In 2015, one-ton bakkie buyers in South Africa could select their wheels from a handful of brands, mostly Japanese. Think Toyota Hilux, Mitsubishi Triton, Isuzu KB, Mazda BT-50 and Nissan NP300.
In the next four years, however, another six pick-ups may be added to the list, with the European brands launching an especially strong assault on the global market.
The reasoning behind their interest in this market appears to be expansion into an as-yet-untapped, increasingly lucrative segment.
In South Africa, the bakkie market continues to expand. South Africans love their bakkies. It remains a popular go-anywhere, take-everyone-with, do-it-yourself, outdoor-lifestyle-plus-workhorse vehicle.
For the first 11 months of 2015, passenger car sales were down 5.8%, compared with the same period in 2014, according to statistics from the National Association of Automobile Manufacturers of South Africa, while light commercial vehicle (LCV) sales –one-ton and half-ton bakkies, vans and minibuses – were slightly up.
Another way to look at it is to note that the nine most popular pick-up brands, selling 11 types of bakkies, sold almost 94 000 units from January to November 2015, compared with 90 500 units for the same period in 2014 – in a domestic economy that almost went into a recession last year.
The most popular vehicle sold in South Africa in 2014, across all segments, was the Toyota Hilux, at 37 562 units, with the Ford Ranger putting on an able, but unsuccessful, chase for the number one spot in 2015.
Hilux sales were down from 34 219 units for the first 11 months of 2014 to 32 955 units for the same period in 2015, while Ranger sales jumped from 25 720 to 31 006 units.
The third-biggest bakkie brand in South Africa is the Isuzu KB, at 14 267 units for the period to end-November 2015, followed by the Nissan NP300, at 7 721 units.
All these models are produced in South Africa, with LCV production in South Africa at 255 629 units in 2014, of which 118 585 units were exported.
South Africa has, over the years, established itself as somewhat of a bakkie production hub, with four one-tonners and two half-tonners assembled locally.
Bakkies not only sell well in South Africa, they are also premier export products, especially to the rest of Africa and Europe, assisting South Africa with its balance of payments quandary.
Exports to Africa have, however, fallen in recent months as the continent’s oil-rich countries have to face up to sustained low prices for the fossil fuel –a fact that has played havoc with many a government’s finances. Some policy revisions have also seen government support for pick-up ownership falter, such as in Algeria.
Nigeria’s push to develop its own automotive manufacturing industry has also seen exports from South Africa to the West African country convert from fully-built-up units to assembly kits for both Ford and Nissan, urged on by high import duties.
Toyota South Africa Motors (TSAM) reported a 20% drop in exports to Africa in 2014.
The question now is whether South African bakkie producers will face a similar fate in their European export markets as this continent’s vehicle brands expand into the bakkie market – or as they call it, the medium- sized truck market. Only time will tell if the long list of new competitors will steal away market share from the American and Japanese brands.
South Africa’s Toyota and Ford plants are, in particular, strong exporters to Europe.
With the first European competitor arriving in the form of Germany’s VW Amarok in 2010 (selling 3 608 units in South Africa for the first 11 months of 2015), this introduction is set to be followed by the French carmaker’s Renault Alaskan, to be launched in South Africa in 2017; the Italian Fiat Fullback, which will make its debut in 2016; and Mercedes-Benz’s new premium bakkie, set for launch in global markets, including South Africa, by 2020.
Fiat says the Fullback is its first contender in the “medium-duty pick-up truck segment” in Europe, the Middle East and Africa, which totalled 675 000 units in 2014.
The Wall Street Journal reported last year that global sales of one-ton pick-ups reached 2.34-million vehicles in 2014, with sales expected to increase to 2.83-million by 2020. (While sales are currently benefiting from a low oil price, it remains to be seen what will happen to this number should oil recover. A pick-up is not the most frugal vehicle at the pump.)
Daimler, Mercedes-Benz’s parent company, says the reasoning behind its push into the segment is that the group wants to broaden its range of luxury cars. It says more and more pick-ups are being used for private purposes, and that commercial, as well as private, users are increasingly asking for vehicles that have carlike specifications.
The sales focus for the German manufacturer’s new vehicle will be Europe, Latin America, Australia and South Africa.
Korean manufacturer Hyundai also appears set to launch its Santa Cruz lifestyle bakkie by the end of 2017. No doubt, this will also come to South Africa.
In South Africa, competition from the Asian markets looks set to increase further.
Already consumers can choose from one-ton pick-ups from China’s Foton, JMC and Great Wall Motors brands, as well as India’s Tata and Mahindra brands. (While Mahindra Bolero and Scorpio bakkie sales have slipped from 2014 to 2015, Tata Xenon and Telcoline bakkie sales have almost halved.)
FAW is also looking at introducing a one-ton pick-up in the domestic market, with soon-to-be newcomer manufacturer Beijing Automotive Group Company Limited also set to produce bakkies locally, anywhere onwards from 2018. These vehicles will also be for export to Africa and the rest of the world, according to the company’s project partner, the Industrial Development Corporation.
The current bakkie contenders in the market, however, are not resting on their laurels, with 2016 squaring up to be a big year for LCV fans.
A new Mitsubishi Triton will be introduced in 2016, with the importer hoping this will stop the bleeding, evident since the first Triton model took over from the popular Colt bakkie, then still produced by Mercedes-Benz at its East London plant.
Triton sales have dropped from 921 units in the first 11 months of 2014 to 535 units for the same period in 2015. (Another poor seller for 2015 has been the Mazda BT-50, which has failed to capitalise on Ford and Mazda parting ways in South Africa, with sales down from 2 306 units to 1 275 units.)
A brand-new Toyota Hilux will also make its debut in 2016. Still produced in Durban, Toyota has already showcased this vehicle at the 2016 Dakar Rally.
TSAM probably hopes to claw back some ground lost to US rival Ford, which has just spruced up its range.
Nissan also appears ready to finally introduce its new NP300 locally, with the vehicle already available in a number of global markets.
Nissan in South Africa could produce the new NP300 and Renault Alaskan locally, at its Rosslyn plant, although this has not yet been finalised.
Nissan and Renault operate in a global alliance.
In December 2016, it would be interesting to see not only which brand tops the crowded bakkie sales charts in South Africa, but also if the segment has managed to increase sales, rather than creating a rather huge bunfight for the same pool of existing customers.
Global market growth would also secure South Africa’s export markets.
Also, with one-ton pick-up trucks now seemingly discovered by the Europeans in their quest for sales growth, the only question remaining may be why small half-ton pick-ups are so unpopular in the world, with largely only South Africa and South America active markets for these vehicles.
Should one consider that a one-ton pick-up is a version of a large panel van or minibus so popular in Europe, and that small vehicles have grown increasingly popular in general, then, perhaps, it will not be long before more European, Japanese and American brands discover that half-ton bakkies also offer some market potential.
In an industry forever seeking new growth segments, this may not be an improbability. Who had, for example, ever imagined a Mercedes-Benz bakkie?