Capital Equipment News February 2018

T he South African truck market 25 042 total units sold compared with the previous year, according to official market figures from the National Association of Automobile Manufacturers of South Africa, Associate Motor Holdings and Amalgamated Automobile Distributors. The downward trend is showing no signs of abating. In 2016, the commercial vehicle market totalled 27 010 unit sales, which represented a 11,4% decline compared with 2015. The 2017 decline means that the South African truck market endured a third successive year of negative growth, but more worrying is that the total figure is the lowest in seven years. In a year that kicked off with some high expectations – with a 3% market growth predicted at the start of 2017 – political instability, the incessant credit rating downgrades and low business confidence, among other factors, reigned supreme to outweigh potential commodity price recovery gains, thereby negatively impacting the performance of the commercial vehicle market at large. Gert Swanepoel, MD of UD Trucks Southern Africa, says the lack of growth in the South African economy also continued to negatively impact the local truck market. However, Rory Schulz, marketing director at UD Trucks Southern Africa, predicts that the market will see some growth this year, but a tiny 1,5% increase is expected. This is largely based on the fact that the market has shown some signs of growth in late 2017 already. “In 2017, African economies showed promising recoveries and we expect the trend to continue in a positive direction this year,” says Schulz. Swanepoel adds that the Gross Fixed Capital Formation or the rate at which businesses add fixed assets such as endured yet another difficult year in 2017, going down 2,65% to

plant, machinery and equipment to their inventories, has seen an upturn to 4,3% during the third quarter of 2017, with 37% attributed to the acquisition of new transport equipment, which is a very good sign for the truck industry. Market figures The Extra Heavy Commercial Vehicle (EHCV) segment recorded the only increase in unit sales year-on-year, by a marginal 0,96%, with a total of 11 967 units sold. Mercedes-Benz topped the charts with a total of 3 195 units sold, representing 25,28% of the total market, followed by Scania in second position with a total of 2 180 units sold, translating to 17,25% of the market share. Volvo Trucks was in third position with 2 022 units (16% of the market), followed by MAN with 1 398 units (11,06%) and UD Trucks in fifth position with a total of 1 167 units sold, representing a 9,24% share of the EHCV market. The Heavy Commercial Vehicle (HCV) market went down 4,76% to 5 290 units. Japanese manufacturers dominated the segment, with Isuzu coming out tops with a total of 1 465 units, followed by UD Trucks with 1 065 units and Hino with 910 total unit sales. FAW came in at number four in the HCV segment with a total of 760 units, and Fuso completed the top five rankings with 418 units. The Medium Commercial Vehicle market was also in the red, declining 6,37% year- on-year to 7 785 total unit sales. Isuzu also recorded most sales in this market segment with a total of 2 161 units, representing 27,37% of the share of the market. Hino was in second position with a total of 1 775 units, followed by Mercedes-Benz with 1 238 unit sales. Iveco and Fuso came up in fourth and fifth positions, with a total of 820 and 620 units, respectively. When it comes to exports (sales of vehicles manufactured in South Africa and sold to other countries), total export sales were also in the red, going down 5,54% to 946 unit sales compared with 2016. Schulz says the MCV segment was the hardest hit with a 41,92% decline to only 115 units. The HCV saw a 25,58% increase to 162 units, while the EHCV slightly declined by 0,59% to 669 units. UD gains ground Despite the tough market conditions, UD Trucks gained some ground in the HCV segment in 2017, largely buoyed by the launch of its Croner range in June. According to Paul Uys, sales director at UD Trucks Southern Africa, the company claimed second position in this market

KEY TALKING POINTS

“In South Africa we are forecasting a slight 1,5% growth in sales during the year to come, for a total truck market of an estimated 25 418 new units.” Gert Swanepoel, MD of UD Trucks Southern Africa,

“In 2017, African economies showed promising recoveries and we expect the trend to continue in a positive direction this year.” Rory Schulz, marketing director at UD Trucks Southern Africa

CAPITAL EQUIPMENT NEWS FEBRUARY 2018 21