Total Australian truck sales for the first six months of 2013 registered 15,074 units, reports the Truck Industry Council (TIC).
This is the best result since the record first half established in 2008, just prior to the Global Financial Crisis. Despite this achievement, sales growth in the second (April to June) quarter was slower than in the first quarter of 2012, consistent with media reports that a number of Australian businesses have put their cheque books away until the result of the forthcoming federal election is known.
When looking at the half-year results to June, all segments have recorded an increase compared with 2012, with the Heavy Duty and Medium Duty segments showing the highest gains overall. The Heavy Duty segment continues to build on the strong growth level achieved in 2012, with a 6.45% gain to the end of June (total so far of 5,414 units), despite June 2013 recording a slight (5.5%) drop compared to June 2012. The HD segment is now just over 500 units short of the tally achieved in 2008.
Whilst it remains to be seen whether Heavy Duty segment sales will continue their trend into the second half of the year, a consistent surprise has been the rebound in the Medium Duty segment. For the half year, MD trucks have grown more than any other segment, posting a 7.6% gain on the same period in 2012, and defying a previous longer term trend of a decline in the segment. The Light Duty segment and Light Duty Vans segment have recorded more modest increases for the first half of 2.1% and 4.3% respectively.
It is generally accepted in the industry that difficulties experienced by many fleets in obtaining credit for new capital purchases in the three or more years following the GFC are behind us. Financiers have been offering very low interest rates on more favourable terms than we have seen in recent years. Accordingly, this is allowing some truck operators to update their fleets, despite uncertainty from the key indicators in the economy. The well-reported slowing down of the 'construction phase' of the mining and resources boom, transitioning to the 'production phase', appears to be leading to reduced demand from that particular sector. However, continuing positive indicators for both residential and commercial property construction should lead to renewed capital equipment being required for that sector, including trucks.
Market segments
The Light Duty Truck Segment for June recorded sales 13.7% higher than June 2012, giving a half year tally of 4,385 units, up 2.1% on the 2012 figure. Improvements in recent months have overcome a relatively slow start to the year for this segment.
The Medium Duty Truck Segment has now demonstrated a consistent reversal in its long term fortunes for the past 12-18 months. The June 2013 total of 717 units was 4.4% higher than for June 2012, and when we compare first halves, the 2013 result is 7.6% higher than for 2012.
The Heavy Duty Truck Segment has been on a relative growth spurt since 2011, reversing much of the sharp decline experienced in 2009 to 2010. Given that first half 2012 recorded a 20.6% growth over the first half 2011, the 2013 first half gains of 6.5% over 2012 are a strong result. For June, however, the segment displayed a 5.5% drop compared with June 2012. One month does not set a trend; it will be interesting to monitor what this segment achieves in the third quarter of 2013. The 2013 first half tally is now just 8.9% short of the record HD segment result set in 2008.
The Light Duty Van Segment has bounced back quite well from a lacklustre start , with a June 2013 figure of 417 units, which is 17.8% growth over June 2012. The 2013 first half showed 4.3% more units than the same period of 2012, for a total of 1,894.
TIC chief executive officer Tony McMullan said he was hopeful that the second half of 2013 will not stagnate while the nation waits for an election outcome.
"The 2013 first half Australian truck sales results reflect steady growth for the truck market that began in 2011, after two years of post-GFC turmoil. Whilst all segments are now showing growth over the first half of 2012, the Heavy Duty and Medium Duty truck sales continue to outperform the others, although recent gains at the lighter end of the market show them to be catching up.
"It is well documented that Australian businesses do not make unnecessary investments during an election campaign, and we have certainly experienced an eventful year in federal politics so far. Australian truck suppliers and their customers will maintain a close watch on both international and domestic economic conditions in the second half of 2013.
"If non-resources sectors can recover in the next few months, truck sales will follow. By contrast, if a decline in international demand for Australian raw materials is experienced, without a concurrent upturn in domestic activity, we may see truck sales taper off towards the end of the year. Whilst overall truck sales growth of 5% through to June is as expected, it is hard to predict what the gain through to the end of the year will be," Mr McMullan said.
Light Duty Truck: cab-chassis type vehicles with Gross Vehicle Mass of 3,501 kg to 8,000 kg inclusive. Medium Duty Truck: cab-chassis type vehicles with Gross Vehicle Mass of greater than 8,000 kg, but with a Gross Combined Mass up to and including 39,000 kg. Heavy Duty Truck: cab-chassis type vehicles (both rigid and prime mover application) with three or more axles, or two axles, a Gross Vehicle Mass greater than 8,000 kg, AND a Gross Combined Mass of more than 39,000 kg. Light Duty Van: enclosed van (non-passenger carrying) vehicles with Gross Vehicle Mass of 3,501 kg to 8,000 kg inclusive.
