Infrastructure Projects Continue to Drive Sale of Extra Heavies

07 July 2014 | Print

“The truck industry is certainly bucking the trend this year,” said Jacques Carelse, managing director of UD Trucks Southern Africa.

Despite persistent unfavourable economic conditions, the South African truck market has once again showed great resilience by logging another positive sales performance last month. In addition, during the first half of the year, the industry has grown by a slight 2.21% compared to the same period last year, to a total of 15 148 units.

According to the latest combined results released by the National Association of Automobile Manufacturers of South Africa (Naamsa), Associated Motor Holdings (AMH) and Amalgamated Automobile Distributors (AAD), a total of 2 911 units was sold during June.  This is a significant 11.49% growth on May 2014’s results, and 4.67% up on June 2013’s total.

“The truck industry is certainly bucking the trend this year,” said Jacques Carelse, managing director of UD Trucks Southern Africa.  “Even though the economic outlook for the rest of the year remains mixed to negative, the truck market is expected to continue to hold up well and report moderate growth figures.”

Carelse said various inflationary pressures, exchange rate vulnerability, labour unrests and slow economic growth, are, however, continuing to put a damper on the potential level of growth within the truck market.

“Proof in point is the decline in sales in the Heavy and Medium Commercial Vehicle segments, which mainly consists of units transporting freight and fast moving consumer goods.  With GDP declining and the country’s general poor economic performance, sales in these segments have already declined by 1.19% and 6.25% respectively this year,” said Carelse.

On the positive side, looking at the remaining segments’ performance on a year-to-date basis, sales in the Bus segment has increased by a significant 15.68% to 568 units as a result of a number of large tenders that have recently been awarded.  Sales in the Extra Heavy Commercial Vehicle segment have noticeably increased by 10.23% to 6 832 units.

“The growth in the EHCV market is mainly due to continued spending on infrastructure-related projects.  Over the past five years, Government’s spending in this regard is estimated at around R1 trillion, and a further R847 billion is budgeted for this aim over the next three years on projects such as mining, agriculture and services,” explained Carelse.  “So truck models that are suited to supporting the development of these infrastructure projects will continue to sell well.”
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