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UD Trucks Whips Out The Crystal Ball Again For 2015

Jan 14, 2015 UDTrucks, Commercial, heavyduty, sales

UD Trucks Whips Out The Crystal Ball Again For 2015

As is now customary for the commercial vehicle maker, as a kickoff for the year, UD Trucks held their truck market overview press briefing in Johannesburg on 13 January. Newly (well, officially anyway) appointed MD Rory Schultz took the meeting through UD's analysis of the local heavy duty market figures for 2014, and presented their forecast for the year.
 
"On the whole, the truck market seems to have weathered the storm" he began, with the overall market growing by 2.04% for the period, despite the 4.86% drop in MCV sales . HCV remained pretty much flat with XHCV and busses growing by 7.68% and 19.79% respectively.”
 
"Since the economic crisis of 2008, the market has actually done very well all things considered, and I believe that this adjustment is a check or balancing of the market". That the sector is not in a decline can be viewed positively and an indication of stability in the truck market.
 
UD's own growth figure of 9.29% was well above this industry growth of the 2.04% average. The best performing segment was XHCV which grew 24.29% compared the industry segment’s average growth of 7.68%. In the HCV segment the growth may have been minimal for all players, but UD experienced a better second half of the year,  to come in at 1st position with a healthy market share of 23.94% of that market segment. Shultz attributed this mainly to the good year experienced by the construction industry, and it translated to a healthy looking market share - the brand is coming 4th place among the local players, with 10.66% of the total market.
 
"We believe that our support to our customers in terms of things such as driver training and truck maintenance have made an impact, specifically in light of the very high profile accidents in the past year," continued Shultz. He explained that 60% of all HCV's are being sold with maintenance contracts, which ensures a level of safety can be achieved. The dealer network has trained over 1000 people in the past year, and Shultz hinted at a brand new driver training initiative, apparently soon to be launched by Volvo Trucks.
 
In terms of macro economic indicators, the news is really not that great: the GDP is down, inflation looks to be able to ease on the back of dropping crude oil prices, but in reality commodity inflation will still outrun earnings, and the ripples caused by our unstable currency will continue to be felt. Labour seems stable, but then who really knows what will happen after 2014's experiences.
 
"World events are another factor outside of our control – my feeling is that a major "event" is possible, when you consider that we are seeing world leaders demonstrate in the street of the first time".
 
The crystal ball predictions for the market growth are not too bullish – Shultz predicts a marginal 2.04% average growth for 2015 across all segments, with a contraction in all but XHCV for UD. This overall figure is also effected by the fact that after the running out of their now discontinued U41 models meant they were absent from the MCV segment for the for the forecast. In addition UD does not have a product in the  bus segment which he predicts will have a 12% growth in 2015 and so contributes heavily to the predicted industry growth of 2.04%.
 
He wound down the discussion with the presentation of a number of highlights for the upcoming year – the Quester launch to be held in March, the global 80th birthday celebrations and the new parts distribution centre in Jet park.
 
The full story will be carried in AutoForum's printed edition for January/February.

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