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Exports boost SA’s light-vehicle manufacturers’ sales

Stagnant Africa economies hold gloomy prospects for truck companies.

Exports may be the saving grace for light-vehicle manufacturers in SA, but truck companies see almost no prospect of significant short-term growth in sales beyond SA’s borders, UD Trucks MD Gert Swanepoel said.

Of 18,289 vehicles exported in January, 18,218 were cars or bakkies. That left 70 trucks and a solitary bus. Until African economies pick up, that is the way it will stay, Swanepoel said.

Truck companies rely on Africa for exports, but there are economic problems in almost all sub-Saharan African markets, he said.

“There is no acceleration in the region. Lack of access to finance is a real problem,” Swanepoel said.

Car and bakkie producers, which ship their vehicles globally, are much more bullish. January’s exports were 24.6% higher than a year earlier, and the National Association of Automobile Manufacturers of SA (Naamsa) expects the industry to ship out 385,000 vehicles for the full year. That is well up on the annual record of 351,139 set in 2018.

However, Swanepoel is not too downcast about his sector’s lack of export growth. While light-vehicle producers expect the SA domestic market to shrink in 2019 for the fifth time in six years, truck companies hope for growth. In 2018, when the overall market declined 1%, sales of medium, heavy and extra-heavy trucks rose 5%, from 25,173 to 26,422. He believes the sector “will be very close to that this year, possibly a little more”.

Overall sales

Initial signs are encouraging. January figures, published on Friday, show truck sales were up again compared with January 2018. It was a rare piece of good news in an otherwise disappointing market. Overall sales of new vehicles were down 7.4%, from 45,772 to 42,374. The car market tumbled 10.8%, from 32,552 to 29,040. Sales of light commercials grew by two units — 11,681 from 11,679.

WesBank CEO Chris de Kock predicted in January that the overall market for 2019 as a whole will fall by 1%. After seeing January’s numbers, his sales and marketing executive, Ghana Msibi, said at the weekend that economic pressures on private and corporate buyers, allied to political uncertainty leading up to May’s national elections, are bound to undermine the market in the early part of the year.

Naamsa director Nico Vermeulen said: “We hope post-election policy reforms and the government’s commitment to revitalise the South African economy will translate into improved domestic sales during the second half of 2019.”

Given current unpredictability, Msibi said it is “prudent for consumers to delay their vehicle purchases within the practical considerations of maintenance costs and reliability”.

South Africans are already holding on to vehicles longer than they used to. Swanepoel said truck owners used to keep their vehicles for just more than eight years, now the average is more than 12 years. “For safety’s sake, ideally we need to get it back to about 10 years,” he said.


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