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South African Truck Market Expects Slow Growth

January 13, 2015

The South African truck market is expected to be relatively flat in 2015 with projected growth of 2.05 percent, according to a Moneyweb report.

Although an expansion of this magnitude is broadly in line with economic growth expectations, it is still subdued and perhaps an indication that the industry isn’t anticipating any meaningful boost from government’s infrastructure spending program, according to the report.

Truck operators and logistics groups also seem to take a more scientific approach to replacing vehicles, which is tending to make the South African vehicle park younger, according to the report. But the forecasted growth does not seem to point to any meaningful contribution from government’s infrastructure spending program or a boost from the lower oil price.

And while the lower oil price has provided motorists with a welcome breather, it is not expected to have a dramatic impact on truck sales, according to the report.

Instead, it will a far bigger effect on the operating costs and the profitability of transport operators. But it might take a year or two before any improvement in profitability could see operators replacing vehicles more freely, according to the report, quoting Rory Schulz, managing director of UD Trucks South Africa.

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