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Prime Mover Magazine

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Phil Taylor

What does the data show?

August 2017

Each month the Truck Industry Council (TIC) publishes new truck sales information for use by government organisations, the Australian trucking media and TIC’s own members. This data is distributed under the banner of T-Mark, TIC’s brand name for the truck sales numbers. I have commented in the past that month-to-month changes in sales are not particularly volatile, largely because the road transport industry is an essential and stable sector of the Australian economy and the size of the country’s freight task does not change on a day-to-day basis. Of course, there are seasonal trends that require additional freight movements in specific sectors, such as the harvest seasons in the agricultural districts, or more generally the Christmas rush as we all gear up with presents and festive season foods for friends and family, but these trends don’t typically impact new truck sales. There are, however, some year-in, year-out trends that do affect new truck sales such as the increase we see leading up to the end of the financial year. This information is important for planning and stock control management.

It is, however, the long-term trends that are of most interest to both government and TIC members, as these can be useful indicators of the strength, or otherwise, of our economy, and these movements can significantly affect the model mix and product planning strategies of truck manufacturers. We know, for example, that there is a direct correlation between new truck sales and the age of the Australian truck fleet. When sales are strong we see a renewal of parts of our nation’s truck fleet, bringing safety, health and operational advantages. Such change can be derived from T-Mark data.

So what trends does the data currently show? Well back in the year 2000, light-duty (LD) trucks accounted for 36 per cent of the market, heavy-duty (HD) trucks just over 29 per cent, 28 per cent of sales were for medium-duty (MD) trucks, and heavy-duty vans (HDVs) made up less than seven per cent of the total market. In 2006, HD trucks outsold LD trucks in Australia for the first time, becoming the largest segment in our market and this continued unchallenged for ten years. However by the end of 2016 the segments looked like this: HD truck sales were down to 30 per cent, now overtaken by LD truck sales at 32.4 per cent, MD trucks had fallen to 21 per cent, while HDV sales had grown significantly to represent just over 16 per cent of heavy vehicles sold.

At the halfway point of this year, solid and increasing HD truck sales had closed the gap with LD trucks, 31 to 32 per cent respectively, while MD truck sales had slipped to 20 per cent and HDVs were up to 17 per cent. Strong sales at the lighter end of the market in LD trucks and HDVs should not come as a great surprise to anyone – fuelled by online shopping trends, consumers’ expectations are that goods and services will be brought to them, rather than the more traditional behaviour of in-store shopping. There is no doubt that this is one trend that will continue.

At the heavy end of the market the data shows that truck sales are historically more cyclic than in any other segment, with the peak of each cycle occurring on average every seven to eight years. The last peak was in 2012 and since then we have seen year-on-year falls, until 2017, where we have seen the sales of new HD trucks pick up considerably, possibly building to a market peak in 2019 or 2020, just as the data would predict. The predictable nature of HD truck sales could be due to a number of factors, however the most likely explanation is the high number of kilometres travelled by a HD truck each year, its viable financial life reducing the older it gets. Maintenance and running cost increase as the truck ages, with many seven- to eight-year-old prime movers having clocked up as many as two million kilometres. At this stage it is more economical to replace the truck, rather than repair it. As these new trucks enter into service they bring with them the latest technologies, leading not only to a younger national truck park, but the associated safety, environmental and productivity benefits that only a new truck can offer to our society and economy.

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