Volvo used to sell 800 heavy trucks a year in Angola, but sales have slumped to only about 30 units since the start of the year. Picture: Supplied
Volvo used to sell 800 heavy trucks a year in Angola, but sales have slumped to only about 30 units since the start of the year. Picture: Supplied

Currency devaluation puts heavy load on trucks

By Roy Cokayne Time of article published Dec 9, 2015

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Johannesburg - Currency devaluations in some oil-dependent countries in southern Africa have led to an almost overnight total collapse of the heavy-truck market in those countries.

Torbjörn Christensson, the president of Volvo Group Southern Africa, said it used to sell 800 heavy trucks a year in Angola, but sales had slumped to only about 30 units this year.

“The South African heavy-truck market has declined by about 6 percent this year. But in Angola we are fighting over the 6 percent of the market that is left,” he said.

However, Christensson contrasted the market environment in Angola with Ethiopia, which he described as the fastest growing economy globally in terms of gross domestic product (GDP).

Christensson said the Volvo Group had just secured a single deal in Ethiopia for 2 000 heavy trucks and indicated the group remained optimistic about the growth in heavy-truck sales into southern Africa.

The heavy-truck brands represented by Volvo Group Southern Africa include Volvo, UD, Renault and Mack.

Growth outside SA

Christensson said Volvo sold about 7 000 trucks into the area it was responsible for, with about 5 500 of those sold into the South African market.

He said its sales outside South Africa had for several years accounted for about 10 percent of its total sales in the region, but had now increased to 15 percent of total sales.

“Our plan is for 70 percent of our sales to be in South Africa and 30 percent outside South Africa. The growing part is outside South Africa.”

Combined sales figures released by the National Association of Automobile Manufacturers of SA, Associated Motor Holdings and Amalgamated Automobile Distributors revealed the strong recovery in the South African commercial vehicle market continued last month for the fourth consecutive month, growing 8.9 percent year on year to 2 976 units.

Christensson said the recovery was even more impressive when looking only at the heavy, extra-heavy commercial vehicle and bus segments, which last month achieved 16.4 percent year-on-year growth.

He said the biggest recovery was in the extra-heavy segment, which grew year on year by 23.6 percent to 1 245 unit sales while the heavy commercial vehicle market grew by 9.4 percent to 591 units.

Medium commercial vehicle sales fell by 3 percent to 1 028 units and bus sales dropped 11.8 percent to 112 units. Although there has been a significant recovery in the extra-heavy segment, year-to-date sales at 12 476 units are still 2.8 percent lower than last year.

Sales of medium commercial vehicles are 4.9 percent lower at 10 024 units a year to date, while bus sales have declined by 10.6 percent to 1 017 units.

Christensson said the heavy commercial vehicle market was still outperforming the rest of the market on a year-to-date basis and had grown by 1.8 percent to 5 080 units.

But he attributed the strong growth last month in some segments of the commercial vehicle market to a few deals inflating sales for the month.

“There might be some buying now… but when we conclude the year, the market will be about 5 percent down.

“The underlying need for transport is more going down than going up. But if you look at south-east Africa sales outside South Africa, it is becoming strong,” he said.

He believed the commercial vehicle market next year would be flat and tough because the world economy was unlikely to improve much.


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