Van market retreats as economy takes toll on small businesses, households

17th October 2017

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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The total South African new van market currently ranges between 19 000 and 20 000 units a year, estimates Mercedes-Benz Vans Southern Africa VP Nadia Trimmel.

“Historically, the market used to be between 22 000 and 23 000 units, but this year we do not expect it to break 20 000. The general feeling is that the van market will be slightly down this year on last year, while we expect our sales to remain stable. The new V-Class is doing well for us, as there is no real competitor in this segment,” says Trimmel.


“If you exclude the minibus taxi market, the van market is between 4 000 and 5 000 units a year.”

South African total new-vehicle sales are expected to gain around 1.5% this year on last year’s numbers.

The mid-size van market is taking particular strain, notes Trimmel. Sales of the Mercedes-Benz Vito have been affected owing to customers, such as small businesses, shuttle owners and tourism operators, prolonging the replacement cycle.

Private Vito customers are also facing increased pressure on their disposable income.

The Vito is available as a panel van, Tourer (people carrier) and Mixto, or crewcab.

Good news for Mercedes-Benz Vans Southern Africa is that the premium V-Class van has, to date, experienced a good year on showroom floors, with private buyers at the top-end of the market seemingly less affected by tough conditions in the domestic economy.

While competition in the mid-sized van segment is to remain relatively stable at five competitors, the large van segment, where the Mercedes-Benz Sprinter competes, could face additional competition from a MAN van, expected to launch, along with a range of medium-duty trucks, in the next two years.

Trimmel is confident, however, that the Sprinter will continue its dominance of the long-haul taxi market.

Last year the company had a market share of just under 50% in this segment of the market.

The Sprinter also finds customers in the logistics, tourism and business markets.

Trimmel says that between 60% and 65% of Sprinter sales in 2016 were in the taxi market.

A Sprinter with a larger payload of 5.5 t was introduced last year.

Trimmel says Mercedes-Benz South Africa (MBSA) provides finance to qualifying taxi buyers, at prime rate.

The Sprinter taxi seats 22 people, excluding the driver.

Sprinter sales made up around 50% of Mercedes-Benz Vans Southern Africa sales in 2016, with the V-Class an estimated 30% and the Vito 20% of sales.

Trimmel cannot provide detailed Mercedes-Benz sales numbers, as MBSA does not report monthly sales by segment.

New X-Class
Mercedes-Benz Vans Southern Africa will take responsibility for the sale of the new X-Class pick-up in the local market.

The X-Class double cab is expected to launch in South Africa in the second quarter of 2018. There is currently no development plan for a single-cab X-Class workhorse, says Trimmel.

The X-Class will go on sale through the MBSA passenger dealer network, but it may also be possible for selected commercial vehicle dealers to feature the vehicle on their showroom floors.

“The vans business provides a comfortable fit to the X-Class as there is a similar overlap between business and private use,” notes Trimmel.

Edited by Creamer Media Reporter

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