Fleets buy down as economy struggles

Despite gains in the market in some commercial vehicle segments, tough trading months are set to persist, says Gert Swanepoel, managing director of UD Trucks Southern Africa

Even though South Africa’s struggling economy is continuing to have an impact on the local commercial vehicle industry, the sector showed year-on-year growth of 3,1 percent in new unit sales at the end of October.

According to latest results released by the National Association of Automobile Manufacturers of South Africa (Naamsa), Associated Motor Holdings (AMH) and Amalgamated Automobile Distributors (AAD), 23 190 new trucks and buses have been sold so far in 2019.

Compared with last year’s statistics for the first 10 months of the year, sales in the medium commercial vehicle (MCV) sector have increased by a 12 percent to 7 270 units, while heavy commercial vehicle (HCV) sales have dropped by 7,7 percent, registering 4 190 units.

Extra-heavy commercial (EHCV) sales have climbed, racking up 11 039 units – a 4,6-percent increase over 2018’s figure.  Bus sales have remained negative, with only 691 units sold since January – a decline of 23 percent compared with last year’s figure.

“For the past few months we have seen a buying pattern emerge among fleet owners,” says Gert Swanepoel, managing director of UD Trucks Southern Africa. “They are buying down into smaller, less expensive, vehicle segments, largely due to the country’s challenging economic conditions.”

He attributes growth in the EHCV segment to a need to move bulk goods and commodities.  “Perhaps there is an underlying sense of resilience in the market – which would represent the positive takeaway from the latest statistics – but the industry should ensure that it is prepared for some tough trading months ahead,” he warns.