Slow Start to 2016

The New Year has got off to a stuttering start for the truck industry with low numbers all round. According to the latest sales figures released by the Truck Industry Council, the total Australian truck market for January 2016 reached just 1,584 units, down 1.9 per cent on the first month of 2015, which in turn was down seven percent on January 2014 sales.

 

In fact, according to the TIC, it is the worst start to a year seen for the past five years. In 2011 only 1,317 new trucks were sold in January, however this was at a time when Australia’s economy was still struggling in the years following the GFC.

 

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The result for the Heavy Duty truck segment was the worst with only 438 units sold, down 15.3 per cent, or 79 units, on the first month in 2015, which in turn was down 12.9 percent on January 2014. Compared with the record pre-GFC January of 2008 where 841 trucks were sold, this result is down by almost 50 per cent. It was this particularly poor result in the heavy truck segment that dragged the market to its five year low.

 

Looking at the other segments the news was more positive. The Medium Duty segment was up with 350 trucks sales for January 2016 versus 336 units sold in January 2015, a gain of 4.2 per cent. Light Duty trucks too were in positive territory up 4.7 per cent with 470 deliveries for the month, this compares to 449 sales for the same period in 2015.

 

The Light Duty van segment was up in January for the fourth consecutive year. For the month a total of van sales were 326 were sold, up 4.5 per cent, or 14 vehicles. This represents the best ever start to a year for the van segment, beating the previous best ever January result that was set last year.

 

“It is another disappointing start to a new year for truck sales and the momentum of the latter part of 2015 has obviously not carried through to 2016,” said Tony McMullan, CEO of TIC. “I do take heart in the fact that medium and light truck as well as light van sales were all up compared to January 2015, however the continuing fall in Heavy truck sales continues to be my greatest concern when reviewing these results.

 

“In 2015 we saw a slow start for new truck sales, but by year end the market was higher in all segments except heavy truck, so we will be hoping for stronger sales over the coming months. However unlike last year we face an important political event this year and given the fiscal caution that is typically exercised by many businesses in a federal election year, we will have to wait and see if truck sales do in fact build as the year progresses.”

 

December Rebound

Truck sales figures for some market segments showed a sharp increase in December, to end the year on a positive note. According to the latest figures released by the the Truck Industry Council, the total number of trucks and large vans sold in Australia in 2015 was 32,003 units, up 1,373 units over 2014. The overall figures reflected the yearlong trend seeing healthy sales at the bottom end of the market with van and light duty truck sales, whilst heavy duty sales continued to struggle throughout the year.

 

However, December saw a significant blip in heavy duty sales numbers, with 1011 trucks sold, compared to the average of 808 per month, recorded in the previous 11 months. This increase also put a new name in the number one slot for monthly heavy duty truck sales for the first time in many years. Kenworth slipped to second with 153 truck sales, behind Volvo, who put out 184 in the same month.

 

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On a yearly basis, Kenworth still dominate the heavy duty space, with 20.4 per cent of the market and consistently strong numbers throughout the year. Another strong showing by Scania, 132 heavy duty trucks sold in December, brought the Swedish truck maker’s market share up to 7.1 per cent, an unprecedented number in annual figures.

 

In fact, December truck sales were strong all round. The total number of trucks sold, 3070, was the second best December for sales on record, only eclipsed by, the pre-GFC, December 2007, when 3,509 were sold.

 

This strong showing in December is in stark contrast to the whole year’s results. With 9,895 heavy duty trucks sold in 2015, it is the first time in five years that the heavies did not break through the 10,000 units mark and were down 25.8 percent, on the segment peak of 2007. Market share in this segment was 32.3 per cent, down from a high of 37 percent just three years ago.

 

“In all the 2015 finish is about what we expected,” said Tony McMullan, TIC CEO. “Business confidence continues to be low when it comes to the high dollar investments that are required to purchase new heavy trucks, while companies obviously feel more comfortable with the smaller outlays required to upgrade the light end of their vehicle fleets.

 

“We can only hope that the renewed sales confidence shown by transport businesses in the light truck and van segments will carry over into the heavy truck segment in 2016. With the strong December 2015 result, albeit biased still to the light end of the market, a positive sign is that business confidence continues to grow and we will hopefully see this trend continue into 2016.

 

“Of course we face a federal election year this year and I note that in past election years we tend to see business taking a cautious approach to new investments, particularly larger dollar expenditure.”

 

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2015 marked the 27th year in which Isuzu was the number one selling truck brand in Australia. The 7442 units sold in 2015 represents 23.3 per cent of the total market. Isuzu came third in heavy duty sales, with 12.2 per cent market share and number one in medium and light duty, at 40.8 per cent and 35.4 per cent market share respectively.

 

“As many in the industry are aware, 2015 was quite a patchy year for truck sales,” said Phil Taylor, Isuzu Director and COO. “After a slow start in January and February the market began to pick up and held form through to the close with December showing the second best results for the year. This augurs well for an encouraging start to 2016.

“We are, of course, delighted to be in a strong position again at the start of 2016, and we owe it to our customers for their continued support. We have had some great product news stories recently. The launch of our intelligent new N Series last year with its comprehensive safety package, broadened model choice and with particular variants benefitting from impressive power and torque increases represented another high-water mark in the light truck market.”

“Our twin-steer FY range continues to break into new segments of the heavy market, we are seeing strong demand across other vocational applications following our successes with agitator work with these models. We are also building toward the very exciting launch of our new medium-duty product, set for next month.”

Light duty van sales achieved record numbers for the year, at 5515 sold. This is 20.4 per cent up on 2014. These unprecedented figures have seen the light duty van segment rise to become 18 per cent of the total market, compared to 11.6 per cent ten years ago.

Renault LCV drives van market in 2015

One of the newer brands capitalising on this increased demand for vans has been Renault. The French van maker joins Mercedes Benz at the top of the sales charts. Benz still retains 43 per cent of the van segment, with Renault at 24.7 per cent. Fiat and Ford are the other serious players in they segment with 11.1 and 11.9 per cent market share respectively.

 

New Truck Push in Canberra

The Truck Industry Council (TIC) has says it applauds the support given to it by the Senate Economics Committee. The TIC represents Australia’s truck manufacturers and says it has received rousing cross-party support for its presence in Australia and strategic policy ideas during a Senate Economic References Committee hearing.

 

“It was a very constructive dialogue with senators Bushby, Carr, Ketter, Muir and Rice, where we felt that truck manufacturers were being recognised for the first time for their presence in Australian commerce,” said Tony McMullan, TIC CEO.

 

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The TIC points out Australia has three truck manufacturers, Volvo Group Australia, Paccar and CNH Industrial. These three are designing, engineering, testing, developing, and manufacturing trucks, under the Kenworth, Volvo, Mack and Iveco brands, without Federal Government assistance.

 

“Truck manufacturing in Australia is a good news story,” said McMullan. “We have been manufacturing trucks here since the early 1950s and the total is now above 340,000 vehicles.

 

“In every case their local content by value exceeds their imported content. Last year 48 per cent of the heavy trucks (above 16.5 tonne GVM) were designed and manufactured in Australia with an average sale price in excess of $200,000. This strength is showing no signs of abating.”

 

Senators were advised, by the TIC, of an alternative policy option to ensure Australia continues to engage in advanced manufacturing.

 

“There is a strategic imperative for Australia to have a more modern, productive, safer, cleaner and greener truck fleet,” said McMullen. “Simply put, Australia has an old truck fleet, with an average age of 14.8 years. About 30 percent of vehicles, or 175,000 trucks, were manufactured before 1996 which means they pre-date any Australian exhaust emission laws or regulations.

 

“Today’s trucks are 60 times cleaner in exhaust emissions than one pre-1996 truck.”

 

According to the TIC, there is much to be gained from a program to modernise the Australian truck fleet through the provision of investment allowances, funded from a reprioritisation of the Fuel Tax Credit Rebate Scheme and tailored to emission levels.

 

The TIC estimates an additional 3,300 trucks could be manufactured in Australia every year for five years, a 66 per cent increase in local production providing a stimulus to Australia’s future automotive industry.

 

Heavy Truck Sales Still Down

The heavy duty truck market continues to be sluggish as lighter trucks still maintain good numbers. Figures released by the Truck Industry Council (TIC) as part of its T-Mark truck market sales database, show truck sales trends continue on a steady course, with some exceptions.

 

 

Total Australian truck sales for the first nine months of 2015 were 23,388 units, or 4.8 per cent above the tally achieved for the same period in 2014. The growth shown this year was mirrored by the individual month result for September with growth over September 2014 of 4.4 per cent. The third quarter of this calendar year was also 3.6 per cent higher than third quarter 2014.

 

 

However, according to the TIC, growth in the 2015 market has come from the light end with Light Duty truck and van sales up significantly, Medium Duty sales are up slightly, while Heavy Duty truck sales continue to decline. This was again the trend seen in quarter three.

 

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The July to September quarter saw total T-Mark sales of 8,248 units, this was 296 units more than for the third quarter of 2014. The Light Duty Truck Segment for September posted the best result of all sectors, recording a sales rise of a very healthy 21.8 per cent over the September 2014 result, and providing a 9-month tally of 7,113 units, a gain of 11.6 per cent on the same period for 2014.

 

 

In Medium Duty there was slight growth in September 2015 with monthly sales of 622 units, 3.0 per cent higher than September 2014. This was also a bumper month for Hino in this segment, with the Japanese truck maker running Isuzu close just ten truck behind for the month at 235 medium duty sales.

 

 

There were 893 heavy duty sales for the month, 1.9 per cent lower than September 2014. TIC says heavy duty sales year-to-date remain are much weaker than for 2014, down 7.0 per cent to the end of September. The nine-month 2015 tally came to 7,221 units, which is the worst result since 2011.

 

 

The Light Duty Van Segment has outperformed all expectations this year, however sales cooled somewhat in September with sales of only 435 units, down 9.2 per cent on September 2014. However year-to-date the van market remains very strong up 22.8 per cent over the 2014 market and the third quarter result of 1,316 unit sales is an all-time third quarter record for the segment.

 

 

TIC Chief Executive Officer, Tony McMullan, is hopeful that the new Prime Minister and the new Coalition cabinet will be the catalyst for renewed business confidence and the capital expenditure required to kick start growth at the top end of the truck market. Translating into improved Heavy Duty truck sales late in 2015 and 2016.

 

 

“The July to September quarter was very much a repeat of the sales results we have experienced throughout 2015,” said McMullan. “The market is up over that of 2014, however the growth has been at the light end of the market in the Light Duty truck and van segments. Medium Duty truck sales are up slightly, however Heavy Duty truck sales continue to wane and this is of great concern to myself and the industry as this will result in an ageing of the heavy truck fleet in Australia.

 

 

“I hope that our new Prime Minister and his revised cabinet will consider financial incentives, such as those outlined in TIC’s National Truck Plan and provide the necessary business confidence for transport companies to make the larger dollar capital investment decisions that are required to renew their Heavy Duty truck fleets and in doing so move Australia towards a younger, safer, environmentally cleaner and more productive national truck fleet.”

Truck plating initiative

A joint project by theNational Heavy Vehicle Regulator and the Truck Industry Council is designed to create a more secure heavy vehicle sales process. The TIC Code of Practice (for Heavy Vehicles) Manufacturers Plate is a new idea developed in collaboration with the National Heavy Vehicle Regulator (NHVR).

 

 

The scheme for truck original equipment manufacturers (OEMs) aims to identify when a heavy vehicle has had further work undertaken to a base vehicle by the OEM, as opposed to an aftermarket supplier. The new Manufacturers plate enables the original equipment manufacturer of a heavy vehicle to identify the fact it completed the vehicle under its own manufacturing and quality processes, as part of their Identification Plate Approval (IPA) authority, without the need for certification by the NHVR.

 

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“Under the Heavy Vehicle National Law (HVNL) any equipment fitted, or modification undertaken to a vehicle after it is deemed to be complete (IPA fitment date) requires NHVR approval and affixing a modification plate, identifying the type of modification and when it occurred”, said Geoff Casey, NHVR Executive Director, Productivity and Safety.

 

 

“The Manufacturers plate/label clearly establishes that the body and/or equipment fitted to a vehicle is by the original equipment manufacturer and that certification by the NHVR is not required for any J code (body mounting) and P code (tow coupling, fifth wheel and king pin installation) modifications that occurred during this process.”

 

 

According to the TIC’s Chief Technical Officer, Mark Hammond, the Manufacturers Plate solves industry uncertainty about the definition of when a heavy vehicle is complete in the Commonwealth Motor Vehicle Standards Act and modification certification requirements under the Heavy Vehicle National Law.

 

 

“Under the TIC Code of Practice (for Heavy Vehicles) Manufacturers Plate, affixing a Manufacturers plate/label clearly identifies the equipment fitted by the original equipment manufacturer over and above the base cab/chassis”, said Hammond said. “This clearly identifies that the equipment fitted has been undertaken by the original equipment manufacturer and not a third party. It lets dealers, operators and heavy vehicle inspectors easily identify whether additional certification is required.

 

 

“TIC worked closely with the NHVR in developing a code of practice that would work for industry and we have received agreement from all Australian based truck manufacturers and distributors to participate.”

 

 

Further information about theTIC Code of Practice (for Heavy Vehicles) Manufacturers Plate can be found at  the TIC website. http://www.truck-industry-council.org/res/file/TIC%20COP%20Maunfacturers%20Plate%20-%20OEM%20Build%20Status(13Jan2015).pdf

 

 

Further information about J and P Code modifications can be found at the NHVR website. https://www.nhvr.gov.au/safety-accreditation-compliance/vehicle-standards-and-modifications/heavy-vehicle-modifications

Back on track

The latest truck sales figures show the industry clawing its way back from a very slow start to 2015. The numbers for April, released by the Truck Industry Council show the figures recovering from the doldrums of January and February.

 

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2015 now looks like it will be a similar year to both 2013 and 2014 where numbers remained relatively static, without the prospect of either strong growth or precipitous decline. Earlier this year there was some pessimism in the air and the figures reflected this. Now, the Australian trucking industry seems to have returned to its default setting of cautious optimism.

 

 

In overall truck sales in April, the sales numbers look very much like a return to normal. All of the brands managed to hold their own and consolidate their position. Isuzu, as ever, picked up a small bit of market share overall.

 

 

In the heavy duty segment, it’s business as usual for Kenworth, with 166 sales and clear market leadership. However, overall numbers for the year are down for the Paccar brand, numbers should pick up later in the year to compensate.

 

 

Much of Isuzu’s improvement in market share comes from the medium duty segment, with the percentage going up to nearly 43 per cent for the month. This has the effect of getting the overall 2015 figures closer to the 40 per cent mark.

 

 

The light duty sector has returned to a much more normal setting, with Isuzu back to market leadership, after conceding number one status for March to Hino. The hangover effect for Hino, after the blip in sales, saw the brand drop below Fuso and slip into third place in the sales figures for April, while still retaining second overall for the year.

 

 

A little volatility was on show in the van market for April, with Renault picking up a few extra sales to get to 148 for April and boosting its market share for the year, while remaining a clear second behind market leader Mercedes Benz.

March sales pick up

Truck sales figures from the Truck Industry Council show a a sharp rise in overall truck sales in March. Some optimism seems to be appearing in parts of the transport industry as overall truck sales figures pick up in sections of the market.

 

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Of the 6615 trucks sold already this year, 2893 were sold in March. This reflects the slow start to the year in truck sales, as well as the clear spike in numbers in March. However, the rise in sales has been patchy, with some segments of the market doing much better than others.

 

The lighter end of the market did much better than the heavy duty segment. In fact, the figures for the over 15 tonnes GVM truck market remain quite static, with truck sales still lacking the buoyancy they have maintained through the last few years.

 

In terms of overall numbers for the years so far, there have been some winners and losers. Isuzu’s figures are down, while those of those of its nearest rivals, Hino and Fuso are up, when compared to the results in the first quarter of last year.

 

All through the brands the message is a mixed one, with some manufacturers clearly out-performing last year, and others dropping well below the sales for 2014. The wide variation in performance seems to reflect the feeling in the market, generally. There is some uncertainty about the economic climate, but, for some, there is plenty of work and new trucks are needed.

 

In the heavy duty market, both Kenworth and Volvo have started the year well. The rest of the heavy duty market, behind these top two, are recording lower figures than those last year. Only Fuso and Dennis Eagle buck this trend recording sales slightly above the 2014 result for the first quarter.

 

For medium duty trucks sales, it is very much business as usual with sales closely matching those from last year. Market share has also remained reasonably constant in this segment of the market, apart from Hino who has seen a blip in numbers to come in a close second, just seven behind Isuzu, in March medium duty truck sales.

 

The blip for Hino is even more pronounced in the light duty truck market. The Japanese importer nabbed first place in the sales figures from Isuzu, by a margin of six, in the numbers for March. This may well be the first time Hino have been in this position since the introduction of the Dutro model at the beginning of the century.

 

“It is encouraging to see a good result in March, however the result was brought about by some very good Light Duty Truck sales and some exceptional Light Duty Van sales, while Heavy Truck sales continue to decline,” said Tony McMullan, TIC CEO. “It must also be remembered that year-to date overall sales lag those of 2014, so the market is still weak.

 

“I am particularly concerned that Heavy Truck sales are showing no sign of recovery and this probably indicates the lack of business confidence in the Australian market at present. It appears that companies are simply delaying their big dollar fleet replacement plans.”

February numbers pick up

The latest truck sales figures do not reinforce the pessimism of those earlier in the year. The Truck Industry Council has released the latest truck sales figures for February and appear to show confidence recovering in the trucking industry. The numbers of trucks sold in February are not going to break any records, but they do show a return to average sales in all market segments.

 

January trucks sales figures were looking ominous for all truck manufacturers, but the market leaders managed to hold their own, while the smaller players lost sales. This latest set of sales results shows a return to a semblance of normality. With the buffeting in the market in recent years, the truck manufacturers are now resigned to a relatively flat market with some small level of growth.

 

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As usual, Isuzu tops the sales numbers and maintains its market share in each segment. Standing at number three in heavy duty, while holding fast to number one in both medium and light duty is a familiar situation for the Japanese truck importer. The introduction in the last couple of years of the twin steer product means the only part of the market where it is still not competitive is with the heavy duty prime mover, the company has a solution for, just about, every other specification.

 

Kenworth’s grip on the heavy duty truck market remains strong. In fact, market share, so far in 2015, is up on last year’s level, at 23.6 percent, compared to 20 per cent in 2014. Improved systems at the assembly plant in Bayswater mean the manufacturing set-up can react more quickly and efficiently to changes in demand for trucks.

 

North American rivals Western Star have managed an improvement in market share, against the trend, over last year. With the trucks being manufactured in the US, pricing is subject to a major influence from currency fluctuations. The falls in the Aussie dollar take away much of the price advantage the American manufactured product have when the dollar to dollar rate approaches parity making the Star numbers all the more surprising.

 

Medium duty numbers are down throughout the range but have recovered somewhat from a flat January. Market shares remain very similar to the past results, suggesting a general slowing in the overall demand, but no changes in the level of competition between the brands.

 

In the light duty segment of the market, all of the brands appear to have had a good February, with numbers up all round. However, this only serves to make up for a dismal January, the overall sales for the year are still down on those at this point in 2014. This points to a lack of confidence early in the year causing some to delay buying decisions, but if the sales continue as they have this last month, normality has resumed.

 

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Although the Mercedes Benz brand continue to hold the whip hand in the light duty van market, the dynamic performer in 2015 has been Ford. Van sales dipped for the blue oval brand for a couple of years, but are undergoing a bit of resurgence with 2015 sales, so far, nearly double those at the same time last year.

Truck and trailer data released

The Australian Road Transport Suppliers Association has released the latest data about the trucks and trailers registered to run on our roads. ARTSA analyse the, publicly available, data on vehicle registrations around the country, including the class of vehicle being registered.

 

Figures show prime mover new registration numbers grew 5.8 per cent in 2014, with new trailers growing at 5 per cent. Overall there were a total of 100,627 prime movers registered in Australia as of January 16 2015. This number is up 2,038 on the same time last year, the overall fleet has grown by two per cent.

 

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Overall trailer numbers went up by 7,994 to bring the total number of trailers on Australia’s roads up to 234,259. Of this number, over 150,000 are semitrailers, over 22,000 are lead trailers and 18,691 are dog trailers. The overall number of trailers rose by 3.5 per cent, showing growth in the number of trailers out on the highway rising faster than the number or trucks to pull them. This can be explained by the retirement rate of prime movers at 3.8 percent compared to a rate of 1.5 per cent for trailers.

 

A more modest rise in rigid truck numbers, saw the total go from 173,075 to 176,337, equating to a 1.9 per cent rise overall. In fact, there were 6,575 new rigid truck registrations in 2014.

 

These ARTSA figures give us a different snapshot of the trucking industry than those produced by the Truck Industry Council each month. The two roughly agree on the numbers of new registrations but, apart from that, tell us a different story.

 

The TIC figures give us an indication of the level of optimism in the industry, an operator expecting an increase in their freight task will bring in new trucks. On the other hand the numbers from ARTSA show just how much activity is actually going on in the country, if a truck and trailer are sat idle for too long, the operator will soon deregister them.

 

As a rough guide the rise in the number of trailers on the road by 3.5 per cent is probably a useful guide showing the freight task for road transport has grown at around that rate. This is the first full year these figures have been collated, so it will interesting next February, to compare 2015’s numbers with last year’s to get an even better snapshot of the trucking industry.

Slow start to 2015

The latest truck sales figures will not fill industry with confidence, echoing other news of interest rates reductions and trucking company failures. The latest figures for January truck sales have been released by the Truck Industry Council outlining the numbers segment by segment.

 

With the reduced economic activity in Australia during January, as the economy remains in holiday mode and business takes a breather, the overall sales numbers of trucks are normally below average. However, in January the overall number of trucks sold was 7 per cent below the January 2014 figure.

 

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The stronger brands like Isuzu and Kenworth managed to record similar numbers to last year, as did Mercedes Benz, which finished 2014 strongly. The rest saw varying degrees of reduction on last year’s mark.

 

One brand managed to bother the scoreboard for the first time in quite a while. Foton Trucks are now included by the TIC and recorded 7 new registrations in January, its first  recorded since, vehicle importation specialist, Ateco took over responsibility for the Chinese truck maker’s product in Australia.

 

In the heavy duty segment positions one and two are taken by Kenworth and Isuzu, so far this year. Kenworth are perennials here, but Isuzu are seeing the twin steer heavies consistently drive up market share. Freightliner also started 2015 well up on its numbers from last January.

 

Year on year the stranglehold on the medium duty sector of the market by Japanese trucks gets more and more secure. January 2015 sees the Japanese accounting for 94 per cent of sales. This leaves their European opposition to fight it out for just 20 truck sales in January.

 

The light duty truck market has been a little more buoyant in recent months, but overall numbers are down on this time last year. Fuso managed to pick up its sales in January, mainly at the expense of principal competitor brands, Isuzu and Hino. Mercedes Benz and Ford also managed to record higher sales this year than last, for January.

 

As usual, the light duty van market is counter-cyclical and recorded a 15 per cent increase, overall, on 2014. Ford, Fiat and Volkswagen made considerable gains compared to last year, recording numbers way above those they were producing at the end of 2014.