 could boost sales, although the positive impact of these new releases would not be immediately felt, probably spilling over to 2016, said Schulz.

UDTSA, part of the Volvo Group South Africa, was set to launch its new Quester XHCV range in March.

The Quester range would not replace the company’s current Quon range, but would rather enhance UDTSA’s current product offering.

“Quester is expected to be UD’s most cost-efficient truck ever,” said Schulz. “The new range will cut fuel costs and maximise uptime, giving fleet owners quick, dependable payback that will help them succeed in their business.”