Used, but still useful

Times are tough in today’s economic climate, which is putting a strain on all. Transport operators and mobility providers could have an ace up their sleeves, however, in the form of used vehicles…

The used trucks market in Africa is projected to grow at a compound annual growth rate of 5.6% between 2022 and 2027, according to consulting, data analytics, and market research firm MarkNtel Advisors, which provides an extensive range of strategic reports.

The company notes that this market growth is primarily driven by various ongoing and upcoming construction projects in different countries across Africa, due to the increasing  governmental focus on infrastructural developments across the residential, commercial, industrial, healthcare, and educational sectors. “Of all countries in Africa, South Africa dominated the market with the largest share, and the same trend is projected during 2022-27,” MarkNtel highlights in its report: “Africa Used Trucks Market Research Report: Forecast (2022-2027).”

“South Africa is the largest contributor to Africa’s commercial vehicle [sector], with massive domestic manufacturing that plays a crucial role in providing both new and used vehicles and driving the used trucks market,” says the report.

It adds that the prevalence of used trucks being utilised on a rental basis is an emerging trend in South Africa, which also increases overall market growth. “In addition, the extensive presence of aftermarket [support] throughout the country offers an easy availability for repair and replacement services – another crucial aspect encouraging the sale of used trucks and projecting lucrative growth prospects for the used trucks market across South Africa through 2027,” it continues.

The transport industry offers more than just the movement of goods, however, as highlighted by the World Economic Forum’s (WEF’s) article, “How used car exports to Africa could become the development opportunity of the decade”.

“In areas where government budgets for public transport infrastructure and operations are limited, the ability to move people and goods depends on the availability of affordable vehicles. Motorised transport is thus a lifeline, providing access to health services, to education and work, and to new opportunities,” expands the WEF piece.

“While individual mobility is mostly covered with two- and three-wheelers in large parts of low- and medium-income countries (LMICs), cars and vans, especially as taxis and other communal modes of transport, help offer mobility – and, with it, social mobility,” it continues.

The international non-governmental organisation adds that high-quality used vehicles imported into LMICs could therefore be (and already are) an opportunity for such countries. However, the costs are becoming evermore visible: carbon emissions and air pollutants are on the increase, respiratory health conditions are on the rise, and roads are unsafe.

“While many developed markets are aligned on decarbonisation of [vehicles] in the next 10 to 15 years, a truly just net zero transition requires accountability for the outdated carpool that LMICs are left with. And without decarbonisation of road transport everywhere, such a transition is impossible,” the report stresses.

Dr Young Tae Kim, secretary-general of the International Transport Forum (ITF), adds: “Getting more and more electric vehicles on the roads is critical to get to reach net-zero transport emissions quickly. This transition must happen around the globe. Less-developed regions must not become dumping grounds for unwanted, polluting used vehicles. Preparing emerging economies to go electric will require international collaboration. ITF research on used car exports will help guide policy-makers to address the issue.”

As the WEF highlights in its piece, this is especially true without a proper system in place to recollect and recycle vehicles at their ultimate end of life. “Valuable resources are lost and severe pollution issues arise – most notably the terrible burden on up to 800 million children through lead poisoning, caused especially from ill-managed vehicle lead acid batteries,” it explains.

These are dire straits for Africa, as the continent is the ultimate destination for some 40% of used light-duty vehicles. “Central Asia receives another sizable chunk. Half of these cars do not meet the fuel economy, exhaust emissions, and safety standards imposed by their original home countries today,” the WEF reports.

“Kept in use, they become a major source of particulate matter and nitrogen oxides. These pollutants exacerbate because fuel quality poured into these old engines is unregulated and, hence, poor,” it continues. “Conversely, poor fuels pose a challenge for more modern vehicles, so both issues need addressing simultaneously. The result is deadly for the many families practically living alongside roadways, as alerted by the World Health Organization.”

These used “grey imports” – vehicles brought into a country via non-standard channels other than the manufacturer or official distributor – aren’t such a great threat in South Africa because they are banned, although new ones can be sold legally. “In most cases, grey imports are 100% above board, as long as they abide by the rules of the Consumer Ombudsman,” explains Jean-Clay van Heerden, GM of customer relations and sales at Eqstra Fleet Management. 

In his piece “Are grey imports impacting the local fleet industry?” he addresses this question. “Fleet managers know what it really costs to run a fleet and try to avoid hidden costs wherever possible. One of the biggest concerns for fleet owners and managers is excessive vehicle downtime, and with grey imports your risk of downtime due to poor quality or scrambling for parts is simply too risky,” notes Van Heerden. “A fleet of grey imports will end up costing companies a lot more in the long run and they prefer to spend more for good quality and reliable service.”

He adds that all government and corporate fleets consist of vehicles purchased directly from the manufacturer or their official dealers, pointing out: “South Africa has a sophisticated fleet industry, and few companies are willing to risk putting grey imports onto the fleet.”

This doesn’t mean that all second-hand vehicles are off the table. “Answering, ‘Should I buy a used truck?’ often comes down to the value of a purchase compared to its expected lifespan,” explains Truck Ranch – an independent US-based automotive group specialising in trucks.

“Thanks to vast improvements in engineering and regular maintenance techniques over the last couple of decades, you can expect to get much more than a few years out of a used truck. However, there are a number of answers to ‘Why buy a used truck?’,” it elaborates.

Initial depreciation: A new truck loses a significant portion of its value as soon as it’s driven off the lot. This initial depreciation is steep, but it means that with a couple years under its belt, you can obtain it with little wear for just a fraction of the price.

Improved selection: Although new trucks do their best to offer a wide range of trim levels and configurations, ultimately, they are limited by what a single year of production allows. With used trucks, you can choose from a much greater selection of engines, body configurations, and more.

Customisation: Thanks to a lower price, operators choosing a used truck will have more funds available for customisation.

So, in these trying times, a used vehicle could be the perfect ace up the sleeve for transport operators and mobility providers looking to replace current vehicles, expand their fleet, or get started in this game. These units might be used, but they can still be useful.