FleetWatch Online - 68-NaamsaFeb07

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Past Issues

February 2006

Figures, analysis and comment supplied quarterly by
Richard Proctor-Sims

January sales postscript

ALTHOUGH the results for the different sectors were mixed, the expected slowdown in the rate of increase of new vehicle sales in Southern Africa has been confirmed by the returns for January 2007. As the following table shows, the important extra heavy truck sector showed sharply higher unit sales, while the other sectors showed smaller increases or, in the case of heavy commercials, an actual decrease (which represented a correction after this sector’s several quarters of higher than average growth). The comparisons are with the same month a year ago.

	2005	2006	Change
Cars	34 278	35 810	+4.5%
LCVs	12 629	14 257	+12.9%
MCVs	852	877	+2.9%
HCVs	440	394	-10.5%
EHCVs	574	812	+41.5%
Buses	48	54	+12.5%
M/HCV totals	1914	2137	+11.7%
All vehicles	48 821	52 213	+6.9%

M/HCV sales for the full year 20.7%
higher than in 2005
- by Richard Proctor-Sims

ALTHOUGH still an outstanding improvement, last year’s almost 21% year-on-year increase in the sales of new medium and heavy commercial vehicles in the Southern African Customs Union was lower than the comparable increases in the two previous years: 32% for 2005 over 2004 and 28% for 2004 over 2003.

For the industry as a whole, Naamsa, the representative body, commented (on 9January 2007 that "during 2006, South Africa was once again one of the best-performing new vehicle markets in the world".

Although, based on a wide range of economic and other indicators, a further slowdown in growth is widely expected this year, Naamsa still expects new car sales to increase by 4-6% in 2007, with new commercial vehicle sales increasing by 10-11%.

South Africa may soon expect to be one of the world’s elite vehicle-producing countries whose domestic markets plus export production exceed a million units a year. Few would have guessed even three or four years ago that the country might achieve this distinction inside a decade. See also the commentary to Table B.

Table A. Quarterly unit sales and index comparisons for 2005 and 2006 (Q1 2005 = 100)
colour = highest indices of each of the two years
2005
	Q1		Q2		Q3		Q4
MCVs	2 448	100	3 243	132	3 239	132	3 313	135
Heavy trucks	991	100	1 332	134	1 555	157	1 298	131
Extra heavies	1 858	100	2 200	118	2 535	136	2 360	127
Buses	175	100	250	143	290	166	315	180
M/HCV totals	5 472	100	6 936	127	7619	139	7 379	135
2006
	Q1		Q2		Q3		Q4
MCVs	3 150	128	3 568	146	3 960	162	3 573	146
Heavy trucks	1 471	148	1 598	161	1 892	191	1 733	179
Extra heavies	2 065	111	2 859	138	3 134	152	2 832	137
Buses	250	143	303	173	303	173	339	194
M/HCV totals	6 936	127	8 328	152	9 289	170	8 530	156

This table shows:

the considerable growth during the two years

that although the third quarter is normally the strongest, two Q4 sales figures in 2005 (medium commercials and buses) and one Q4 sales figure in 2006 (buses) were higher than their Q3 equivalents

Table B. Sales by Naamsa members and index comparisons for the years 2004, 2005 and 2006
	2004		2005		2006
Cars	301 154	100	376 894	125	426 831	142
LCVs	127 692	100	160 711	126	186 667	146
M/HCVs	20 820	100	27 413	132	33 083	159
Total market(1)	449 603	100	565 019	126	646 581	144
Exports(2)	110 507	100	139 912	127	179 854	163

Notes: (1) Naamsa comments that sales of new vehicles not at present reported in detail through the industry body "are estimated to have added 67 759 units to the 2006 figures". This increases the size of the customs union market to more than 714 000 vehicles. (2) The 2006 export figure includes some 440 M/HCVs, or 12.5% more than in 2005. Naamsa expects the 2007 export figure to exceed 220 000 units.

This table shows:

that the 25-year-old record of 30 742 M/HCVs sold in 1981 was broken in 2006, when no fewer than 33 083 M/HCV units were sold

that the total Southern African Naamsa market of 646 581, plus the 67 759 units sold in this market but not reported in detail through Naamsa, plus the export figure of 179 854 units adds up to Southern Africa customs union market plus exports total of 894 194 units, that with the 40 000 additional export units expected in 2007 South Africa will be in striking range of a million units total in 2007 or 2008.

Comment:
The colour entries in this and the following four tables indicate players whose year-on-year increases are higher than average. Although its percentage growth was just below the average, DaimlerChrysler’s position at the top of the table appears unassailable, with all its divisions having done well. Tata just overtook Toyota/Hino to move into second position, but its overall growth rate has slowed to a level lower than the market average. Iveco had an exceptionally good year, while General Motors and Tyco also returned good figures. MAN recovered from a weak position early in the year, while Volvo has also slowed its recent slide. Of the other major players, Toyota/Hino retained its position in the top three, despite experiencing only modest growth, while Scania reported lower unit sales, which it partly offset by the industry’s strongest export performance.

Comment:
Toyota remained ahead of Tata, but its lead has narrowed. Neither of the two leading players achieved the average growth for this sector. Among the established makes, Iveco, Isuzu and Mercedes-Benz reported higher-than-average sales growth. Despite the presence of 15 players in this market, the top five makes accounted for three-quarters of total sales.

Comment:
In 2006, heavy trucks were the fastest-growing, although still the smallest, of the truck categories. The first four players accounted for no less than 77% of total heavy truck sales.

Comment:
With four exceptions – Volvo, Scania, Mercedes-Benz and Hino – all the players in this weight class achieved sales increase above or just below the average for this table. Tata’s strong performance is an indication of its very recent entry into the extra-heavy truck market. Despite the relatively disappointing performance of market leader Mercedes-Benz, DaimlerChrysler’s three divisions – Mercedes-Benz, Freightliner and Fuso – captured no less than 29% of extra heavy truck sales – or almost as much as the next two players combined – MAN (17%) and Tyco’s three divisions, International, Daf and Renault (15%).

Comment:
Although there are now nine competitors in this market – whose size if the government’s announced intention of making road passenger transport safer is to be taken seriously needs to be several times larger. The four leading players still account for 19 of every 20 buses and coaches sold.

The tables refer to Naamsa members’ sales of new trucks and buses in South Africa, Botswana, Lesotho, Namibia and Swaziland _ the five countries of the Southern African Customs Union (Sacu). New truck and bus sales by non-members of Naamsa are not significant.