UD Trucks Southern Africa acting VP Gert Swanepoel.
South Africa’s commercial vehicle industry faces some tough challenges at the halfway mark of 2016, says UD Trucks Southern Africa acting VP Gert Swanepoel.
Sales in the truck industry are closely linked to macroeconomic conditions in South Africa, with both facing an uphill battle to recover.
According to the latest statistics released by the Department of Trade and Industry, new truck sales remain constrained, notes Swanepoel.
A total of 13 046 trucks and buses were sold during the first half of 2016, which was a 9.3% decline compared with the corresponding period last year.
However, it is not all bad news as certain market segments are showing some improvement, says Swanepoel.
“Over the past six months, bus sales managed a 4.6% growth year-on-year to 480 units, which is mostly due to the fulfilment of some key government tenders.
“Sales in the heavy commercial vehicle segment are also almost back on par with 2015’s half-yearly results, showing only a slight 0.8% decline, to 2 319 units.”
However, the medium commercial vehicle segment is down by 19%, to 3 948 units, while extra-heavy commercial vehicles (EHCV) show a decline of 6.7%, to 5 898 units, on a year-to-date basis.
Many sectors in South Africa’s economy, including agriculture, mining and quarrying, have recorded steep contractions this year, and this, combined with low business confidence and economic growth figures, have had an adverse effect – especially on the investment-heavy EHCV segment, says Swanepoel.
On the bright side again, with the rand strengthening against the dollar and a renewed focus on exports into Africa, local truck manufacturers have sold 601 units in markets outside South Africa for the first six months of 2016 – a 76.2% increase.
“As is the case with UD Trucks, manufacturers are investing in the development of its dealer networks along the major trade corridors within the region,” explains Swanepoel.
“The result is increased support and accredited technical assistance for fleet owners who operate across borders in Southern Africa.”
With around twenty different brands selling new trucks in South Africa, competition for the pool of available new-vehicle business in the market is exceptionally tough.
“For potential truck buyers, the decision mainly comes down to which product offers the best value and efficiency per kilometre, as well as the quality of aftermarket support provided by the manufacturer and dealer,” says Swanepoel.