A look back
But, before we go onto 2023, let’s take a quick look back at 2022. As Elvis Mutseura, Product Marketing Manager at Iveco SA notes, the market can best be described as “very interesting”.
“Sales rebounded from the pandemic lows faster than most people had predicted – with volumes as good or even better than the period right before we went into lockdown ‘all those years ago’. This was a bit of a surprise – given the supply chain issues that have bedevilled most manufacturers, causing the long delivery timelines that many truck buyers have experienced,” he notes.
Trends per segment
Mutseura is not expecting growth in the medium segment. “It has been flat and should continue as such into 2023. But it may benefit from government spending in pursuit of visible service delivery in the run-up to the 2024 elections,” he believes.
According to Mutseura, the largest growth/rebound in 2022 was in the heavy commercial vehicle (HCV) sector. “I have the feeling that this is due in no small part to operators having to revisit fleet replacement that they postponed during the pandemic. I cannot see much in the way of economic activity that would drive this growth further into the immediate future, leading me to expect a flat heavy CV segment 2023 vs 2022 (a slight contraction would also not surprise me),” he reveals.
Exports drive growth
Maretha Gerber, Vice President: Sales & Marketing Daimler Truck Southern Africa, concurs. “The growth is driven by various factors. There’s some kind of catching up in the market after 2020/21. The impact of higher demand for exports of goods is driving growth as well. Furthermore, many customers consolidated and sweated assets during Covid. They are now ready to replace their fleets. Plus there is the new trend of growth up into Africa,” she notes.
Graig Roberts, Senior Manager Production Planning and Marketing at Hino, says it has been particularly interesting to see how the HCV sector has grown. “The affordable brands have caused a shift in the market structure for the last few years, with HCV growing from 18 to 20,5%, with combined affordable market share growth from 21% in 2017 to around 37% in 2022,” he reveals.
Moving to the extra-heavy segment of the market, Mutseura says sales have been driven largely by the commodity boom that started even before the war in Ukraine – but then received a massive boost (coal particularly) as a result of the war.
Troubles at Transnet Freight Rail stimulate trucking
“The troubles at Transnet Freight Rail have been a further stimulant for truck sales growth in this segment. Will this continue into 2023? I lean towards a yes,” says Mutseura.
“Transnet’s woes will not be fixed overnight. Consequently, I believe that the extra-heavy market will remain buoyant next year – notwithstanding the dampening effect of load shedding on manufacturing,” he predicts.
Gerber shares Mutseura’s sentiments when it comes to Transnet Freight Rail. “Due to the current lack of rail infrastructure, the demand for commercial vehicles (long haul, distribution) will remain high, with a better outlook on construction as well,” she notes.
Like Mutseura, Rory Schulz, Sales Director of UD Trucks Southern Africa, is also reasonably positive about the market in 2023 – but he says it won’t be without its challenges. “We expect a continued slowdown in construction and public utilities. Distribution, which has grown most aggressively in the last year, will stabilise at pre-2019 levels. The long-haul segment will follow the trend of the commodities/mining sector, which will align with the global economic slowdown that is anticipated.
Euro 5 to lower transport costs
“We don’t give forward-looking statements in general, but we expect the market to grow (Q1) and have an ambition to grow market share in Euro 5 and Euro 3 products. We are confident that Euro 5 will help to bring the cost of transport down,” says Schulz.
Daimler’s Gerber believes we will still see a very strong market for at least the next eight months – with the market returning to normal towards the end of the year.
“The market is contending with a number of negative and positive factors. On the negative side, we have increased global interest rates, driven by higher global inflation and we still foresee further disruptions to the various supply chains. All these activities might also attribute to increases in costs throughout the supply chain and logistics sector,” she notes.
“On the positive side, there is still global demand for certain of SA’s commodities. I believe that the truck market in 2023 will still be strong (at least in the first half), but will most likely end slightly lower than 2022,” Gerber maintains.
Mutseura reckons we will see total sales of around 29 000 to 29 500 units in 2023.
The final word goes to Hino’s Roberts. “We believe the market will recover and improve to about 31 000 units in 2023,” he notes. Let’s hope he’s right!
