What will 2017 hold?

In a troubled and financially volatile world, how many new trucks and buses will be sold in South Africa in 2017? VIC OLIVER gives his forecast for the 2017 truck and bus market

FOCUS on Transport and Logistics has a proud record, spanning the last ten years, of accurately forecasting the number of medium, heavy, and extra-heavy-duty trucks and buses that will be sold during the year.

At the time of writing this article, the final figures illustrating the number of trucks and buses that would be sold in 2016 by the various manufacturers in the country was not available, but, following the trend line of sales to date in the 2016 calendar year, we can expect approximately 27 000 vehicles to be sold across the vehicle categories. This is exactly the number that was forecast by FOCUS last year.

Accurately forecasting the sales in the next calendar year is a major challenge for all truck and bus manufacturers and importers. Getting the sales forecast right means that the truck or bus manufacturer, or importer, can order the correct number of vehicles to satisfy demand – bearing in mind that lead times, from date of order until the vehicle arrives in the country and is ready for sale, can be as long as five or six months.    

On the other side of the coin, it can be a very expensive error to over-order vehicle stock.

Forecasting the 2017 truck and bus market is no easy task with so much political unrest and infighting within the South African government, as well as the student unrest. The world is also changing fast, due to stormy global economic shifts.

The election of a new president in the United States of America is another factor that needs to be taken into account when estimating truck and bus sales for 2017. A change in leadership in the world’s biggest economy breeds a lack of business confidence and uncertainty around the world.

Added to this we are experiencing a severe drought and water shortage in the country, which has affected vehicle sales in the agriculture and forestry segments of the market.

On the positive side of the outlook for 2017, China appears to be recovering from its economic slowdown. This could see a renewed demand for South African commodities like coal, chrome and iron ore, which could result in a growth in the extra-heavy segment of the truck market.

The 3,3 percent growth in the gross domestic product (GDP) in the second quarter of 2016 is another good indicator that the truck and bus market should stay fairly stable in 2017.

Securing finance for trucks and buses is a major hurdle when exporting vehicles from South Africa to neighbouring countries in Africa. Notwithstanding this, many manufacturers are successful in selling their vehicles across the border, and continue to explore the opportunities in these countries.

Taking cognisance of the past and present negative and positive indicators, my forecast is that the market will stay reasonably stable and that we can expect 27 000 medium, heavy, extra-heavy and buses to be sold in South Africa during 2017.

One of this country’s most respected commercial vehicle industry authorities, VIC OLIVER has been in this industry for over 50 years. Before joining the FOCUS team, he spent 15 years with Nissan Diesel (now UD Trucks), 11 years with Busaf and seven years with International.