New truck sales could rise in 2017 – Naamsa

Hope for new truck sales

The December 2016 new light commercial vehicle market reflected a year-on-year volume change of -17.8%, while sales of medium and heavy commercial vehicles declined by 18.2% year-on-year.

This is according to the National Association of Automobile Manufacturer’s of South Africa (NAAMSA).

Overall, new vehicle sales during 2016 in South Africa recorded a year-on-year decline for the third consecutive year.

Annual aggregate annual new truck sales by sector, since 2010:

2010 2011 2012 2013 2014 2015 2016 2016/2015 % Change
Light Commercials 133 756 149 301 160 174 167 996 173 759 174 701 159 128 -12.4%
Medium Commercials 7 557 9 218 10 104 11 584 11 024 10 394 8 447 -18.7%
Heavy trucks & Buses 14 464 17 438 17 737 19 340 20 534 20 075 18 594 -7.4%
Total 155 777 175 957 188 015 198 920 205 317 205 170 186 169 -12.8%

South Africa’s GDP growth for 2017 is currently pegged at 1.5% (up from 0.4% in 2016). Gross domestic expenditure could rise to over 2.0% (from -0.3% in 2016), while fixed investment could move up to around 2.2% (from -2.5% in 2016).

Recommended: Isuzu Trucks hopeful of better 2017

The improvement in growth prospects is premised, however, on the easing of drought conditions, an improvement in commodity prices, a decline in inflationary pressures on the back of a stronger rand, and improvements in the Purchasing Managers’ indexes and Reserve Bank’s leading indicators.

2016 industry export sales, compared to the previous six years:

2010 2011 2012 2013 2014 2015 2016 2016/2015 % Change
Light Commercials 56 950 84 125 123 648 121 653 118 922 103 000 105 152 2.1%
Trucks & Buses 861 803 1 076 1 206 1 414 1 124 1 103 -1.9
Total 57 811 84 928 124 724 122 859 120 336 104 124 106 255 0.2%

However, elevated political tensions are likely to continue to weigh on business confidence and the expected increase in taxes in this years’ budget will erode real purchasing power.

The outlook for 2017 in terms of new truck sales, by sector:

Sector 2015 2016 2017 Projected
Light Commercials 174 701 159 128 163 000
Medium Commercials 10 394 8 447 9 000
Heavy, Extra Heavy Commercials & Buses 20 075 18 594 19 000
Total 205 170 186 169 191 000

Internationally, volatile and uncertain conditions are likely to prevail during 2017. Elevated geo-political tensions and political uncertainty in major advanced economies associated with elections could heighten global risk aversion and trigger confidence shocks.

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