Prime Mover Magazine


Resilient Light Duty segment buoys declining truck sales

The Truck Industry Council (TIC) has noted the impacts of the global pandemic on May truck sales across the market but it was not all bad news.

Long lead-times in truck orders, once the order, build, fitments and registeration are factored in, have helped insulate sales figures initially.

That period of adjustment now appears to be over with most new truck segments no longer asymptomatic of the economic effects COVID-19 had in Australia during May.

The New Heavy Duty segment was hit hardest with truck sales down by almost 40 per cent over the May 2019 result.

Just as the total heavy vehicle truck market had decreased 26.3 percent in May when compared with the same month last year, the result was better than expected due to a resilient Light Duty truck sector that saw a decline of only 10.0 per cent for the month.

Year-to-date the entire heavy truck market trails the end of May 2019 sales by 20.2 per cent.

Despite the plummeting sales, the TIC has observed that 2020 is still ahead of what it calls “the worst sales on record”, with May 2009, 2010, 2011 and 2014 sales in the post Global Financial Crisis era, worse than those of May just gone.

Heavy Duty sales were significantly impacted in May with only 756 heavy truck deliveries, down 37.6 per cent (-456 trucks) over May 2019.

Year-to-date the Heavy segment has recorded only 3,785 sales, down 26.3 per cent, some 1,349 fewer HD sales to the same point in 2019.

The Medium Duty segment that bore the brunt of the current economic slowdown in April, down 29,9 per cent, witnessed a May result that was a mirror image of April, with only 515 MD truck sales, down 29.8 percent (-219 trucks) over May 2019.

Year-to-date the Medium truck numbers are only slightly better and only because of reasonable sales in the first quarter of 2020, the MD segment is now trailing the same period last year by 20.5 percent, -611 trucks.

To date a total of only 2,368 Medium Duty trucks have been sold in 2020.

The Light end of the market again saw mixed results, with Light Duty trucks performing the best of any segment in May, while Light Duty van sales continue their poor performance.

Light Duty truck sales (trucks between 3,500 kg and 8,000 kg GVM) totalled 899 for the month of May, down 10.0 per cent (-100 vehicles) over the May 2019 result.
Year-to-date the LD truck segment is tracking lower, but sales remain quite consistent month to month, down 13.5 per cent (-572 trucks).

A total of 3,672 Light trucks have been sold year-to-date in 2020 the TIC confirmed.

It was another poor month for Light Duty van sales (vans with a gross vehicle mass between 3,500 kg and 8,000 kg) with May being a long way from the start of the year, where the Van segment outperformed all the other heavy vehicle segments.

A total of only 451 Vans were sold in May. This represents a fall of 26.2 per cent over May 2019 (-160 Vans). While the year-to-date end of May result is a little better at -18.6 percent, mainly due to those solid January and February sales.

Only 2,003 Van have been sold in 2020, that is 457 fewer Light Duty Van sales than in 2019.

Truck Industry Council CEO Tony McMullan noted that the May Heavy and Medium Duty sales numbers followed the script of economic downturn now hitting many sectors of the Australian economy.

"Light Duty Truck sales are better than expected and that result may be a reflection on the $150,000 instant asset write-off put in place by the federal government," he said.

"Though it is interesting to note that Light Duty Van sales are not responding to this incentive, as the Van segment continues to decline after opening the year with strong sales in January and February," said McMullan.

"Whilst on the point of the federal government’s $150,000 instant asset write-off, the Truck Industry Council welcomes today’s announcement by the government to extend this incentive until the 31st December 2020.

"TIC met with Ministers McCormack and Buchholz during May calling for the incentive to be extended. We are pleased to acknowledge the strong representations of both Ministers who took TIC’s call for the extension direct to the Treasurer meeting with success.

"TIC has also called for specific incentives to support the Medium and Heavy truck segments, with the release of these May sales figures offering proof that these segments are floundering under the current economic climate created by COVID-19. I again seek support from the Australian government to provide stimulus that will assist the entire heavy vehicle sector as we move to rebuild our economy over the coming months and years.”

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