Truck sales better than expected

By: Steve Brooks


While history may ultimately view 2020’s modest truck sales figures as something of a seismic slide caused by the economic impacts of COVID-19, it may also come to see the year as the first sign of significant shake-up on the market leader board. A new ‘normal’, perhaps.

Truck sales better than expected
Volvo is up and about

 

If half yearly results are anything to go by, truck sales figures for 2020 may not be the complete disaster some pundits have been spectacularly quick to predict.

Certainly, the sales market to the end of June hasn’t been great and the strong figures of the previous three years now seem like a distant dream. Or were they an unsustainable illusion?

Whatever, we’ve never seen anything like Covid-19 before and the simple fact is that 2020 numbers to date could have been worse.

Much worse.

For instance, as the Truck Industry Council (TIC) reported back in May, "Despite the plummeting sales, we have not yet reach (sic)’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."

Yet perhaps the best sign that 2020’s slippery slope hasn’t been quite as steep as first envisaged – at least not at this stage – is the figures for the first quarter of this year in the immediate pre-Covid months were considerably lower than those in the second quarter as Covid impacts took hold.

More simply, truck sales in heavy-duty, medium-duty and light-duty classes were all higher in the second quarter than the first.  

In effect, the market has marginally improved as the year has progressed. Still, the numbers aren’t brilliant.

Not by a long shot.

But again, it’s not as bad as it could have been due in no small part to government economic stimulus packages and a number of clever finance and service initiatives by several leading brands.

Collectively and individually, various industry initiatives and government incentives have helped soften the impact to a dull thud rather than a brutal thump.

Sales for the month of June were especially buoyant, with the normally conservative commentary of the TIC almost effusive in its assessment of the month’s result.

According to TIC’s statement, "The month of June bucked the recent Covid-19 trend of plummeting truck sales in Australia and while history shows that truck sales peak in June every year, no doubt due to the tax benefits that exist at the end of each financial year, the June 2020 sales result was something quite special.

"It resulted in the best monthly sales EVER recorded in Australia.’"

In total, 4,620 trucks and vans with a gross vehicle mass (GVM) rating above 3.5 tonnes were sold last month, eclipsing the previous best result when 4,231 units were delivered in June 2018.  

The star performer in June was the light-duty class, "… buoyed no doubt by the federal government’s instant asset write-off of $150,000," TIC reports.

"The June 2020 tally for light-duty trucks was 1,583 units, surpassing the previous monthly record of 1,304 set in June 2018.’

In the heavy-duty class, more than 4,900 new trucks were delivered to the market in the first half of this year and if the current trend continues, it’s entirely possible that around 10,000 new heavy-duty trucks will be delivered in 2020.

Again, not a record-breaking number but far better than initially expected and for what it’s worth, notably better than the 4,511 heavy-duty trucks delivered in the first half of 2016 when market conditions were simply flat and the word ‘virus’ had more relevance to computers than people.

Medium-duty results for the first half of the year were typically subdued with 3265 units delivered.

Again though, the medium-duty sector has been off the boil for a couple of years, so this year’s figures are perhaps indicative of a trend mixed within the difficulties of current conditions.

There is, of course, still a long way to go and despite June’s stellar result and its contribution to a reasonable performance for the first half of the year, Victoria’s recent shutdown with its resultant effect on a return to some semblance of economic health will only add to the duration of national pain. That said though, this country’s reliance on an efficient and reliable road transport industry has rarely been more evident or more vital than during the past six months or so.


Read the Steve Brooks review of the new Fuso Shogun, here


Meantime, there has been a significant shift in some areas of the market.

In the heavy-duty sector, Volvo has maintained recent momentum by displacing Kenworth for market leadership.

For the six months to the end of June, Volvo held 18.8 per cent of the high profile category with 923 deliveries for the year to date and Kenworth more than 100 units behind on 16.6 per cent. 

Seemingly entrenched in third place is Isuzu with 12.6 per cent, followed by a close contest for minor placings with Scania on 8.2 per cent, fractionally ahead of Mercedes-Benz on 8.1 per cent and Mack on 7.7 per cent.

There were, however, a couple of worthy performances among other heavy-duty hopefuls. UD and DAF, for example, are now close to notching five per cent of the sector.

It may not sound much but on the back of impressive new products, both these brands have managed to improve market penetration in these difficult days.

Perhaps the most notable change, however, is in the medium-duty class, where Hino appears to be inching its way ever close to historic market leader Isuzu.

Admittedly, there’s still a sizeable gap between Isuzu’s 40.4 per cent of the category and Hino’s 33.8 per cent, but the acceptance of Hino’s new 500-series with its swag of standard safety features certainly appears to be keeping the market’s attention.   

In the light-duty class, however, Isuzu’s leadership remains absolute with a 40.2 percent stake and its nearest competitor, Hino again, well back on 23.4 per cent.

Considering the results of the first six months, the second half of 2020 should be at least interesting.

For its part, the Truck Industry Council is maintaining a cautious outlook. As chief executive officer Tony McMullan recently concluded, "It must be remembered that July, August and September truck sales are historically low, as the new financial year begins.

"Coupled with an Australian economy still reeling from the effects of Covid-19 and now with much of Victoria facing Stage 3 lockdown restrictions again, I have concerns that the better than expected June sales result will be a short-lived aberration."

The hope, of course, is that McMullan’s concerns fail to fly.

‘No Go’ for Melbourne Truck Show

It appears increasingly likely that ongoing Covid-19 restrictions will be the final nail in the coffin of the Truck Industry Council’s (TIC) divisive attempt to end the Brisbane Truck Show’s crown as the premier event on the Australian trucking calendar.

The council’s original plan was to conduct an event called the Australian Truck Exhibition and Technology Symposium at the Melbourne Convention and Exhibition Centre on March 21 to 23, 2021, just two months before the next Brisbane Truck Show in May.

According to several industry insiders, TIC’s decision to forge ahead with plans for a rival event was largely to stifle the funds accrued by the organiser of the Brisbane Truck Show, the Heavy Vehicle Industry Association (HVIA).

Some sources suggest TIC, which describes itself as ‘the peak industry organisation representing the united views of Australian-based truck manufacturers, truck importers, heavy vehicle engine companies and major component suppliers’, was simply seeking to keep its members’ truck show costs within its own ranks and similarly, establish itself as a more effective representative and lobbying body than the HVIA. 

However, the proposal for a Melbourne event has been a divisive issue within TIC’s membership, not least because previous attempts over many years by various organising bodies to run a successful Melbourne truck show have been ineffective. Similarly, the council’s decision to engage a costly German organiser (Deutsche Messe) for its Melbourne event has not been well received by some members.

Moreover, the recent appointment of Daimler Truck and Bus Australia (Freightliner, Fuso and Mercedes-Benz) president Daniel Whitehead to the board of the HVIA highlights the differing opinions within TIC.

Yet despite the lack of an official comment from TIC, perhaps the most blatant hint of waning support for the Melbourne event comes from recent reports that Paccar Australia (Kenworth and DAF) and Isuzu Australia have rebooked space for next year’s Brisbane Truck Show.

It is, after all, no secret that the chiefs of both companies have been powerful proponents of TIC’s dubious bid to end the reign of the Brisbane Truck Show as the Australian trucking industry’s most successful event.

 

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