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Truck sales figures steady in “pretty tough” market

Truck manufacturers record steady sales in a "pretty tough" market affected by tight finance conditions

By Gary Worrall | June 17, 2011

Truck sales are generally regarded as a good barometer for the health of the wider economy, with many analysts subscribing to the view that more trucks on the road equate to more goods being delivered.

While the economic indicators point to a definite, although gradual, recovery it seems new truck sales are immune.

The manufacturers continue to talk a good game, saying customer interest is definitely stronger than in recent years.

Trailer and body builders are also reporting healthy, if not over-stuffed, order books, and there is plenty of confidence the sales will come. It just seems nobody knows exactly when.

Hino Australia President Steve Lotter says the market is still tough, and has not yet fully recovered from the global financial crisis. However, he remains confident the situation is beginning to improve, at least in Australia.

Lotter’s long-term confidence is shared among a number of his peers, with Scania General Manager Roger McCarthy saying there are “green shoots” taking root in the marketplace.

“The market has been pretty tough. There were some orders pulled forward because of some capital allowances in 2010,” McCarthy says.

“I think it will be tough into the third quarter but the trigger will be where the financiers help and assist the truck industry to move forward again.”

Mining remains a dirty word in many circles, although truck manufacturers are the first to admit that without sales into the mining regions they would be a lot worse off than they are currently.

McCarthy is quick to make the observation there are two different economies operating in Australia – one for the mining sector, and one for what he describes as the domestic sector.

“On the mining side of the business demand is very strong and I think we will see some continual growth there but on the general haulage side operators are still finding it difficult get finance for trucks,” he says.

It is a safe bet McCarthy will be pulling out all the stops in terms of encouraging financiers back to the market in the second half of 2011 as Scania introduces the R730 – billed as the world’s most powerful truck – late in 2011.

Aimed squarely at the linehaul market, the R730 will not be a loss leader, which means prospective operators will need to be on a strong financial footing before they walk into the dealership.

Despite McCarthy’s optimism, and the release of Scania Truck Rental in the first half of 2011, the Swedish manufacturer has delivered fewer trucks in the first five months of 2011, compared with 2010.

In the five months to May 2010, Scania delivered 144 trucks to hold a 1.3 percent market share. In 2011, the same 1.3 percent of the market is achieved with just 136 deliveries.

Another interesting comparison is to look at the market shares of the top six, year on year, and to see how they have fared. The overall market is down to 10,346 units in 2011, against 11,414 units to May 31, 2010.

By coincidence, the top six are not just the same companies but they are in the same order in 2011 as they were in 2010. Despite this, the total percentages make for interesting reading.

For 2010, as it is for every year, Isuzu topped the charts. It delivered 3,006 trucks for a 26.3 percent share.

It remains the preferred brand of Australian truck buyers, managing 2358 deliveries or a market share of 22.8 percent.

Running second is Hino, with 1,394 trucks sold to deliver market share of 13.5 percent. It sold 1,703 trucks (14.9 percent share) in 2010.

Fuso is third in the rankings, selling 1,160 trucks to finish with a share of 11.2 percent of the market. It sold 1,371 units the same time last year for a market share of 12 percent.

Kenworth is fourth in both tallies, and also top-selling heavy duty truck brand. Its numbers are down this year compared to last year. Its figure of 591 sales is less than the 706 trucks it offloaded this time last year.

Iveco and Western Star are the big winners in all of this. Iveco holding onto fifth position on the sales charts in both years, delivering 470 trucks in the first five months of 2010 and delivering 550 from January to May 31 this year.

There are bright spots in the sales results, and Volvo’s Gary Bone is one of the first to trumpet the good times his brand has enjoyed recently, starting with 2010.

“The market is coming along very well for us. We always want more sales but 2010 was a strong year for us. It was a nine-year high in our market share. That was very positive,” Bone says.

According to the comparative sales data, Volvo’s 2010’s year-to-date figures of 368 units and 3.2 percent market share are higher than the same period in 2011. Volvo recorded fewer deliveries (345 trucks) but increased market share, up to 3.3 percent in 2011, compared to 3.2 percent in 2010.

UD trucks, part of the global Volvo Trucks conglomerate, is well placed for a surge in the second half of the year.

It has already delivered more trucks than in early 2010 (345 units in 2011, 303 units in 2010) but it is enjoying more market share – 3.3 percent compared to 2.7 percent in 2010.

Factor in the new arrivals like Hyundai, Foton, CAT and Dennis Eagle, which between them already have more than one percent of the total market, plus the impending arrival of more manufacturers, and it looks as though the pie is going to be stretched even further than ever before.

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