Capital Equipment News February 2017

BUSINESS

Top 5 – Including Van and Bus

Total Market Segmentation

Long Term Truck Market Forecast

and are not dedicated to Isuzu Trucks only. SA truck market dynamics Reflecting on a difficult year for the South African truck industry at large, Uren says several factors joined forces for the demise of the market. He reasons that the economy gauntlet

elections impacted on businesses’ capacity to make decisions. Because of the uncertainty, businesses ought to take a wait-and-see approach,” reasons Uren. Pricing rates, which went up 10-15%, impacted on fleet operators’ spending power. The MCV segment was the hardest hit with a -18,9% decline from 10 394 units in 2015 to 8 432 in 2016. Bearing in mind that this market segment is mostly sustained by small, upcoming businesses, Uren is of the view that smaller businesses are finding it harder to survive in current economic conditions, and most small transport companies are going under. It is only the bigger commercial vehicle operators with enough capital to carry them through the economic storm. Despite all the 2016 troubles, Uren somehow feels that 2017 might turn out to be a good year for South Africa. However, he believes that the outlook is not very positive for the truck market, which he expects to grow at a marginal 2-3%. “The fundamentals of economics, with GDP expected to grow a modest 1%, are weighing heavily against any form of big growth for the truck industry,” says Uren. He believes the market will hover around the 28 000 unit mark, falling short of the 30 000 plus mark, which he believes is South African truck market’s “sweet spot”. b

for further growth. The addition of other business divisions to our portfolio – Isuzu Trucks Drivetrain, Isuzu Trucks Mobility, Isuzu Trucks Genuine Parts and Kanu Commercial Body Construction – gives us the edge to be a one-stop shop for our customers’ needs, while being able to customise our solutions in the process,” says Uren. For example, the acquisition of Port Elizabeth based Kanu Commercial Body Construction affords ITSA to do away with long lead times and deliver ready-built trucks to its dealer network. Meanwhile, ITSA’s chassis modifications are done locally by Automotive Chassis Technologies (ACT). Both Kanu and ACT service the local truck fraternity

was the major setback for the truck industry last year, with both worldwide and local economic pressures impacting on South Africa. GDP was under pressure, failing to breach the 1% mark. Low business confidence resulted in low to no investment by business. “2016 also started on a poor basis because of the poor exchange rate,” says Uren. “It was also a year of contradicting fortunes. We started the year trying to understand the impact of the drought and ended it with flash floods. This had a vast impact on agriculture, which is likely to take years to recover.” Municipal elections also had their fair share of 2016’s market pressures. “Municipal

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