The truck market continues to take a pummelling, even as early indications are that the global recession has started to bottom out.
Sales of extra heavy commercial vehicles were down 57% year-to-date at the end of July compared with 2008, with heavy commercial vehicles down 44,7%, and medium commercial vehicles 44,4%.
The bus market provides the only ray of hope in the commercial vehicle segment at the moment, at a 2% negative compared with 2008, this as government is equipping the public transport sector for the 2010 FIFA World Cup.
Mercedes-Benz South Africa (MBSA) commercial vehicles vicepresident Kobus van Zyl says truck sales typically lag passenger car sales by a few months.
As truck sales were still buoyant long after passenger car sales had entered the downturn, Van Zyl expects the truck market to now only pick up at the beginning of the next year, with passenger car sales already stabilising.
“Cars are down 29%. We would love that number right now,” says Van Zyl.
On a year-to-date basis, total truck sales are down from 21 884 units in 2008, to the current 11 398 units.
Van Zyl expects a South African truck market of 19 430 units this year.
This is a huge drop from last year's 34 664 units, and 2007’s record-breaking 37 069 units.
As recently as 2003, the truck market stood at an annual volume of 16 327 units.
Despite the doom and gloom, Van Zyl points out that the South African truck market is faring well compared with the rest of the world, with the segment down 60% in Western and Eastern Europe, for example.
Van Zyl says the local market is witnessing a lot of fleet replacement rather than expansion at the moment.
“Over the last few years companies build up their fleets to prepare for government's infrastructure spend, and now we see things starting to stabilise.”
Following much criticism from the trucking industry earlier this year that South Africa's traditional banks were shying away from providing credit to the automotive sector, Van Zyl believes the country's large banks have now started to return to the market.
“We are not where we were before the crisis, but the banks are definitely playing the market again. The banks are moving back. They understand the commercial vehicle market better now, and they are pricing the risk better,” he explains.
Around 45% of commercial vehicle deals within MBSA are funded in-house.
One aspect that has not improved is that the commercial vehicle parc is not providing service income to truck dealers as is the case with passenger vehicle dealers.
“Trucks are standing still, they are simply being parked, so workshop throughput has fallen dramatically,” notes Van Zyl.
He adds that MBSA's truck plant in East London, doing completely knockdown production, has been “severely affected” by the market downturn, but notes that no staff has been retrenched.
“To enable the plant to remain open we have spread out production volumes over the rest of the year. We have spend a lot of time and effort to build up expertise, and we do not want to lose this.”
Van Zyl notes that it was also important to retain staff in the light of the bus deal the company has clinched from the Gautrain rapid-rail link project, and the government supply contract it has secured for the World Cup.
Government earlier this year handed MBSA and MAN Truck & Bus the contracts to supply 570 buses to transport spectators, officials and players for the 2010 FIFA World Cup.
MBSA will supply 168 semiluxury and 292 intercity buses, and MAN 110 general spectator buses.
Bombela, the company building the Gautrain rapid-rail link, and the company which will operate it for 15 years, has also signed a deal with MBSA for the supply of 125 buses which will service the project’s feeder and distribution routes.
source:http://www.engineeringnews.co.za
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