Heavy duty truck sales experience May dip


Instant asset write-off moves seen as yet to impact on light vehicles

Heavy duty truck sales experience May dip
Tony McMullan

 

Truck Industry Council (TIC) analysis of the May round of commercial vehicle sales is sober but avoids falling into despair.

TIC’s T-Mark figures show heavy- and, especially, medium-duty segments in decline, reflecting the economic impact of Covid-19, but the sector gaining some limited respite from light-duty vehicles.

It notes that the relative lag in the new truck sales hit is likely due to "the relative long lead-times involved in ordering a truck, getting it built, having equipment and/or a body built and fitted, registration and then delivery of the completed vehicle to the customer".

"Year-to-date the entire heavy truck market trails the end of May 2019 sales by 20.2 percent with just one month remaining before we reach the half way point of the year," TIC says.

"Despite the plummeting sales, we have not yet reach ‘the worst sales on record’, with May 2009, 2010, 2011 and 2014 sales in the post Global Financial Crisis era, being slightly worse than those of May 2020."

TIC finds value in drilling down on the lighter end of the market and its ‘mixed’ result.

Light-duty truck sales (3,500kg-8,000kg GVM) totalled 899 for the month of May, down 10 per cent, or 100 vehicles, over the May 2019 result.

Year-to-date the LD truck segment is tracking lower, but sales remain quite consistent month to month, down 13.5 per cent (-572 trucks). A total of 3,672 light trucks have been sold year-to-date in 2020.

"It was another poor month for light-duty van sales, with May being a far cry from the start the year, where the van segment outperformed all the other heavy vehicle segments.

Sales however fell away somewhat in March, more in April and this continued in May.

"A total of only 451 vans were sold in May, this represented a fall of 26.2 per cent over May 2019 (-160 vans).

"While the year-to-date, end of May result is a little better at -18.6 per cent, mainly due to those solid January and February sales. Only 2,003 vans have been sold in 2020. That is 457 fewer light duty van sales than in 2019."


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TIC sees the outcome as a solid reflection of the broader economic situation and has hopes for federal government measures to ameliorate the downturn.

"The May heavy- and medium-duty sales numbers are more in-line with the economic downturn that we have seen in many sectors of the Australian economy," TIC CEO Tony McMullan says.

"Light duty truck sales are better than expected and that result may be a reflection on the $150,000 instant asset write-off put in place by the federal government.

"Though, it is interesting to note that light-duty van sales are not responding to this incentive, as the van segment continues to decline after opening the year with strong sales in January and February.

"Whilst on the point of the federal government’s $150,000 instant asset write-off, the Truck Industry Council welcomes [the] announcement by the government to extend this incentive until the 31st December 2020.

"TIC met with Ministers McCormack and Buchholz during May calling for the incentive to be extended. We are pleased to acknowledge the strong representations of both Ministers who took TIC’s call for the extension direct to the Treasurer meeting with success.

"TIC has also called for specific incentives to support the medium- and heavy truck segments, with the release of these May sales figures offering proof that these segments are floundering under the current economic climate created by Covid-19.

"I again seek support from the Australian government to provide stimulus that will assist the entire heavy vehicle sector as we move to rebuild our economy over the coming months and years."

 

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