Industry feeling effects of economic unease
Strike action and a nervous economy are having an impact on the industry
WHILE the sovereign debt crisis in Europe continues to hamper trading conditions in emerging markets, several indicators suggest that investor confidence in the South African economy was severely undermined by recent labour unrest, resulting in significant reductions in the sales of new trucks and buses.
According to Naamsa (National Association of Automobile Manufacturers of South Africa); “The tragic events at Marikana together with the current high level of industrial action in an increasing number of sectors in the economy, has dented business confidence in South Africa. Consumers similarly have been affected and concerns about the macro socioeconomic environment in the country are likely to have resulted in a deferral of purchasing decisions.”
August 2012 sales figures of new heavy commercial vehicles showed an 8% drop on the corresponding month in 2011, coinciding with the events at Marikana midway through the month. The strike action by truck drivers has exacerbated an already tenuous situation, causing further declines in this sector of the local automotive industry.
“Sales of vehicles in the heavy truck and bus segments of the Industry recorded a decrease of 129 units or 7.7% during September 2012, compared to the corresponding month last year. The weak sales performance also reflected lower business confidence,” reports Naamsa.
Local sales volumes of heavy trucks (8,501kg-16,500kg GVM) during September 2012 fell by 3%, extra-heavy truck volumes declined by 9.1% and new heavy 20 881 20 225 Increase of 3.2% between YTD 2011 and YTD 2010 September 2012 2 322 August 2012 2 464 September 2011 2 524 Decrease of 8.1% between sales in September 2012 and September 2011 *NOTE: These figures include figures for Associated Motor Holdings (AMH), but NOT for Mercedes Benz SA, which is currently reporting only aggregated figures following a directive from Daimler in Germany. bus sales volumes dropped by 14.8%. Some comfort was drawn from positive intra-Africa export volumes however, where new heavy truck sales volumes rose by 10.5%, with extra-heavy truck exports registering an impressive 152.6% rise on September last year. New heavy bus export volumes rose by 42.9%, compared to 3 643 3 627 Increase of 0.4% between YTD 2012 and YTD 2011 September 2012 448 August 2012 352 September 2011 462 Decrease of 3% between sales in September 2012 and September 2011 September 2011, states Naamsa.
Despite these negative results, local year-to-date figures in all three segments remain marginal but positive, with heavy truck sales during the first nine months of 2012 up by 0.4%, extra-heavy trucks up by 2.8% and heavy buses up by 3% on the corresponding period last year.
Year-to-date export figures in all three categories suggest solid growth in markets north of the Limpopo, with heavy truck exports up by 98.9%, extra-heavy truck exports up by 46.4% and heavy bus exports climbing by 95.2% during the first nine months of this year, compared to the corresponding 2011 period respectively.
Bruce Dickson, deputy CEO, MAN Truck & Bus SA, says: “The heavy commercial vehicle industry is capital-intensive and fleet owners are extremely sensitive to volatility in the broader economic environment, both from an operational point of view and from a new vehicle procurement perspective. The combined effects of slowed foreign investment and recent violent labour action in this country have no doubt dampened buying patterns in the heavy road fleet market over the last two months.
“Despite the current instability in our labour market and the rising cost of diesel, the steady climb of South African heavy commercial vehicle exports into Africa is a positive sign that the local industry has much room for growth. Regarding the constrained domestic market, fleet operators can mitigate the impact of the negative macro-economic factors by lowering their overall operating costs through the deployment of fuel-efficient vehicles and by implementing proactive management methodologies to improve fleet efficiencies and driver satisfaction.”