Orders trickle in, but truck sales flood way off

<font color=red><b>THE RECOVERY:</b></font> Truck sales lift, but manufacturers don't expect significant increase until 2010

Orders trickle in, but truck sales flood way off
Orders trickle in, but truck sales flood way off

By Gary Worrall | October 12, 2009

The are signs the truck sales market is lifting, but manufacturers don't expect a significant increase in new fleet demand until the second half of next year.

September sales figures from industry data group ERG show an improvement on August, but still close to 30 percent down on 2008 results.

Top truck manufacturer Isuzu has strengthened its position to capture 30 percent of the total market, but like all manufacturers has suffered significant sales declines this year.

Isuzu Australia Marketing Manager Jeff Birdseye says the road to recovery will be a long one.

"The Australian economy does appear to be coming out of recession," he says. "Our outlook for 2010 is that market will increase in the latter half of the year.

"But the market is still about 30 percent down on last year, especially in the heavy segment, and that hasn’t helped those who rely on that for their sales."

Despite his conservative assessment, mirrored by many in the industry, Birdseye says there are bright spots. Isuzu finished second behind Kenworth in the heavy duty segment for the month of September, 148 units to 80 units.

In a blow to established brands Volvo, Freightliner, Mack and Western Star, the September result saw the Japanese manufacturer overtake Mack (48 units) on the year-to-date heavy duty ladder.

For Hino and Fuso, the story remains the same, with strong performances as individual organisations across a range of segments, but even these are eclipsed by the Isuzu juggernaut.

In the heavy segment, Volvo and Freightliner remain locked in a battle for second which is likely to only be decided by December’s sales figures, while in the medium sector Japanese brands Isuzu, Hino, Fuso and UD remain comfortably ahead of their European opposition, led by Iveco and Mercedes.

But Birdseye insists Isuzu is not looking to challenge Kenworth for linehaul supremacy.

"We are not challenging linehaul yet, but we do offer alternatives for other applications," he says.

"We don’t intend to challenge Kenworth, they are an icon and have plenty of loyal fans. Instead we have trucks like the FX, which bridges the traditional gap. It is an F-Series cab on a Gigamax chassis, it is a very heavy truck."

Andrew Hadjikakou, Sales and Marketing Director for Kenworth and DAF parent PACCAR, agrees the market is lifting but remains a fraction of the record-high months of 2007 and 2008.

There is more activity on the order books, he says, along with an increase in quote requests compared to the latter part of 2008 and early 2009, aided by improvements in the finance area.

"I think this is improving," he says. "Finance was quite restrictive in late 2008 and early 2009. I am not sure if the banks have loosened up, I don’t think we have seen a big improvement yet."

Despite the prevailing conservatism, Hadjikakou says the mining sector appears to be improving, with a consequent lift in the heavy haulage sector being reflected in greater customer activity which he hopes spreads to other areas of the transport industry.

"What we will concentrate on is making trucks that are purpose-built for our customer needs," Hadjikakou says.

Birdseye says Isuzu will look to supply body trucks, as well as its genuine B-Double contender Gigamax which offers alternatives on short haul and other applications.

"Twin steers and things like that will happen anyway, but it is not a specific plan yet," he says.

And he says Isuzu Australia will continue to benefit from being a favourite of its Japanese head office, as a result of strong sales performances compared to other global markets.

"Historically, Australia has been treated well after helping save the company," he says.

"We are allowed to design our own vehicles, and this is continuing into the current situation as one of Isuzu’s healthiest global markets."

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