With the completion of the first quarter of 2013, the South African market for trucks, buses and vans with Gross Vehicle Mass ratings of more than 3 500 kg has recorded cumulative year-to-date growth of 1,2% when compared to the result for the equivalent January-March period in 2012. The sales total of 2 556 units reported to the National Association of Automobile Manufacturers of South Africa (NAAMSA) during March, 2013 was the highest recorded for any month so far during the current year, improving by a margin of 10,4%, on the final audited outcome for February 2013, and being almost identical to the 2 551 units reported one year ago in March, 2012.

Readers should please note that there have been important recent changes to the NAAMSA reporting regime. During March, Mercedes-Benz South Africa resumed fully detailed sales reporting, and provided corrected historical data dating back to December, 2011. This has necessitated the amending of the historical data supporting this analysis, and has, therefore, impacted on the comparisons made in these comments. While Associated Motor Holdings and Amalgamated Automobile Distributors still continue to report only aggregated MCV sales at time of writing, these are fully recognised in the analysis, and it should also be noted that Chinese brands FAW and Jiangling Motor Corporation have recently commenced full sales reporting. These developments have substantially improved the value of market comment offered in this, and similar reports, and are to be welcomed by commentators using vehicle sales statistics as an input for broader national economic analysis.

As published, the March market composition was made up of 1 015 Medium Commercial Vehicles (GVM ratings between 3 501 kg and 8 500 kg), 393 Heavy Commercials (goods vehicles with GVM ratings between 8 501 kg and 16 500 kg), 1 036 Extra Heavy Commercials (goods vehicles with GVM ratings above 16 500 kg) and 112 passenger Buses with GVM ratings above 8 500 kg. In the year-to-date comparison with the results of the equivalent first quarter of 2012, MCV volumes have improved by a margin of 5%, HCV sales have increased by 0,3%, EHCV volumes are equal, and Bus sales have reduced by 17,2%.

Dr. Casper Kruger, Vice President of Hino in South Africa, comments:"Notwithstanding the early advent of Easter in 2013, with its resulting loss of productive days in March caused by the widespread practice of extending the long weekend into an even longer leave period, the local truck market has returned a welcome, if marginal, measure of year-on-year growth in the first quarter. This is a pleasing outcome, given the generally lacklustre economic environment that has prevailed both locally and globally over this period. In South Africa, continuing Rand foreign exchange weakness has resulted in a succession of fuel price increases, in spite of declining international oil prices, and this has impacted on the local business mood, which has been reflected in the negative outlook of the most recent published results of the Kagiso Purchasing Managers' Index ".

Kruger continues:"It was notable that all the market growth in the first quarter was driven by the improvement in MCV sales. This segment is extremely diverse, being made up of distribution vehicles feeding the retail sector, panel vans used in fast freight delivery operations, small tippers serving building and renovation contractors, long-distance midibus taxis, local utility service units, and ambulances. This diversity makes the identification of driving forces behind improved sales a challenging task, but it can be said that the recent post-tsunami improvement in the availability of Japanese products, which dominate the chassis/cab element of the MCV segment, and some increased governmental buying activity in the panel van arena, have made contributions to the growth. MCV buyers tend to be spread widely across the spectrum from large fleet operators to small businesses, and also include a broad range of central, provincial and local government entities, so this performance is supportive of the view that the local economy, while not showing spectacular growth, is certainly not collapsing".

Kruger concludes:"With the first quarter of 2013 now complete, observers will be watching unfolding market developments over the following three months with great interest. Vehicle, parts and fuel pricing are likely to remain areas of concern to transport operators while the Rand continues to trade at current levels, but there are no present suggestions that the financing environment is under undue pressure, and vehicle availability, particularly in the MCV and HCV segments, should be better in 2013 than it was last year. Interest rates are unlikely to rise until some signs of improved macro economic conditions become evident, so a final 2013 market result broadly similar to the 2012 total still promises to be the most likely outcome".

Ends