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January–March 2008
M/HCV quarterly sales
were still a surprising 11.7% ahead of 2007
by Richard
Proctor-Sims |
WITH ITS UNPRECEDENTED growth
cycle now entering a ninth year, new medium and heavy (M/HCV) truck and bus
sales in Southern Africa continued to outperform the lighter segments of the
market in the first quarter of 2008. By contrast, the quarter-onquarter
sales of cars and light commercials declined between 2007 and 2008 by no
less than 19.1% and 7.5% respectively, and the industry would be screaming
“Help!” if it were not for healthy exports.
The reasons for the continued
strength of the new M/HCV market – albeit at a lower growth rate than
previously – must be sought outside the usual market indicators. So, while
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economic growth has slowed;
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South Africa’s currency has become weaker;
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interest rates have turned sharply higher;
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the price of diesel is at an all-time high;
the heavy and continuing infrastructure growth programmes associated with,
but by no means limited to, the 2010 Football World Cup are one of the more
important reasons for M/HCV market growth – as, indeed, also for the
growth of the civil engineering sector.
Three new reasons are also
emerging from the country’s energy crisis. The first is the need to
increase coal supplies to power stations – mainly over a road system for
which improvements have been announced. The second is the effort required to
speed up the present new power station construction programme. And the third
is the haulage and other work that will be associated with demothballing
less efficient power stations.
A final important reason is
the transport industry’s competitiveness. This can be witnessed by
travelling along any trunk road and observing the ever newer and more
efficient haulage rigs now in operation. The initial cost of the best new
drivelines may seem to be high but the best owners have shown that this can
be recovered from operating cost savings over a few hundred thousand working
kilometres – or in as little as two or three years.
The extent of recent sales
growth for the four M/HCV segments is summarised in Table A, which shows the
first-quarter totals for the past five years. Except in the case of buses,
all the segments have more than doubled their sales over this five-year
period.
Highlights in the numbered
tables which follow in our sectoral analysis of new commercial vehicle
sales include:
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Volkswagen’s now
significant presence in three of the four markets
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Mercedes-Benz South
Africa’s divisions’ contribution to an MBSA market dominance
reflected in its 26.9% share of total sales – 3.7% higher than the
23.2% share it held a year ago and well ahead of second-placed Toyota’s
15.7%
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signs of a possible
surge in sales of new bus and coach chassis
While the remainder of 2008
is even less predictable than usual, our view is that only a sudden drop
in confidence – no sign of which can yet be discerned – seems likely
to prevent sales for the full year breaking the until recently almost
undreamt barrier of 40,000 units.
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Comment:
The colour entries in this and the following tables indicate
manufacturers whose year-on-year increases were higher than average.
At the top of the table, the three truck divisions of Mercedes-Benz
South Africa – Mercedes- Benz itself as well as Freightliner and
Fuso – have increased their dominance and now account for 26.9% of
total sales, compared with 23.2% for both Q1 2007 and the full 2007
year. In another comparison with the totals table for the full 2007
year, Volkswagen – which is now represented in three of the four
medium and heavy commercial vehicle (M/HCV) segments – and Nissan
– which is only an MCV player – have moved into the first 10
places, displacing Volvo and Scania. Volvo, despite at least
temporarily not being represented in the bus and coach market, has
overtaken fellow Swedish manufacturer Scania. At the lower end of
the table, Fiat has had a bright start to the year, Peugeot is just
hanging on and Ford is still nominally represented, but Gaz and
BMC-ERF have so far both had nil returns. |
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Comment:
In recent years, the number of players in this vehicle category
increased from five manufacturers – which are all still in the
top half of the table – to 15. However, this number is again
decreasing, and although the first nine or 10 players seem
well-entrenched, Toyota and Mercedes-Benz comfortably outsell the
combined competition, including Tata, which only a year or two ago
seemed ready to challenge Toyota’s lead. |
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Comment:
Although the dominance of the market leaders remains, Volkswagen
last year made an auspicious debut in the heavier truck and bus segments.
Although our prediction a year ago that this formerly weak segment of the
country’s truck market might contribute an annual total of 8000 units in
2007 was slightly optimistic, trucks with GVMs of 8.5 to 15.5 tons are by
no means as rare as they once were. Remarkably, Hino enjoys exactly the
same percentage of this market (26.9%) as the combined Mercedes-Benz
divisions’ share of the M/HVC sales total. |
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Comment:
At the start of 2008, South Africa’s important premium truck
segment continued its above-industry-average growth. For the first
quarter of the year, unusually, sales by the four manufacturers at the
top of the table all showed aboveaverage increases. Although Tata again
disappointed, dropping from third place only a year ago to ninth for Q1
2008, most of the established makes performed well. In the Tyco stabled,
however, only Daf improved its year-on-year performance – this despite
its a nil (or late) return for the month of March 2008. |
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Comment:
There may be no significance in the sharp increase in bus and coach
sales for the first quarter of the year, as some sales may have carried
over from the traditionally strong fourth quarter. On the other hand,
however, the level of new bus and coach sales may at last be increasing
significantly ahead of the public transport requirements for the Football
World Cup due to be held in South Africa in 2010. Outstanding features of
the table are the sudden increase in the sales of Volkswagen buses –
from nothing less than two years ago to third place in this year’s Q1
table – and a nil return for the year so far from Volvo, which not long
ago was one of the three strongest players in this market. Iveco, making a
welcome return after many months of selling no more than an occasional bus
chassis, had its best quarterly sales figure for several years. |
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The tables refer to
Naamsa members’ sales of new trucks and buses in South Africa, Botswana,
Lesotho, Namibia and Swaziland ¯ the five countries that make up the
Southern African Customs Union (Sacu). New truck and bus sales by
non-members of Naamsa are not significant. Response Group Trendline ( www.rgt.co.za
), which processes and reports the figures on behalf of Naamsa,
continuously updates anomalies in earlier reporting. This process can lead
to small discrepancies between the totals for each table and the figures
for individual manufacturers.
Analysis and comment
© 2008 Richard Proctor-Sims - fontein@wol.co.za
- from whom further information is available. Data © 2008 Naamsa ¯ naamsa@iafrica.com |
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