Capital Equipment News February 2017

Rory Schulz, marketing director at UD Trucks Southern Africa, expects the South African commercial vehicle market to remain flat in 2017.

With its move to a brand-based organisation, UD Trucks expects better growth in 2017.

TRUCK MARKET ROLLS INTO 2017 IN SLOW GEAR

Following an 11,4% decline of the South African truck market in 2016, UD Trucks Southern Africa expects a marginal 3% growth in 2017 on the back of stabilising commodity prices, slight increase in GDP and growth in fixed investment rate, writes Munesu Shoko .

makers in 2016. “This is the lowest local sales total for commercial vehicles in five years. The decline can be attributed to a slow economy, a lack of business confidence and struggling commodity prices,” he says. 2017 forecast Looking ahead, Schulz expects the South African commercial vehicle market to remain flat in 2017, achieving an estimated 3% growth to around 28 998 unit sales. With fixed investment expected to grow to around 2,2%, up from -2,5% in 2016, Schulz believes this is a good indicator that companies will invest in new capital assets such as trucks. Schulz also believes the projected 1,5% GDP growth in 2017, up from 0,4% in 2016, will further improve growth prospects for the local truck industry. This will be further buoyed by seemingly improving growth prospects premised on easing drought conditions in South Africa. “We also see an improvement in commodity prices and this will definitely help push up truck sales this year,” says Schulz. “We also expect the recent Rand strength to help ease inflationary pressures.”

T he South African commercial vehicle market totalled 27 010 unit sales in 2016, representing a -11,4% decline compared with 2015, according to official figures from the National Association of Automobile Manufacturers of South Africa (Naamsa). The 2016 decline also means that the SA truck market endured a second successive year of negative growth, but more worrying is that the total figure was the lowest in five years, according to Rory Schulz, marketing director at UD Trucks Southern Africa, noting that domestic sales exports also went down 1,9%. With 2016 GDP forecast revised to a low 0,1% growth, Schulz says one should also consider that the local truck market was around 8 000 units

in 1999 when the GDP was last at this low level. All market segments, except for the bus segment, were in the red. The Light Duty Truck (LDT) market led the losses with 8 645 total unit sales, a -18% decline compared with 2015. The Medium Duty Truck (MDT) and Heavy Duty Truck (HDT) segments declined -4,2% and -10,1%, recording 5 589 and 12 583 unit sales, respectively. The Extra Heavy Commercial Vehicle (EHCV) market followed suit with a total of 11 850 units, representing a -10,8% decline compared with the year before. Buses opposed the trend with an 8,2% growth, recording a total of 1 327 unit sales for the year. Schulz explains some of the reasons behind the tough trading conditions for truck

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