Photo by: Natalie Greve
The domestic new truck market should end 2015 at between 31 000 and 33 000 units, says Isuzu Trucks South Africa (ITSA) COO Craig Uren.
The market will only be able to exceed 31 000 units if “something significant happens”, such as large infrastructure or capital investments in South Africa, he adds.
In other words, until the country sees “significant economic growth”, operators will not invest in growing their vehicle fleets.
“The volumes and loads are not there,” says Uren. “33 000 units can only happen if there is a large windfall of some kind.”
The lower fuel price can benefit the market, but the question is by what margin, he notes. It is already clear that a significantly lower oil price has “taken a lot of heat” off the weak rand in the short term.
However, 31 000 units is “not a bad place to be”, adds Uren. A market of this size is able to sustain the truck assemblers in the local market.
The 2014 truck market expanded by 2% over 2013, to 31 550 units.
A drop of almost 5% in medium commercial vehicle sales in 2014 indicates that small businesses are taking strain, says Uren.
Heavy truck sales were down 2.1%, while the extra-heavy segment grew by 8.7%.
Uren emphasises that the 2% growth in 2014 should not necessarily be viewed as an upwards trend, as almost all of the upswing happened in December.
The year also offered up a list of casualties in the sub-supplier market, especially in terms of component suppliers to truck-body builders, with between 10 and 20 suppliers closing their doors.
This happened on the back of the prolonged mine strikes seen last year, which not only shut down mines, but also many commodity carriers.
Many suppliers could not sustain their business over this period, says Uren.
ITSA sold 4 046 new trucks in 2014, compared with 4 019 units in 2013, placing the local arm of the Japanese truck maker second in the South African new truck market.
Production at the Eastern Cape plant was around 4 200 units in 2014.
“We see 4 000 units as the base we want to grow off into the future,” says Uren.