First quarter growth despite turbulence

The South African truck market showed ongoing resilience despite recent political and economic events. However, the effect of the downgrade by rating agency Standard and Poor and looming threat of other downgrades of South Africa to sub-investment grade will determine if the small growth built by the industry so far this year will remain or be eroded.

“The next few months will be critical in determining the path we as a country will follow. Leadership in all spheres of business, but mostly in government, will be the key,” says Gert Swanepoel, MD of UD Trucks Southern Africa. “The adage ‘cometh the hour, cometh the man’ – or woman – will be more relevant than ever. A consolidated road freight industry is needed to drive reform and advancement in the sector, as well as in the larger economy.”

The total truck market increased by 16,9% month-on-month, recording 2 618 new truck sales, 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. This brings the market’s year-to-date total to 6 416 new trucks for the first quarter of 2017, a 3,9% increase over the same period last year.

During the first three months of the year, sales in the medium commercial vehicle segment grew by 3,3% to 1 993 units compared to the first quarter of 2016. Sales in the heavy commercial vehicle segment increased by 11,9% to 1 355 units, while the extra heavy segment grew by 2,2% to 2 837 units. The bus segment remained in the red with a 10,5% decline in sales, to a total of 231 new units sold so far this year.

“Even amid all the turbulence, we believe that the dust will settle and the steady slog towards growth in the truck industry will begin once more,” says Swanepoel. “We still expect the South African commercial vehicle market to grow marginally by an estimated 3% during 2017, to around 28 998 units.”