Gauteng Business News

Send  Share  RSS  Twitter  19 Jan 2010

LOGISTICS: December Truck Market Surprises on the Upside


Recent Gauteng Business News

The South African Market for Commercial Vehicles over 3 500 kg Gross Vehicle Mass provided a pleasant surprise during the month of December, 2009, by recording a total sales volume only twelve units less, or 0,8% smaller, than the final audited total for the month of November, 2009.

This result ran contrary to the recent pattern where total truck, van and bus sales volumes in the month of December have been at least 25% less than those of the preceding month. The total retail volume of 1 449 units reported to the National Association of Automobile Manufacturers of South Africa (NAAMSA), last month, resulted in a preliminary grand total for the year of 18 938 units, which was also somewhat higher than generally expected, given the market performance of recent months.

Casper Kruger, Vice President of Hino in South Africa, comments: “With the publication of the December sales result, the final magnitude of the much-discussed 2009 Truck Market finally emerged. While the result is disappointing when compared to the series of record and near-record years which preceded 2009, the supply industry can now take a step back to review the events of the past twelve months, and identify those factors which contributed to the erosion of the earlier strong demand levels for trucks."

While the general impact of the global financial crisis on the South African business environment cannot be ignored, and clearly contributed to the extremely low level of business confidence reported by the South African Chamber of Commerce and Industry in December, the emergence of stringent credit entry barriers in the local asset financing sector, has emerged as the most likely reason why the Truck Market did not show the anticipated level of resilience in 2009.

Consistent anecdotal evidence of demand running considerably ahead of the supply level supported by the banks was forthcoming, and the result was a market that was unable to reach the consensus supply industry forecast of just less than 28 500 units circulating at the beginning of the year”.

Kruger continues: “One positive indication that emerged from the overall 2009 result, however, was the consistency exhibited by the market during the March to December period, where individual monthly results were tightly clustered around the 1 536 unit average for those ten months. This level, should, therefore, act as a firm base for growth once recovery starts, which is expected from February 2010.

However, the rapidly approaching Soccer World Cup 2010 which is expected to attract several hundred thousands of foreign visitors in June and July, will place considerable demands on the country’s consumer goods distribution and passenger transport infrastructures, and resulting short-term spikes in the demand for MCV’s, HCV’s and Buses could manifest over the next six months. These will supplement an expected recovery in XHCV volumes driven by the continued national emphasis on fixed investment projects up to, and beyond, SWC 2010.

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