This is according to the latest combined results released by the National Association of Automobile Manufacturers of South Africa (Naamsa), Associated Motor Holdings (AMH) and Amalgamated Automobile Distributors (AAD).
“We are very heartened by the steady growth of the industry during the past six months,” said Jacques Carelse, managing director of UD Trucks Southern Africa. “If the various macroeconomic indicators remain relatively stable throughout the remainder of 2013, the market should be able to reach a forecasted total of around 28 000 units.”
The best performer during the past six months has certainly been the Medium Commercial Vehicle (MCV) segment, which experienced a 10.1% growth during this period, selling a total of 5 625 units.
The Extra Heavy Commercial (EHCV) segment increased sales by 6.4% to 6 200 units, while the so-called bread-and-butter Heavy Commercial Vehicle (HCV) segment concluded the period on 2 528 units, a 6.8% increase in sales.
Bus sales continued to decrease, as expected by 17.5% to conclude the first half of the year on 491 units.
“Bus manufacturers are expected to get some reprieve during the next couple of years as the various Rapid Bus Transit programmes are implemented in some of the larger metropolitan areas,” said Carelse. “As for the rest of the market, rising inflation and a volatile Rand, both of which affect the affordability of trucks, could impact fleet owners’ replacement schedules during the last half of the year.”
Changing market dynamics
Looking at some of the current market dynamics, UD Trucks’ general manager of product planning and marketing, Rory Schulz, said there are numerous new developments that could influence the distribution of sales between the various segments.
“As a company we have always supported Government’s investment in the country’s rail networks, as we believe it forms an integral part of the solution to a better logistics industry, and subsequently to the enhancement of the local economy,” said Schulz. “When it comes to the resulting shift in market dynamics, we estimate that some big volume loads will migrate to 4×2 truck-tractors with semi-trailers instead of interlink combinations.”
He said that the company expects operators will stick to truck-tractor configurations from rail depots to their own distribution houses, where they will break the loads down and use their HCVs to deliver to their customers.
“If the new rail network becomes fully operational, we actually expect more growth in the Heavy Commercial Vehicle segment, and don’t foresee a great change in the dynamics between the MCV and HCV segments,” said Schulz.
UD Trucks believes that low interest rates and a highly competitive trading environment are also encouraging sales across the board.
With such a strong new vehicle market, the demand for used trucks is closely linked to several microeconomic factors. The recent weakening of the Rand could prompt companies to fleet up before some imminent price increases as a result of the frailer exchange rates. If prices do increase, it could subsequently force some fleet owners to turn to the used truck market to get more value for their investment.
“The South African truck market is, of course, highly competitive. At the moment, most OEMs have on-going initiatives to produce lower cost transport solutions for customers. We believe that competition will increase amongst market competitors due to greater product parity, with after sales support and service set to play an increasingly important role in the whole buying cycle,” said Schulz.
The foreseen rise of product from emerging markets is set to have a big impact on both the new and used truck market in South Africa in the near future. This new segment that is currently developing is expected to address requirements from customers for quality, good specification trucks that offer appropriate technology and durability that is suitable to the African continent.
“For fleet owners, the trick is to find that vehicle which is best suited to their business and operating conditions,” concluded Schulz.