CAPITAL EQUIPMENT NEWS
FEBRUARY 2017
6
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
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.”
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
.
With its move to a brand-based organisation,
UD Trucks expects better growth in 2017.
Rory Schulz, marketing director at UD Trucks
Southern Africa, expects the South African
commercial vehicle market to remain flat in 2017.