Volvo Group SA expects 2016 to be another tough year for the local truck and bus market

Volvo Group SA expects 2016 to be another tough year for the local truck and bus market. The company forecasts only marginal growth across all segments, if any, with the various manufacturers vigorously competing for the limited new sales business out there.

“With the South African economy predicted to grow by only 1% during 2016, we expect the local truck market to be in for another challenging year,” states Torbjörn Christensson, President of Volvo Group Southern Africa.

A combination of macro-economic factors, including a weak exchange rate, pressure on inflation and interest rates, as well low business confidence levels, already contributed to a decline in local truck sales during 2015.

“I strongly believe that you have to be service orientated and if you get that right, your customers will stick with you through the good and the bad times,” says Christensson. “Fortunately, I believe that this has been one of our Group’s strong points over the years – building relationships with customers and providing them with customised solutions that suit each of their unique requirements.”

Over the past few years, Volvo Group SA made a number of structural changes to fully incorporate all the company’s brands and entities into one organisation.

“We have taken several steps to make the company more efficient, profitable and more viable for the long term, especially in light of the local economy’s current status,” says Christensson.

This includes becoming one legal entity at the beginning of last year, and integrating all support functions into one back-office.

“The merger of our various capabilities enables us to better support the company’s future growth within southern and eastern Africa,” explains Christensson.

“It is therefore a strategic investment in our future and will enable us to support our customers more efficiently and timely, especially in light of the significant volume growth our brands have experienced over the last number of years.”

During 2015, the company was assigned increased responsibility for the entire South en East Africa region, which includes 21 markets, such as Angola, Malawi and Sudan, and countries in the Southern African Development Community ( SADC) region.

Volvo Group SA has a comprehensive dealer network for its various brands across this region, with a growing footprint to serve and support fleet owners where they operate. There are over 70 dealers that represent either UD Trucks, Volvo Trucks, Volvo Bus and Renault Trucks, or a combination of the brands at sites across South and East Africa.

The company is also continuously investing in the enhancement and expansion of its dealer network. “With dealers and branches already present all along the major routes and trade corridors in southern and eastern Africa, fleet owners are able to get complete support from us,” says Christensson.

We are seeing a lot of economic growth potential in the region and we therefore believe that if you want to increase your market share, your aftermarket service has to be outstanding.

2016 focus

This year, the company will have detailed focus on efficient and reliable aftermarket support, which suit their customers’ operations and specific requirements.

Part of this commitment is extending its representation across the South- East Africa region in order to efficiently support customers where they operate. The company is in the process of appointing new importers in Ethiopia, Zambia, Kenya, Tanzania and Uganda.

Christensson points out that as transport operators expand their operations throughout the region, the various Volvo Group SA brands have to be there to capture this market demand and support customers every step of the way. In addition, the company will introduce new enhancements to its current product offering, including new specifications for the Volvo FH and FMX ranges.

UD Trucks launch a new heavy commercial vehicle range later in 2016

UD Trucks will also launch a new heavy commercial vehicle range later on in 2016, and the UD Quester range will be introduced into Africa from the first quarter of this year.

“I have the privilege to work with some of the most experienced, skillful and passionate people in the industry,” concludes Christensson.

As a company, we have confidence in the future of the transport industry in the region. We have therefore aligned our strategies, services and products to address the very unique operating requirements and conditions of transport operators in the region. We remain committed to the success of our customers in South-East Africa.

“We remain committed to the success of our customers in South-East Africa”

Successful 2015 for the Volvo Group

Volvo Group Southern Africa has a 15% share of the SADC truck and bus market, selling 4 563 units during 2015.

In 2015, total sales in the Extra-heavy Commercial Vehicle segment of the market amounted to 13 405 units. In this segment, Volvo Group brands Volvo Trucks and UD Trucks both managed to increase their market share within the SADC region. Volvo Trucks moved up from fifh position in 2014 to third position in 2015 with 1 822 units and a 13,6% market share, while UD Trucks claimed the fourth spot, up from seventh in 2014, with 1 316 units and a 9,8% market share. Renault Trucks sold 112 units during 2015.

Volvo Group is also the leader in the truck-tractor segment within the SADC region, with a 30% market share and, in addition, the Volvo FH 13-litre 440 6×4 TT was the single biggest-selling model across all segments.

New product lines were launched for Volvo Trucks, Renault Trucks and UD Trucks during the past two years, providing local fleet owners with products that meet specific requirements across a wide range of applications.

UD Trucks also secured the second position in the Heavy Commercial Vehicle segment, with a total of 1 171 units and a 20,9% market share.

During 2015, Volvo Bus delivered its first full low-floor Bus Rapid Transport units to the City of Cape Town and Tshwane Metros last year. A total of 64 Volvo Bus units were delivered in 2015, providing the brand with a 6% market share.

Volvo Group opened a new Used Truck Centre on the East Rand last year, and a total of 1 000 units was sold through this entity during 2015.

Volvo Penta, a local company which supplies engines and complete power systems for marine and industrial appli-cations, had a record sales year during 2015 with a 69% increase in sales to 1 450 units.