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Fleets buy down as economy continues to struggle

Even though South Africa’s struggling economy is continuing to have an impact on the local commercial vehicle industry, the sector showed a 3.1% year-on-year growth in new unit sales at the end of October.

Fleets buy down as economy continues to struggle

According to the latest combined year-to-date 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 23 190 new trucks and buses has been sold so far in 2019.

Compared to the ten-month sales statistics of 2019, sales in the Medium Commercial Vehicle (MCV) has increased by a significant 12.0% to 7 270 units.  Heavy Commercial Vehicle (HCV) sales dropped by 7.7% during the same timeframe to 4 190 units.  Extra Heavy Commercial (EHCV) sales continued to climb, with 11 039 sales so far this year – a 4.6% increase over 2018’s statistics.  Bus sales remained in the negative, with only 691 units sold this year, a significant 23% decline.

Fleets buy down as economy continues to struggle“For the past few months we have seen a certain buying pattern emerge amongst fleet owners in the truck market,” explained Gert Swanepoel, managing director of UD Trucks Southern Africa. “With MCVs continuing its double-digit growth and HCVs on the other hand declining by around 7%, it is a clear indication to us that customers are buying down into the smaller, and less expensive, vehicle segments.  This is largely due to the prevailing challenging economic conditions in the country.”

Meanwhile, the EHCV segment’s growth continues on the back of the bulk movement of goods and commodities.

“Perhaps there is an underlying sense of resilience, which would be the positive takeaway from this, or we should be on our toes and ensure that we prepare for some tougher trading months ahead,” cautioned Swanepoel.

 

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