South African Truck Market Expecting a Slight Increase in 2018

The South African truck market is expecting a slight increase in 2018 sales due to lack of growth in the local economy which continues to negatively impact the local truck market.

During 2017 the South African truck market declined by 2.65 percent on the previous year’s results to 25,042 new units sold.

This is according to the latest results released by the National Association of automobile manufacturers of South Africa (Naamsa), Associated motor holdings (AMH) and Amalgamated automobile distributors (AAD).

The extra heavy commercial vehicle segment recorded the only increase in sales year-on-year, by only 0.96 percent, concluding 2017 on 11,967 units.

Sales in the heavy commercial vehicle segment were down by 4.76 percent to 5,290 units, while a 6.37 percent decline in sales was recorded in the medium commercial vehicle segment, to a final figure of 7,785 units at the end of 2017.

Managing director of UD Trucks Southern Africa, Gert Swanepoel said the lack of growth in the local economy has continued to negatively impact the local truck market.

“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 Swanepoel.

“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 percent during the third quarter of 2017, with 37 percent attributed to the acquisition of new transport equipment, certainly a good sign for the truck industry.”

Looking at truck sales from South Africa to other countries, total export sales from South Africa declined 5.54 percent to 946 units when compared to 2016’s results.

In the heavy commercial vehicle segment, there was a significant increase of 25.58 percent in sales to 162 units. However extra heavies declined by 0.59 percent to 669 units, while medium commercials took a heavy knock of 41.92 percent to sell only 115 units.

“We are expecting sales in the export countries to increase during 2018, forecasting growth across all segments for a total sales estimate of around 990 units,” said Swanepoel.

“Locally, we are forecasting a slight 1.5 percent growth in sales during the year to come, for a total truck market of an estimated 25,418 new units.”

To gain even more traction in the Eastern African markets, UD Trucks has secured a new partner in Kenya to establish a CKD (Completely Knocked Down) assembly facility, which will include the production of UD Trucks units.

“Due to local Kenyan regulations, a CKD plant is key to any success in that market. We already have a product plan in place, and believe that UD Trucks line-up will be ideally suited to local road and operating conditions,” Swanepoel said.

During 2017, UD Trucks also invested R30 million in the modernisation of its Rosslyn assembly plant to mirror the company’s Ageo plant in Japan. Further investments will continue in 2018.

“A lot of emphases was placed on real estate, tooling, and equipment, as well as acquiring new jigs, fixtures and implementing a new material supply system,” said Aubrey Rambau, director of manufacturing at the UD Trucks Assembly Plant in Rosslyn.

“Apart from gearing up for an extended UD Trucks model line-up over the medium term, we are also focusing on enriching the competence of our staff through various skills transfer programmes with Japan, as well as assembler development programmes.”

Last year, UD Trucks Southern Africa also trained 1,247 dealers and customer staff at its competence development centre in Rosslyn, including 92 diesel mechanic apprentices, a highly sought-after skill in the transport industry.

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