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Recovery possible for SA, sub-Saharan truck markets, says UD Trucks

20th January 2017

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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Both the South African and sub-Saharan African (SSA) new-truck markets should see growth this year, following a tough 2016, says UD Trucks Southern Africa (UDTSA) marketing director Rory Schulz.

The South African new truck market, including exports from South Africa into Africa, declined by 11%, to 28 144 units. Domestic sales declined by 11.3% and exports were down 1.9%.

South Africa experienced low growth and declining business confidence amid political and economic turmoil.

UDTSA is responsible for around 14 markets in SSA.

Total new-truck sales in SSA (all brands) reached 4 002 units in Kenya; 1 146 units in Angola; 262 units in Mauritius; 788 units in Uganda; with 4 974 units sold in the rest of the countries under UDTSA’s marketing gaze.

Angola was hit by low oil prices, says Schulz, while the Kenyan market had to recover from an increase in import duties on fully built-up trucks.

This year is expected to be another tough one for the South African auto industry, he adds. However, an easing in drought conditions, an improvement in commodity prices and a strengthening rand could assist domestic truck sales in 2017.

Negatives lurking on the horizon include the continued threat of a credit downrating; persistent domestic political tension and a likely increase in taxes.

UDTSA’s forecast is for a domestic new-truck market of 28 998 units, inclusive of roughly 1 000 export units.

Schulz expects the new bus market to grow by 6%, the medium commercial vehicle market by 0.6%; the heavy commercial vehicle segment by 5% and the extra-heavy commercial vehicle segment by 3.5%.

In contrast to this rather sluggish growth, the Ugandan new-truck market should expand by 14.2%, to 900 units; the Mauritian market by 5%, to 275 units; the Angolan market by 0.3%, to 1 150 units; and the Kenyan market by a massive 75%, to 7 016 units.

Other SSA markets are expected to reach a combined total of 5 500 units.

Schulz says the Ugandan market is stabilising after an election, with Angola to benefit from an uptick in the oil price.

The healthy growth expected in the expanding Kenyan market has prompted UDTSA to set up an assembly facility in the East African market, says Schulz.

This year will also see UDTSA’s parent company, the Volvo Group, from Sweden, invest in the modernisation of UDTSA’s Rosslyn assembly plant, in Pretoria. Volvo Group president Martin Lundstedt announced the investment in a visit to the facility earlier in January.

The Volvo Group in South Africa consists of Renault Trucks, Volvo Trucks and UDTSA, with Indian brand Eicher soon to be added to the equation.

Eicher will be a standalone brand in South Africa, says Schulz. The company has already appointed some dealers as it starts to roll out its footprint in the region.

Schulz says UDTSA will stage a strong comeback in 2017 and onwards, mainly through new product introductions – also in the medium truck segment, where the brand has been conspicuously absent in 2016.

UDTSA’s total market share has dropped from 16% in 2009, to 8.9% in 2016.

“It may take us one or two or three years, but we are definitely going to come back,” says UDTSA acting VP Gert Swanepoel. “We are excited, we have a lot more product coming.”

 

Edited by Creamer Media Reporter

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