Constructive extra-heavy growth

Constructive extra-heavy growth

“The truck industry is certainly bucking the trend this year,” says 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.”

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 were sold during June. This is a significant 11,49 percent growth on May 2014’s results, and 4,67 percent up on June 2013’s total.

Carelse says that various inflationary pressures, exchange rate vulnerability, labour unrest 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 consist of units transporting freight and fast-moving consumer goods. With gross domestic product declining and the country’s general poor economic performance this year, sales in these segments have already declined by 1,19 percent and 6,25 percent respectively,” adds Carelse.

On the positive side, looking at the performance of the remaining segments on a year-to-date basis, sales in the bus segment have increased by a significant 15,68 percent to 568 units – resulting from a number of large tenders that have recently been awarded. Sales in the extra-heavy commercial vehicle segment have increased noticeably by 10,23 percent to 6 832 units.

“The growth in the extra-heavy commercial vehicle market is due mainly 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 projects such as mining, agriculture and services over the next three years,” explains Carelse. “So truck models that are suited to supporting the development of these infrastructure projects will continue to sell well.”

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