UD Trucks Southern Africa is to launch a new commercial vehicle brand into the southern African market later this year or early next year, resulting in “quite substantial” investment in its assembly plant in Rosslyn and the doubling of its workforce.
Jacques Carelse, the managing director of UD Trucks SA, said yesterday that the company was still investigating the investment required in its plant and declined to provide any estimate other than that it would be “quite significant”.
The company was previously known as Nissan Diesel South Africa and changed its name in February 2010.
The company did not yet know the level of semi-knocked down (SKD) components in the kits it would be importing and its investment depended on the level of SKD and whether shipments came directly from one source or from different sources, he said. There was a higher investment requirement if it came from different sources, “but I think it will be quite substantial”.
Carelse added that its plant in Rosslyn had an annual capacity of about 6 000 units and it would be making adjustments to the plant and probably increase its annual capacity to between 8 000 and 9 000 units.
He confirmed the increase in production capacity would create new jobs at the plant, adding it had about 150 full-time employees working in the plant, but with the production of the Quester range from early next year and the introduction of the new brand “I think we will most probably be able to double that figure”.
He said the parts distribution centre in the plant would be moved to a centralised centre within the group to provide sufficient space for it to assemble the Quester range and the new brand.
He stressed the new brand would fall under the UD Trucks stable but wear a completely different badge and be distributed through UD Trucks’ independent dealer network.
Carelse said the performance of the domestic truck market surpassed all expectations last year, with sales increasing year on year by 11 percent to 30 936 units despite a number of challenges posed by the local political and economic environment.
All segments in the commercial vehicle market with the exception of buses showed year-on-year growth in sales last year.
He attributed the 7.8 percent decline in bus sales to 1 046 units largely to timing issues because of delays in the roll-out of a number of key municipal bus rapid transport projects.
He said fast-moving consumer goods and daily commodities were the main drivers of sales, contributing 55 percent to the growth of the truck market last year.
Construction, traditionally a low-volume contributor to truck sales, experienced a very high growth rate on the back of a number of strategic infrastructure projects, and accounted for 39.05 percent of the industry’s growth last year, he said.
UD Trucks retained its fourth position in the truck market last year and was once again the top-selling heavy commercial vehicle brand with a 24 percent market share.
Rory Schultz, UD Trucks SA’s general manager of corporate planning and marketing, said South Africa’s failure to generate faster growth was problematic and could cause some significant challenges for the local truck market this year.
The depreciation in the value of the rand was also expected to have a negative impact on truck prices, but sales in all commercial vehicle segments were still expected to rise.