No stop­ping sales

Even bus fleets are be­ing built up

Finweek English Edition - - Fleet management and financing -

IN­EF­FI­CIENT RAIL TRANS­PORT has re­sulted in around 75% of all freight in South Africa now be­ing trans­ported by road, ac­cord­ing to road freight in­dus­try cal­cu­la­tions

That’s re­sulted in truck fleets in­creas­ing sig­nif­i­cantly in size over the past two decades. Plus there’s been mas­sive growth, es­pe­cially in the big­gest cat­e­gory – trucks over 20 t.

The sales of new ve­hi­cles, in­clud­ing buses and trucks, were live­lier than for a long time over the past two years, thanks to SA’s eco­nomic pros­per­ity and a stronger rand, which made im­ported ve­hi­cles cheaper. In many cases, new records were set.

Fleet man­agers used the op­por­tu­nity to build up their fleets, as a later weaker rand could re­sult in above av­er­age price in­creases. And cur­rent low­ish in­ter­est rates and at­trac­tive fi­nanc­ing of­fers won’t last.

Ac­cord­ing to Naamsa fig­ures, truck and bus sales last year were bet­ter than in 2005, when sales in­creased by 31,7% to 27 406 units. Last year’s fig­ure was 33 080 units, 12% bet­ter than in 2005.

The main prob­lem that buy­ers face when de­cid­ing to buy a new ve­hi­cle is choos­ing be­tween the ap­prox­i­mately 15 man­u­fac­tur­ers and ex­ten­sive model ranges.

How­ever, there’s a clear pref­er­ence for cer­tain brands that have al­ways been among the top sell­ers.

For ex­am­ple, in the cat­e­gory for trucks of 3,5 t to 8,5 tons Toy­ota was the leader, with 2 859 units. Mercedes-Benz sold 1 824, Nis­san Diesel 1 656 and Isuzu 1 482. The new­comer, Tata – which sold a mod­est 98 units in SA in 2000 – was just a shade be­hind Toy­ota last year with 2 605 units.

The progress made by other mod­els is also no­tice­able. Mit­subishi’s Fuso se­ries im­proved from just 136 units in 2003 to last year’s 634, and in the cat­e­gory for 8,5 t to 16,5 t it grew from only one unit in 2004 to 361 last year.

In buses, MAN, Mercedes-Benz, Sca­nia and Volvo were the lead­ers last year. The com­bined sales of those four rep­re­sented around 93% of the to­tal, with the rest be­ing shared by the six other man­u­fac­tur­ers.

Justin Haler, of Truck & Bus, says that bus sales last year rose to 1 250, which is the high­est since the golden era in 1981, when around 2 500 were sold. “That’s en­cour­ag­ing when you re­mem­ber that an­nual sales in 1992 fell to just 285 units,” Haler says.

In the late Eight­ies, bus sales fell to less than 1 000 units/year. Only in 2002 was the 1 000 mark again reached.

Haler says the bet­ter sales over the past two years were an in­di­ca­tion that old bus fleets are be­ing re­newed. “If there hadn’t been short­ages at cer­tain over­seas man­u­fac­tur­ers the fig­ure could have been even higher last year.”

One of the most strik­ing trends of the past few years is that trucks in cer­tain sec­tors are hired rather than bought. Some of the main play­ers here in­clude Im­pe­rial Truck Rental, Bar­loworld and Avis Truck Rental.

Im­pe­rial Truck Rental MD Eileen Cara­manus says the rental mar­ket is ex­pected to grow con­sid­er­ably up to 2010. She says the mar­ket is a good barom­e­ter of how the econ­omy is far­ing. “Our great­est chal­lenge now is to ben­e­fit as much as pos­si­ble from the boom by think­ing lat­er­ally as far as our rental prod­ucts to both trans­port op­er­a­tors and oc­ca­sional cus­tomers are con­cerned.”

Fleet man­age­ment jour­nal Fleet­Watch praises the rental mar­ket and says it’s pop­u­lar be­cause ve­hi­cles don’t ap­pear on bal­ance sheets and the full costs can be writ­ten off as op­er­at­ing ex­penses. They also don’t have to worry about how they’ll sell an old ve­hi­cle, nor about the in­evitable cap­i­tal losses. The rental group also han­dles ser­vic­ing and re­pairs.

Truck fleets in­creased.

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