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2018 – What will happen to trucks & buses?

Apr 19, 2018 Trucks, Truck Sales, forecast, commercial vehicles, economy, automotive, aftermarket, trucking, Dave Scott



Dave Scott

The forecast drives the system – too much optimism leads to grass growing through wheels in stockyards while too much pessimism creates long delivery lead times and even losses in market share.

It’s ‘said’ in the marketplace that an annual truck and bus market of 35,000 units is a sweet-spot for current players. So how did the truck and bus market perform in 2017?


The market did not ‘flatline’ as many had expected but declined by 3.2% for a total 26,172 – well off the 35,000 sweet-spot.  

Breaking this down into NAAMSA market segments above shows that the medium truck market took the biggest hit and declined by 662 units or 7,8%. This is the consumer and services driven market sector and is indicative of the general strain in the economy – especially the exchange rate which has impacted on a soft Rand’s ability to cope with imported goods. Dividing the medium segment into applications it is interesting to note the decline in panel vans and midi buses up to 8,500kg GVM.

 

There are 22 truck brands from seven different countries in the SA market all hoping for the economy to annually produce 35,000 truck and bus retail figures. But, and that’s a big ‘but’, because only six truck brands owned 69% of the 2017 truck and bus market:

This leaves only 8,000 odd units for the remaining 16 players – a tough scene indeed.

“With recent political changes in mind, we are hopeful that business confidence will return to more positive levels, which will certainly encourage businesses to invest in their fleets,” said Gert Swanepoel, Managing Director of UD Trucks Southern Africa. “Gross Fixed Capital Formation or the rate at which businesses add fixed assets such as 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 – certainly a good sign for the truck industry.”


Confidence is what inspires an investment in trucks. ESKOM is in dire financial straits and eight years of corruption will not be reversed overnight however well-meaning our politicians express the desire for change. Other parastatals are also thirsty for big bailout funding. And then there’s that drought which has reached disastrous proportions in the Western Cape, South Africa’s third largest truck market. World stock markets are volatile and roiling in the background – all of this does not translate into rapid turnaround for SA’s truck and bus market.

 The Rand has strengthened and some rain is fallen beyond the borders of the Western Cape. So, let’s not be totally negative. The best we can probably hope for is another flat performance of 26,000 units in 2018. The challenge is not in the total numbers but the massive variety of vehicle applications that make up our ‘small’ market, from a 4-ton GVM freight carrier up to a 56-ton GCM vehicle combination. As someone once said, ‘boldness be my friend’. The final profound thought goes to Nobel Prize Winner for literature, John Galsworthy – “If you do not think about the future you cannot have one.”

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