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Commercial vehicle buyers looking for best value, service

15 Jul 2016

SA's commercial vehicle industry is still facing some tough challenges at the halfway mark of 2016. With the industry's growth closely linked to the country's macroeconomic trends, it is following a similarly uphill road to recovery.

Commercial vehicle buyers looking for best value, service

©stocksolutions via 123RF

According to the latest results released by the National Association of Automobile Manufacturers of SA (Naamsa), Associated Motor Holdings (AMH) and Amalgamated Automobile Distributors (AAD), new truck sales remain constrained. A total of 13,046 trucks and buses were sold during the first half of 2016, a 9.3% decline when compared to the corresponding period in 2015. However, according to Gert Swanepoel, acting vice-president of UD Trucks Southern Africa, certain segments are showing some improvement.

"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 tender orders," said Swanepoel. "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."

The medium commercial vehicle (MCV) segment is down by 19% to 3,948 units, while extra-heavy commercial vehicles (EHCV) showed a decline of 6.7% to 5,898 units on a year-to-date basis.

Trade networks

Many of the economy's industry sectors, including agriculture, mining and quarrying, have recorded steep contractions this year and this, combined with low business confidence and GDP figures, has had an adverse effect, especially on the investment-heavy EHCV segment. On the bright side, a lower rand/dollar exchange rate and a renewed focus on exports into Africa has seen local truck manufacturers sell 601 units outside of SA's borders thus far in 2016 - an increase of 76.2% year on year.

"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," said Swanepoel. "The result is increased support and accredited technical assistance for fleet owners who operate across borders in southern Africa."

With 20 different brands reporting into Naamsa, competition is also rife to compete for the available new vehicle sales business in the market. "For potential truck buyers, the decision 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," said Swanepoel.

Sales in the heavy commercial vehicle segment are almost back on par with 2015's half-yearly results.

Source: Business Day

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