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Isuzu consolidates truck assembly at PE plant

GROWING MARKET Isuzu Trucks expects the local truck market to reach around 30 000 units this year

GROWING MARKET Isuzu Trucks expects the local truck market to reach around 30 000 units this year

Photo by Duane Daws

29th November 2013

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Isuzu Trucks South Africa (ITSA) spent the last six to eight months overhauling its production line at General Motors South Africa’s (GMSA’s) Kempston Road plant, in Port Elizabeth.

Chief operating officer Craig Uren says this move consolidates the truck assembler’s previous scattered operations under one roof, “with a marked improvement in efficiency”.

“We have increased our capacity and efficiency by just on 40% over the last 12 to 18 months, with the same workforce and help from a Japanese production engineer.”

The Japanese production engineer comes courtesy of a recent shift in shareholding at ITSA, with the previous 50/50 share- holding between Isuzu Motors and GMSA moving to a 70/30 split in favour of the Japanese truck maker.

The majority shareholding allows ITSA to have two more Isuzu executives at the company, allocated to production and finance.

Uren says production on the ITSA assembly line numbered 250 units a month in 2012, improving to 270 a month between January and June this year, and to 350 units a month from July onwards.

Next year, he expects this figure to increase to 400 units a month.

Uren says the recent seven-week strike in the automotive industry had little effect on ITSA production, as the company assembled trucks ahead of time, in anticipation of the labour action.

“We were down for two weeks, so there were no big problems in terms of availability on our side.”

ITSA expects the local truck market to reach around 30 000 units this year, up from 27 296 units in 2012.

Uren expects the truck market to be closer to 35 000 units in 2016, from a market that came in under 20 000 units in 2009, after a blistering 2007 and 2008, with sales levels at around 35 000 units a year.

“It is not a bad industy to be in. The South African and Australian markets on commercial trucks are pretty similar.”

Uren says the 2006 to 2008 period reveals that the South African truck market is “slap-bang in the middle of a replacement cycle – there is no real market other than this”.

The average life of a truck in South Africa is seven to eight years.

He adds that a buy-down trend has become evident in the local truck market, with customers opting for cheaper, smaller trucks, while there is also an ever-increasing focus on reducing cents-per-kilometre costs.

The South African medium commercial vehicle market, for example, currently makes up 37% of the truck market, up from 35% in 2012, and is growing at the expense of the light-heavy truck segment, notes Uren.

ITSA currently has a 12.4% share in the local truck market, up from 2012’s 11.4% and 2011’s 10.5%.

ITSA sold 3 136 units in 2012, with Uren expecting to move around 3 600 units in 2013 – the company’s biggest year yet.

Part of this growth comes from ITSA moving into more rural areas, following commodity operations.

Rustenburg will, for example, see a new ITSA dealership come on stream in 2014.


Isuzu’s N-Series has been expanded with the addition of the NMR 250 automated manual transmission (AMT) model in October.

ITSA national sales and distribution manager Anton du Plessis says an AMT model reduces running costs as it does not have a clutch pedal or clutch plate, often an expensive maintenance item, while the vehicle also automatically selects the best gear for optimum fuel use.

He says the NMR 250 caters for the current buy-down trend in the market, from three tonners to 2.5 tonners.

Du Plessis regards the NMR 250 as a competent competitor against panel vans and bakkies, on both price and running cost.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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