UD Trucks resets business in SA following reshuffle at Volvo Group

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Engineering News  /  November 14, 2016

South Africa’s new truck market is under pressure, with a 10% drop in sales likely in 2016, says UD Trucks Southern Africa (UDTSA) marketing director Rory Schulz.

This means the new truck market should end the year around the 25,000 mark.

The decline in the market reflects the bad fortunes of the South African economy, with almost zero economic growth expected in 2016.

Schulz says new medium and extra-heavy truck sales are “down dramatically”. Appetite in the mining and construction sectors especially has dipped sharply. The heavy truck market is, however, “very stable”. Sales in this bread-and-butter segment reflect the need for food and other basic goods to still reach the shelf.

But it’s not all bad news, says Schulz.

The economic growth experienced in 2016 is as low as witnessed in 2009, when the truck market could only notch up around 19,000 units for the year.

“We have already surpassed 19,000 units this year, so the truck market has done reasonably well,” says Schulz.

He is hopeful that the market has bottomed out, with growth of between 1.5% and 3% possible next year, largely in the second half of the year.

“This will bring us closer to 30,000 units again.”

South Africa’s new truck market stood at 22,593 units for the first ten months of 2016.

Another yearly decline in the market will follow on a 3.2% drop seen in 2015 over 2014.

Volvo Group Reshuffles

A reshuffle in the boardroom at truckmaker Volvo seems to have handed Japanese-based UD Trucks [formerly Nissan Diesel] back some of the autonomy lost when it was acquired by the Swedish group.

Volvo – which includes Volvo, Renault and UD Trucks – last year named Martin Lundstedt as its new chief executive.

“We are now a brand-focused organisation,” says UD Trucks Southern Africa acting VP Gert Swanepoel.

Pressed on what this means, Volvo Group Trucks Asia and Joint Ventures sales president Jacques Michel says Lundstedt had determined that the Volvo truck group will no longer be a multi-brand organization, but that it would rather focus on its individual brands.

“So, the organization is shifting. It is a big change compared with what we have heard before. It is good change for the UD brand.”

UD Trucks is now focused only on UD Trucks, “managing its own future”.

South Africa is UD Trucks’ biggest market outside Japan.

Swanepoel is hopeful UDTSA is now in a position “to bring its business back to the old levels” seen before the acquisition.

Schulz says UDTSA will continue truck assembly at its Rosslyn plant, near Pretoria.

Kenya “is a priority for us in the next few years”, also in terms of assembly, urged on by the East African country’s duty structure, he adds.

Looking ahead, he says UDTSA will focus on the heavy and extra-heavy truck segments in the short to medium term.

“In the long term we want to focus on all segments.”

UDTSA has lost substantial ground in the medium truck segment in recent years.

Overall UD sales in South Africa have dropped from 2,992 units in 2012, to 2,559 units in 2015.

As part of its short-term plans, UD Trucks will launch three new additions to its Quester heavy truck range.

This includes a rigid 4 x 2, a rigid 6 x 2 and a 6 x 4 dedicated compactor chassis with Allison transmission fitted as standard.

These new models will all be available from December.

“Our strategy to promote Quester in the rigid segments, such as construction and waste, as well as the municipal business, has certainly proved successful since the product range was launched in South Africa in 2015,” says Swanepoel.

“We are expanding this strategy to offer our customers what they need and adapting to market needs.”

The Quester range was recently launched in Ethiopia, and will be introduced in several markets within the southern and eastern Africa region within the next year. 

UDTSA is responsible for 18 markets outside South Africa.

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UD South Africa - http://www.udtrucks.com/en-za/home

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