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TRUCK INDUSTRY
Truck sales on the mend as replacement cycle kicks in – MAN
 
9th September 2010
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The sale of new heavy trucks almost doubled during August, soaring by 92,9% compared with August last year, with extra-heavy trucks also putting in a sterling performance, growing by 44,3%.

This healthy turnaround in the truck market, which performed rather dismally up to August, can be attributed largely to the replacement cycle coming into play, and not fresh demand for product, says MAN Truck and Bus South Africa truck sales (Africa) management board member Johan Cloete.

The South African truck market broke through the 37 000 unit barrier in 2007, recording its best sales performance ever – building on a healthy 2006 sales year – before declining as the global recession decimated local demand.

Many of the trucks acquired three, four years ago now have to be replaced.

“We have been receiving a lot of enquiries from professional hauliers, companies which were holding out to replace their trucks, but which have to do so now as it no longer makes economic sense to run these units,” notes Cloete.

“We have seen some big orders from companies, at a 100, 150 trucks.”

He adds that truck demand in the construction industry remains stagnant, with mostly the long-haul carriers participating in the new-buy market.

Cloete says clear evidence of the replacement cycle lies in the fact that around 80% of the queries for new trucks at MAN involves trade-ins.

“There is not a lot of fleet expansion going on.”

This high percentage of trade-in deals is now, however, placing a small degree of negative pressure on the new truck market.

“You can get some good deals in the second-hand market right now,” says Cloete.

Hino South Africa vice-president Dr Casper Kruger notes that the month of August was “particularly significant for the South African truck market”, in that it marked the end of an extended period when Soccer World Cup 2010 exerted a direct, or indirect, influence on its performance.

“Last month was totally devoid of such influence, and can thus be regarded as the start of a new era of normality for truck, bus and van sales in South Africa. Under these circumstances, the excellent result obtained in August was particularly pleasing, and augurs well for selling conditions through the remainder of the year.”

Edited by: Creamer Media Reporter
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