The Truck Industry Council (TIC) said an increase in final mile demand may have a positive impact on the light duty segment, and vehicle stocks in the country are good, despite a year-on-year decline in new truck sales for Q1 2020.
All segments reportedly recorded double-digit percentage losses compared to March 2019 results.
The results for the first quarter of 2020, according to TIC, reflects a downward trend which may see a continued slowdown of sales as the effects of the Covid-19 pandemic "rock not only business confidence, but the very ability for many organisations to conduct business activities".
Heavy duty sales "bore the brunt" of the decline with 862 trucks sold in March, down 28.2 per cent (-334 trucks) on March 3019.
The first quarter 2020 heavy duty trucks sales result of 2,220 units was reportedly worse than the immediate post Global Financial Crisis (GFC) slump of 2011 to 2014 where sales for the opening quarter typically reached 2,300 sales or greater.
Similarly, the medium duty segment was down 20.7 per cent with only 526 sales recorded – down 137 medium duty trucks compared to March 2019 sales.
"Medium duty numbers for the first quarter," the TIC reported, "faired a little better due to a solid start in January, followed by modest numbers in February. Year-to-date the Medium truck segment trails the same period last year by 13.0 percent, -215 trucks. A total of 1,436 MD trucks have been sold so far in 2020."
TIC has speculated that last mile delivery demand and Federal Government tax write-offs helped boost light duty truck sales. The tax incentive was reportedly not effective for larger trucks due to their greater cost.
Light duty truck sales (trucks between 3,500kg and 8,000kg Gross Vehicle Mass – GVM) totalled 811 for the month of March, down 13.8 per cent (-130 vehicles) over the March 2019 result. To the end of the first quarter, 2,067 light trucks have been delivered, a decrease of 14.1 per cent over the 2019 quarter one result, that amounts to 339 fewer light truck sales so far in 2020.
Light duty van sales (vans with a GVM between 3,500kg and 8,000kg) started the year better than any other segment, however sales fell away somewhat in March. A total of only 416 vans were sold in March, this represented a fall of 17.8 per cent over March 2019. The year-to-date end of March result is better, with 1,182 van sales, down only 12.2 per cent for the year. That has the light duty van segment tracking 164 sales lower in 2020 when compared to the first three months of 2019.
“The new truck market in Australia was already tracking down in 2020 before the global rise of Covid-19 over the past few weeks and there is little doubt the worst is yet to come for our economy generally as well as for truck sales," said TIC CEO, Tony McMullan.
"The further decrease in sales that we have observed in the heavy and medium segments in March may well be the onset of this economic downturn, though most sales in March would have been set up in the preceding months with trucks delivered against existing customer orders.
"I believe that possibly April sales, but particularly May and June numbers will give a better indicator of the, no doubt, tougher times ahead.
"However, for those wishing to purchase a new truck, I am assured by all Truck Industry Council members that it is business as usual, or as usual as it can be given the required social constraints, that vehicle stocks currently here in Australia are good, that any closures of local truck manufacturing facilities will be brief and ongoing supply of trucks should not be affected in the foreseeable future."