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The 2009/2008 sales decline of 43% for the first
quarter worsened to more than 48% for the first six month
by Richard
Proctor-Sims |
THE SERIOUSNESS OF THE PLIGHT
of the South African manufacturers of medium and heavy trucks and buses is
underlined by the fact that 10 of the 19 manufacturers listed in Table 1
sold fewer vehicles in the first half of 2009 than they did in the first
quarter of 2008.
With the single exception of
the recent arrival of VDL in the bus market, there have been no winners.
Some players in the MCV + HCV sector – such as Scania, Peugeot, General
Motors and Volkswagen – have fared less badly than the average, while some
– such as Renault Trucks, Super Group, Tata and Iveco – have fared much
worse, and some – Daf Trucks and Ford – have fallen away, with others
possibly to follow. While the overall decline was 48.2%, bus sales performed
best (-20.7%), while the previously most successful segment, extra heavy
trucks, performed worst (-56.9%).
The market leader,
Mercedes-Benz, proved to be no exception, with sales declines of 50%, 63%,
49% and 58% in the medium, heavy, extra heavy and bus segments. Indeed, the
second marque in the Mercedes-Benz South Africa line-up, Fuso, easily
outperformed its senior partner in the medium and heavy segments, in which
it had declines of “only” 24% and 48%.
Table A, for 2007-2009,
illustrates the abnormal decline between the first and second quarters of
2009. Historically, the second quarter of any year has almost invariably
been stronger than the first quarter. (The third quarter is usually the
strongest of the four, followed by the second quarter and then, about
equally, by the first and fourth quarters.)
In 2008, as can be seen, the
second quarter was an exception in the case of medium trucks, while the
quarterly returns for bus sales, which are small numbers in any case, have
always been erratic, with the only generalisation being that the fourth
quarter is usually the strongest sales period for this market. The marked
drop in 2009 from Q1 to Q2 should be seen against this background.
Seasonality seems now to be less important than actuality, with the
actuality being that vehicle sales in the sector of most concern to Fleetwatch
readers have continued the sharp decline they showed in the first
quarter.
Table B indicates the
steepness of the decline between the first half of 2008 and the first half
of 2009. It also shows that overall sales have dropped to levels last seen
five years ago – or, in the case of extra-heavy trucks, even longer ago.
In a similar way to what has happened in other parts of the world, this has
taken place in the context of our region’s overall economy – not to
speak of infrastructure plans and construction – which is very much larger
today than it was five or six years ago.
The last of the three tables
in the text, Table C, shows the relative strength of the whole South African
new vehicle industry’s four sectors for the first half of each of the four
years 2006-2009. (“HCVs” includes all trucks and buses heavier than 8.5
tons gross vehicle mass – or the total of our Tables 3-5.)
The value of this table is not
so much that it shows that current sales are only 53% to 68% of their
equivalents for the various sectors of the levels for 2006, but rather in
the way it illustrates the more gradual decline of car sales, starting in
2007, compared with the more recent but steeper falls in the case of the
three commercial vehicle market sectors. Although domestic car sales now
stand at only 53% of their 2006 levels, car manufacturers were, at least
until recently, cushioned by good export sales numbers. While the same could
also be said for LCV manufacturers, the manufacturers of MCVs and HCVs have
never enjoyed substantial export sales. Having noted this, however, it
should be recorded that MCV + HCV export sales declined at a lower rate
(20%) than domestic and regional sales between January and June 2008 (479
units) and January and June 2009 (382 units).
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NOTE
TO TABLES 1-5. The
percentage changes in blue indicate the manufacturers or marques
whose sales figures for the first six months were better than the
industry average between 2008 and 2009.
Comment:
As indicated in the
main text, there are no shining lights in this totals table. Only
five manufacturers managed to limit their sales declines to -30% or
better, while no fewer than six returned declines of more than -70%.
Unless confidence returns to the market soon, which is unlikely
until the economy again begins to expand, the number of active
manufacturers of medium and heavy trucks and buses in our region
could fall to only about a dozen. Returns for the third quarter will
almost certainly provide a pointer as Q3 is traditionally the
strongest of the three quarters. If sales were again to be lower
than the previous quarter (Q2), the market might stay in decline for
another year. |
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Comment: No fewer than six of the seven manufacturers in
the first seven positions reported declines of less than the market
average. On the other hand, Tata and Iveco on their own accounted
for no fewer than 35% of the 3,039 units lost in the first six
months of 2009 compared with the same period of 2008. Iveco’s
withdrawal from this market, which looks possible on the present
evidence, would be a matter of great regret as its Daily has been a
leading LCV since the days when only five players where listed in
this table.
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Comment: Hino has recaptured its first position in this
table from Isuzu, and it shared with Isuzu and Nissan Diesel the
distinction of sales declines that were lower than the average for
this segment. While Fuso’s decline was not much worse than
average, none of the players in positions 5-9 – including
Mercedes-Benz, Iveco and Volkswagen – have distinguished
themselves in the current poor market conditions, and Super Group
seems to have withdrawn altogether from this market.
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Comment: Volkswagen, still a small player in the heaviest
truck segment, was the only manufacturer to improve its sales over the
two half-year periods. Six more companies, Scania, Navistar, Volvo,
Isuzu, Mercedes-Benz and MAN (just), reported lower than average sales
declines, while Hino was within one per cent of the average decline for
the table. Those in charge of the substantial infrastructure projects
still on the drawing board may be wondering whether the supply chain
will break – unless, that is, they remain confident that the present
vehicle park is underutilised. Even if this were so, there is little
interchangeability between a longhaul rig and a construction truck. In
this context, it seems likely that sales returns will improve on the
current levels in the third quarter. These would, however, need to be
substanially higher – probably in excess of 15% higher – before any
encouragement could be read into them.
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Comment: Almost exactly half the total sales for the period
of Iveco – which is faring so poorly in the other vehicle segments, in
which it was recently a strongish player – were represented by bus
chassis, putting it in a strong second position in this table, which
otherwise has no highlights and many disappointments, especially in the
light of our earlier suggestion that bus sales might break through the
2,000-unit barrier in 2009 if all the Gautrain, airport and city public
transport upgrading projects were to remain on track. The disagreements
on transport provision between taxi bodies and city governments continue
– to such an extent that Fifa has recently criticised South Africa for
having a passenger-movement infrastructure inadequate to meet the
demands of the 2010 Football world cup.
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Small improvements to the
presentation of this feature are introduced from time to time. If you
have a special request, please email Richard Proctor-Sims on fontein@wol.co.za
The main tables refer to
Naamsa members’ sales of new trucks and buses in South Africa,
Botswana, Lesotho, Namibia and Swaziland the five countries in 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, and this
can lead to discrepancies between the totals for each table and the figures for individual manufacturers.
Analysis and comment
© 2009 Richard Proctor-Sims fontein@wol.co.za
and Data © 2009 Naamsa naamsa@iafrica.com |
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