New truck market subdued says AP Eagers

Used truck demand strong but hangover from GFC still to wash out of the economy

February 29, 2012

Listed vehicle retailer AP Eagers has relied on car sales for profit growth as new truck sales performance languished in the first half of the financial year.

Net profit after tax came in at $40.3 million, up from $31.6 million in the previous first half, helped by the input of the Adtrans car and truck operations, bought in 2010.

Revenues were up 32 percent, from $2.4 billion, from $1.8 billion.

Domestic recovery from last year’s Australian floods and supply resumptions following the Thailand floods and Japan earthquakes helped.

This was despite "an economic environment characterised by low business and consumer confidence, weak retail markets, asset price deflation and increased government regulations and imposts"

"Heavy truck demand remains below long-term vehicle replacement requirements," Managing Director Martin Ward says, noting that used truck performance "was strong, reflecting a subdued truck market".

On the future, Ward was cautious, saying that the commercial car and truck market segment "may provide a greater contribution as the effects of the GFC [global financial crisis] on the commercial transport sector start to wane and previously deferred vehicle replacements enter the market".

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