As truck sales began to recover, those worried RBA's decision to hold interest rates could slow growth can take heart
By Gary Worrall | February 10, 2012
As truck sales began to recover during January, based on year-on-year registration figures, those worried the Reserve Bank’s decision to hold interest rates could slow growth can take heart.
With business borrowings predominantly tied to a separate interest rate, even a 0.5 percent cut by the central bank would have had virtually no impact on the cost of finance, is the word from one senior business figure.
Despite this, there are signs the general economy could be starting to recover, particularly if governments continue to invest in post-flood infrastructure repairs and upgrades that can generate long term employment.
At least one operator serving the construction industry ordered replacement prime movers in the second half of 2011 on the strength of forward contracts, yet others in the linehaul segment are stretching operating leases as far as possible.
Although the retail sector reported growth during the final quarter of 2011, unemployment remains high, however this is countered by studies showing those in employment are working an average of three hours more each week.
As a result, business confidence is still low, with a corresponding reluctance to commit to large scale investment, offering little certainty for transport operators looking to update vehicles.
Regardless, Kenworth, part of the PACCAR Group, enjoyed great success in January. It delivered 124 trucks for the month from its factory in Bayswater, Victoria.
Vice President for Volvo Trucks in Australia Gary Bone is upbeat about the prospects for Volvo in 2012, pointing to a 21 percent increase in market share during 2011 when the total market expanded just 4.8 percent.
Another to enjoy a highly successful January was MAN Trucks, delivering 36 trucks in January – more than double the result for the same period in 2011.
While these results are positive the question is whether the market will continue to expand in 2012 and at what rate this expansion will occur.