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June truck sales consolidate as world cup kicks off
Total sales of trucks, buses and vans in South Africa during the opening month of Soccer World Cup 2010 came in marginally lower than those of the previous month. The total volume of 1 897 units reported in June, 2010 to the National Association of Automobile Manufacturers of South Africa was 1,5% below the final audited result for the month of May, and followed March (2 150 units) and May (1 926 units) as the third best sales month recorded during the opening half of the year.
The June 2010 market composition was made up of 735 Medium Commercial Vehicles (GVM ratings between 3 501 kg and 8 500 kg), 385 Heavy Commercials (goods vehicles with GVM ratings between 8 501 kg and 16 500 kg), 673 Extra Heavy Commercials (goods vehicles with GVM ratings above 16 500 kg) and 104 passenger Buses with GVM ratings above 8 500 kg. In comparison with the equivalent result of one month earlier, entry-level MCV trucks and vans declined by a marginal 0,7%, cruiserweight HCV trucks grew their volume by 5,2%, premium payload XHCV trucks increased by 10,9%, and passenger buses, with most deliveries of SWC-related units now complete, declined by 51,2%.
Casper Kruger, Vice President of Hino in South Africa, comments: "It was to be expected that the enormous hype leading up to and culminating in the spectacularly successful kick off of the 2010 Soccer World Cup on 11th June would have some disruptive impact on business in South Africa, so this result, with the June market coming in only marginally lower than the May result, must be seen as extremely positive. Preparations for, and support of the opening event and the ensuing games would have presented transport and distribution companies with enormous logistical challenges, and allowed little spare time for the sourcing, buying and financing of new vehicles. Fleet preparations in anticipation of SWC 2010 were important factors supporting the improved market conditions in the first half of the year, but this influence will now abate as the event plays out".
Kruger continues: "With that perspective, it is important that we analyse the market's half year performance up to the end of June, to get some feel for the overall direction of truck, van and bus sales. Compared to the first six months of 2009, the equivalent 2010 result represented an increase of 9,3% in overall volume, but the performance of the individual segments make interesting reading. While the MCV year-on-year comparison results in a decline of 1,9%. and HCV sales fell by a more substantial 3,2%, volumes in the XHCV segment rose by 19,5%, and Bus sales improved by just less than 79%. This impressive latter result is built on the considerable numbers of buses and coaches that have been delivered to PRASA, Autopax and the Gautrain operation in recent months, but excludes the unreported Korean vehicles that were specially imported to act as team coaches for the participating SWC nations. The substantially improved XHCV performance, however, is particularly significant, and reflects a more supportive financing environment for these vehicles, often costing more than R1 million each, than the credit restrictions that severely limited their sales potential in 2009".
Kruger concludes: "As we predicted last month, the truck market results in both June and July must come under the influence of the considerable distraction to which potential buyers are currently being exposed. Many local businesses are either involved in delivering people, goods or services to SWC 2010 venues, while, in others, staff are engaged in entertaining customers at World Cup matches or making the time to attend games themselves. For millions of South Africans, this is a once-off opportunity to see and experience their favourite sport at an unprecedented level of quality, and the importance of the event as a unifier and nation builder cannot be ignored. However, there have been some recent signs that global and local events have resulted in a moderating of business confidence in the country. This follows some earlier uncertainty surrounding the magnitude and ultimate success of SWC 2010, although current pointers suggest a largely satisfactory outcome. However, the extended impact of the recent Transnet strike and threats of stoppages in other sectors have also played their part in disturbing the equilibrium of decision makers. For this reason, July's result will be particularly important for gauging the forward-looking mood of local business after the World Cup, and will act as a launching pad for the market's future direction".