TIC warns of headwinds for truck sales

Promising figures put down to continuing trend of financial institutions loosening purse strings to transport firms

July 8, 2013

Financial institutions have continued to loosen purse strings to transport firms and the Truck Industry Council (TIC) sees
this as being reflected in the
latest commercial vehicles sales figures.

But while the first six months recorded more commercial vehicles sold than at the same stage of any year since 2008, pre-election business uncertainty was seen as causing slowing demand in the second quarter.

"It is generally accepted in the industry that difficulties experienced by many fleets in obtaining credit for new capital purchases in the three or more years following the GFC are behind us," the TIC notes.

"Financiers have been offering very low interest rates on more favourable terms than we have seen in recent years.

"Accordingly, this is allowing some truck operators to update their fleets, despite uncertainty front he key indicators in the economy."

It sees the shift in mining and resources focus from construction to production as likely to off-set to at some stage by residential and commercial property construction as that sector appears to be rebounding.

Meanwhile, TIC CEO Tony McMullen hopes pre-election caution remains at realistic levels rather than infecting the market.

"It is well documented that Australian businesses do not make unnecessary investments during an election campaign, and we have certainly experienced an eventful year in federal politics so far," McMullen says.

"Australian truck suppliers and their customers will maintain a close watch on both international and domestic economic conditions in the second half of 2013.

"If non-resources sectors can recover in the next few months, truck sales will follow.

"By contrast, if decline in international demand for Australian raw materials is experienced, without a concurrent upturn in domestic activity, we may see truck sales taper off towards the end of the year.

"While overall truck sales growth of 5 percent through to June is as expected, it is hard to predict what the gain through to the end of the year will be."

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