Australian sales of new trucks in July have returned to the polarising segments seen in 2014 according to the Truck Industry Council.
This trend in which Light Duty trucks and Vans enjoyed record growth continued through to 2016 in a bifurcated market where Heavy Duty vehicles sales fell over the same period year on year.
With the new Heavy Duty category languishing at levels well below 2019, the 25 per cent drop has been offset by a 3 per cent decline in Vans sales and 4.7 per cent decrease for Light Duty trucks, perhaps more than reasonable numbers given the lasting economic impacts of COVID-19.
It's worth noting both Light Duty segments posted record breaking sales for the month of June 2020.
Between 2014 and 2016, the bottom end of the market held up the overall market, while Medium Duty trucks wained and Heavy Duty Truck sales plummeted.
The intervening years since Global Financial Crisis have recorded worse sale for the Heavy Duty sector. Overall, the heavy vehicle sector is tracking 12.4 percent down year-to-date, that is 2,744 less trucks sold this year than in 2019.
Reviewing each of the segments in detail, Heavy Duty sales only totalled 782 for the month of July, down 24.4 percent (-253 units) for the month and down a corresponding amount, 23.6 percent (-1,756 trucks) on the year-to-date tally from 2019.
The Medium Duty segment results continue to sit between those of the Heavy and Light segments, losing less ground than their Heavy counterparts, however not holding as strong as the Light segments.
A total of 570 Medium trucks were delivered in July, that is down 9.8 percent (-62 trucks) over July last year.
While year-to-date the segment is performing a little worse, down 13.0 percent (-572 units) over this time last year.
A total of 3,835 Medium Duty Trucks have been sold in 2020 to the end of July.
Light Duty Truck’s continued their relatively stable run in 2020 with 989 units sold in July, down 4.4 percent for the month, (-45).
Year-to-date the percentage result is almost the same, down 4.7 percent, that equates to 308 fewer Light Duty Truck sales this year in comparison to the end of July 2019. A total of 6,244 Light Duty trucks have been sold thus far in 2020.
Enduring lockdowns and the collapse of retail has seen eCommerce sales skyrocket with last mile deliveries increasing.
Light Duty Van sales were again the standout performer in July with 550 sales, up 11.6 percent (57 vans) for the month over July 2019 results. Year-to-date Van sales are also solid with 3,559 Vans delivered to the end of July, down just 3.0 percent (-108 vehicles) over 2019. In total 3,559 Vans have been delivered to the end of July 2020.
Economic downturn and loss of business confidence as a result of the COVID-19 pandemic were key factos in retracting Heavy Duty and to a lesser extent, Medium Duty, truck sales according to
Tony McMullan, CEO of Truck Industry Council.
“Light Duty Truck and Van sales continue to be better than expected and those results are likely in reaction to the $150,000 instant asset write-off financial incentive set in place by the federal government and now extended to the 31st of December 2020,” he said.
“The new truck sector is again heading toward a 'two speed' marketplace, as we saw from 2014, through to 2016, with solid sales in the lighter segments, while at the heavy end of the market, sales are slowing noticeably. On the surface the new truck market as a whole appears to be performing reasonably well, despite the current economic climate,” said McMullan.
“However, when looking into the detail provided in the Truck Industry Council’s T-Mark sales data, heavy truck sales are suffering significantly. There are further government financial incentives available to operators wishing to purchase a truck costing more than $150,000. I am specifically talking about the COVID-19 Accelerated Depreciation incentive that allows the purchaser of a truck priced over $150,000 to claim over 50 percent of the new truck’s value back at tax time. I urge anyone considering a new truck purchase to contact their accountant for the best advice on these incentives.”