Daimler Trucks & Buses South Africa (DTBSA) is “strongly opposed” to the delayed introduction of cleaner fuels into the country, says DTBSA MD Kobus van Zyl.

“We are deeply disappointed.”

The South African Petroleum Industry Association (Sapia) confirmed in May that government had communicated a delay to the July 1, 2017, compliance date for the introduction of new cleaner-fuels standards, owing to a lack of finality relating to the cost-recovery mechanism.

However, details of a new deadline have not yet been made known, despite some reports suggesting a shift to 2020.

“We were informed by the Department of Energy (DoE) in February that the July 2017 deadline is off the table. “[The] DoE will initiate a process of setting up new timelines,” said Sapia executive director Avhapfani Tshifularo in an interview with Engineering News.

Sapia, which represents domestic liquid fuels producers, stressed that it had not requested the delay. However, Tshifularo acknowledged that some of its members had informed the DoE of their inability to meet the gazetted deadline.

The amendments to the regulations regarding petroleum products envisage the domestic upgrade to a Euro V-type specification level. The upgrade is being pursued under the so-called ‘Clean Fuel 2’ banner, with an earlier cleaner-fuels initiative having raised fuel specifications levels to the Euro II-type level as from 2008.

The proposed improvement from current specifications is expected to involve a collective investment by petroleum companies of around R40-billion.

Automotive companies argue that cleaner fuel is required for modern, more fuel-efficient cars and trucks.

Current high sulphur levels are seen as the main problem with South African-produced fuels, with the Clean Fuels 2 programme designed to reduce this to ten parts per million (ppm) in diesel, or less.

The delay means that DTBSA, which forms part of Mercedes-Benz South Africa, remains unable to bring new-technology trucks into the South African market, says Van Zyl. These products offer lower life-cycle costs and improved safety features, while also using less fuel.

“It is unfair towards our costumers that we cannot bring these products to South Africa. “We will continue to work with all the stakeholders involved to introduce cleaner fuels into the country as soon as possible. It is unfortunate that we may be the last country in Southern Africa to introduce fuels of this specification.”

The delayed introduction of clean fuels will, however, not hamper DTBSA in introducing new technologies and innovations where possible, notes Van Zyl.

“We are able to introduce Euro V trucks in South Africa in partnership with the client.”

Cleaner diesel – 10 and 50 ppm diesel – is available in South Africa, but not at every pump.

More Worried than Bullish on 2015
The domestic passenger car market is in negative territory year to date, but the commercial vehicle market is “surprisingly strong”, says Van Zyl.

The year-to-end-May medium truck market is down 3.7%, compared with the same period last year, but the heavy truck market is up 0.5%, while the extra-heavy truck market has increased by 6.8%.

Van Zyl believes the replacement cycle is continuing, with new sales replacing trucks sold during the boom years seen six . . . seven years ago.

However, market expansion is also playing a role, says Van Zyl.

“We see some expansion on the construction side, especially in KwaZulu-Natal.”

It is too early to say what the effect of the prolonged platinum strike will be on the truck industry, he adds.

“We understand that many trucks are standing, and that several businesses downstream from platinum mining have closed their doors. We believe we will see the effect only in the second half of the year.”

Van Zyl believes the local truck market will end the year slightly up on 2013 sales.

However, South Africa’s recent downgrading by international agencies, as well as recent and expected labour action, will take its toll.

“I’m a compulsive optimist, but I am more worried than optimistic about the 2015 truck market. “But we will see how the rest of the year develops.”

DTBSA has seen its sales volumes in the extra-heavy and heavy truck segments increase by 17% year-to-end-May, with market share up 2.9%.

DTBSA brand Fuso has increased its sales in the heavy truck market by 81%, with market share up 4.6%.

Fuso sales in the medium truck market are up 6%, with market share up 0.5%.

Van Zyl says this “very resilient brand” has made a comeback after difficulties in Fuso’s home market, Japan, where it faced the aftermath of a tsunami.

MBSA has also streamlined call centre activities for its Fuso, Mercedes-Benz and Freightliner brands, instead of attempting to provide three distinctly different customer experiences. This had benefits for Fuso sales.

“We now provide a DTBSA experience,” says Van Zyl.

Freightliner sales in the extra-heavy truck market have taken a bit of a knock this year, with sales down 3.4%, and market share down 1.1%.

Van Zyl attributes this to the rand weakening sharply against the dollar, leading to price increases on the US brand.

The South African bus market has grown 16% year-to-end-May, with DTBSA bus volumes up 52%, and the company’s market share up 5.3%.

DTBSA will start delivery of 88 buses to the city of George, in the Western Cape, in the second half of the year.