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Figures show industry is on road to recovery

It's been a hard two years for the truck market, but latest sales figures show it is on the improve

By Gary Worrall | August 10, 2010

It has been a hard two years since the global finance crash triggered a mini-depression in new truck sales, but the release of July registrations show the long-awaited ‘light at the end of the tunnel’ is within sight.

After an increase in deliveries during June as the last of the trucks ordered as part of the federal stimulus package were handed over to new owners, there was a degree of uncertainty as to how the July results would turn out.

Chief among the concerns was the possibility of order ‘pull through’ bringing scheduled purchases forward in time to earn a tax credit, leading to a soft market in the second half of the calendar year.

Adding to the confusion is the ongoing debate as to how much ‘pre-buy’ will occur ahead of the change to ADR 80/03 exhaust emission regulations, with speculation it could be significant as operators choose to remain with technologies like exhaust gas recirculation (EGR) while avoiding particulate filters and selective catalyst reduction (SCR).

Despite this confusion over potential sales, it seems truck buyers have voted with their wallets, placing a steady stream of orders, without being excessive.

With 21 years of overall market leadership to the company’s credit, as well as a solid lead in the 2010 sales race, Isuzu achieved a rare quadrella during July.

It not only delivered the most trucks overall (555 units), but also topped the individual categories of light (265) and medium duty (214) and shared the heavy duty segment with Kenworth (76 units each).

“I don’t think Kenworth will be too threatened by the result, as these figures include a broader definition of heavy duty trucks than is used by the manufacturers,” the marketing manager for Isuzu Australia, says Jeff Birdseye, says.

“It is a great result, as long as we don’t take ourselves too seriously. We understand they (Kenworth) would be number one in the heavy duty segment.”

Birdseye says Isuzu is happy to be the overall leaders for the 22nd year in a row and is watching a good battle between Hino and Fuso for second place, with just 405 deliveries separating the two manufacturers.

Hino CEO Steve Lotter says the expectation is for the Australian market to increase by about 11 percent in 2010 compared to 2009.
“We believe the total market will be around 26,500 units, and of that, we have a target of 4800 units here at Hino,” Lotter says.

While manufacturers are expecting an increase in the total market, it is no secret many expect it to be a gradual increase, with a number of industry heavy hitters privately suggesting similar overall totals to Lotter.

With virtually every manufacturer now offering ADR 80/03 compliant models, the situation becomes interesting with some looking to clear existing stocks of ‘80/02’ models before the December 31 regulatory change.

Also complicating the local situation are the lead times for manufacturers relying on overseas factories to produce either complete trucks or the sub-assemblies needed for Australian factories.

Despite the increase in confidence in the Australian market, importers can face lengthy delays caused by factories running at reduced capacity due to weak demand, with Australian orders insufficient to justify significant increases in factory outputs.

With the first month of the new financial year complete, and monthly deliveries returning to regular levels, a number of performances are worthy of mention.

This includes Iveco (77), UD Trucks (67) and Volvo (63), which all posted strong performances in the medium and heavy duty segments.

Mercedes-Benz topped the light commercials with 180 deliveries, followed by Ford (160) and Volkswagen (95 units), with FIAT and Iveco also performing strongly for the month.

Scania (30 units; 5.6 percent) and MAN (14 trucks; 2.6 percent) did well to increase their market share in the heavy duty segments, with Western Star (40 units; 7.5 percent) slipping slightly compared to year-to-date figures.

Other notable achievements came in the medium duty segment, with UD Trucks (49 units 9.6 percent) and Mercedes-Benz (10 units 2 percent) doing well to improve or maintain their share in a slow market segment.

In the light duty market, Fuso (169 units) beat Hino (126 units) to the runner-up place behind Isuzu, however Lotter is confident the release of new light duty product will turn this result around in the final months of the year.

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