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Passenger Transport, a Critical Element in the Transport Profile

Transport models impact the future

Large-scale people transport has and always will be a critical element in any country’s public and private transport system. In various metropoles across the country the roll-out of Bus Rapid Transit Systems (BRT) is going ahead as planned and on schedule.

The application of this ‘first-world’ approach appears to be finding growing public favour, despite a slow uptake from commuters at the beginning of the concept with Rea Vaya in Johannesburg. Interestingly, a report by Statistics SA, released on 17 July, indicated that the youth are becoming less inclined toward public transport, with their preference shifting to private means of transport.

pass TransportOne can only assume that should this trend continue, it may impact future public transport models. In the bus segment of NAAMSA’s reported sales, just over 458 units were sold up to May, which is an approximate +16% year-on-year growth.

Main drivers of bus sales have come from public transport projects where the push has been from government to use the funding set aside for regions to improve overall public transport systems. The coach segment of the bus market is in recovery mode, after the steep drop from the 2010 FIFA World Cup high.

This segment is settling back to realistic levels with a slight increase in sales being driven by growing demand from the tourism industry, as the weak ZAR exchange rate attracts foreign tourists to an affordable South African holiday destination. Sales in the bus market are seasonal, driven by many different factors.

As mentioned above, on the one hand we see the uptick in the tourism industry, but on the other hand private companies – staff and school transport, for example – are still resisting recommended replacement cycles, holding off on repurchase as long as possible.

Generally, the bus market appears to be ‘chugging’ along at a slow, steady pace overall. From NAAMSA’s July report: “South Africa urgently needs stronger growth, faster employment creation and a narrowing of the current account and fiscal deficits. The restoration of and improvement in domestic and foreign investor confidence represents a necessary pre-condition in this regard.

The current strike in the steel and engineering Industry is most unfortunate in that it would further undermine investment sentiment and, if prolonged, would increase the risk of the South African economy moving into recession. The impact on vehicle production and exports would start to be felt if the industrial action continued beyond three weeks. “The outlook for the automotive sector for the balance of 2014 is mixed.

Domestic sales may continue to be affected by general economic conditions, exchange rate induced new vehicle price increases and upward pressure on interest rates. The domestic market was likely to register a decline, in volume terms, of around 5% compared to 2013, with the main impact in the new car and light commercial vehicle sectors.

The heavy and extra heavy truck markets were expected to continue to hold up well. In the case of exports, further improvement was anticipated during the second half of 2014 on the back of better global economic growth.”

Tristan Wiggill
Special Features Editor at Business Fleet Africa