Tough trading conditions

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The local commercial vehicle industry managed to deliver positive month-on-month sales results during May, even amidst challenging market and macroeconomic conditions.

According to the latest combined results released by the National Association of Automobile Manufacturers of South Africa (Naamsa), Associated Motor Holdings (AMH) and Amalgamated Automobile Distributors (AAD), a total of 2 477 units were sold during May. This was an 8.62% increase on April 2014’S results but down 3.66% on May 2013’s total sales.

“Factoring in a number of macroeconomic indicators such as a volatile Rand, high inflation and possible interest rate increases, we are very pleased that the South African truck market is holding its own amidst very tough market conditions,” said Jacques Carelse, managing director of UD Trucks Southern Africa. “With a positive first quarter behind us, we remain positive in ouroutlook of the market for the rest of the year, and still predict positive growth in total truck sales by the end of 2014.”

However, the segment for Medium Commercial Vehicles experienced its fifth consecutive monthly decline to settle at 798 units, and when compared to May 2013’s results, was a significant 17.73% down.

“The negative GDP growth, a decline in the Purchasing Manager’s Index and a rise in producer inflation, are currently all having a negative impact on new vehicle sales, and especially on the MCV market segment,” said Carelse.

When compared to May 2013, sales in the Heavy Commercial Vehicle segment declined by 6.46%. Using the same comparison, the Extra Heavy Commercial Vehicle segment increased by 4.86% and the Buses experienced an 82.76% boom in sales, mainly due to a number of large BRT Bus tender sales that have been recorded.

On a year-to-date basis, the EHCV and Bus segments also continue to shine with a significant 7.06% and 15.95% increase in sales respectively.

“We are expecting the difficult trading conditions to continue over the short term, but we believe the truck market will end the year in the black with a total of around 30 000 units,” concluded Carelse.

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