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Best month for extra heavy commercial vehicles
This could indicate that the South African market for commercial vehicles over 3500kg gross vehicle mass has now finally bottomed out:
• 551 medium commercial vehicles (3501kg - 8500kg)
• 300 heavy commercials (8501kg - 16500kg)
• 678 extra heavy commercials (+16500kg)
• 64 passenger buses +8500kg
• maximum payload XHCV sales up 27.2% in the month-on-month comparison with August 2009
• cruiserweight HCV segment volume increased by 6.4%
• entry-level MCV sales up by 2%
• Bus sales less than half of the volume reported in August
Casper Kruger, GM of Hino South Africa, comments: “Following the disappointing result in August, it was encouraging to see the truck market re-entering a consolidation phase in September. The substantial upturn in XHCV sales was particularly pleasing, as it was broadly spread across most of the main participants in this segment, and was not limited to those brands that have been supporting their marketing efforts with in-house financing. The MCV and HCV segments exhibited stability.
“The poor bus sales were a reflection of a temporarily depleted supply pipeline and did not accurately reflect the strength of this segment. We estimate that South Africa's bus suppliers have combined firm orders totalling more than 800 units, most of which will need to be delivered before the middle of 2010, so medium-term prospects for this segment remain favourable.”
“Looking ahead, expectations of a significant further improvement in truck sales volumes in the remaining months of 2009 are possibly unrealistic, given that local transport operators may wish to see tangible evidence of an economic recovery before committing to fleet replenishment or expansion.”
“However, prospects for such an upturn have recently improved, with a substantially more optimistic report and outlook emerging from the local Kagiso Purchasing Managers' Index at the beginning of October. A 65% month-on-month improvement in South African vehicle exports in September indicates a substantial increase in demand from the global markets that purchase these predominantly light passenger and commercial products.”
Make 2010 purchases now
“It is, however, important that intending commercial vehicle buyers recognise the danger of deferring their purchasing activities for too long. The run-up to Soccer World Cup in mid-2010 is likely to highlight deficiencies in the delivery fleets that will bear the brunt of the increased demand for goods and services that will be generated by the hundreds of thousands of foreign visitors that are expected to arrive during the four-week period from mid-June onwards. Last-minute purchases of urgently needed vehicles are likely to create bottlenecks in the supply and bodybuilding sectors, while panic buying will, inevitably lead to operators being obliged to compromise their fleet standardisation policies, and accept whatever product happens to be available at the time.”
Kruger concludes: “With interest rates now at the expected low point of the current cycle and some apparent relaxation of the financing environment, the time is now particularly opportune for operators to enter a dialogue with their preferred suppliers, and develop a rational plan for vehicle procurement. Vehicle prices are also currently stable due to sustained rand strength against foreign currencies, and more than adequate inventories of product in dealer and manufacturers' yards, but this situation is always subject to rapid change. It is particularly important that dealer networks continue to be sustained during the remainder of the current period of reduced sales volume, so that they are in place to offer the appropriate level of sales, service and parts support to fleets once the increased business levels expected from the beginning of 2010 begin to materialise.”
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