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THE Australian truck industry has seen out 2020 with minimal sales contraction, pointing to a more positive outlook for the Australian economy in 2021 that will translate into solid new truck sales.

In its overview of the sales of trucks and vans in 2020, Truck Industry Council (TIC) CEO Tony McMullan said the new year was looking strong.

“Given the nature of new heavy truck sales, there is a lag between ordering a new truck, its completion/body fitment, pre-delivery, registration and final delivery to the customer,” he said.

“This is typically two to three months for heavy and medium duty trucks. The Truck Industry Council was always of the belief that it would take a couple of months at least, before the positive effects of the federal government’s October stimulus package would be reflected in T-Mark sales.

“I believe that we have started to witness those positive results in December.”

He said, however, that the outlook was tempered by noting the recent flare-up of COVID-19 cases and the resultant border closures by some states and territories that “may slow sales somewhat in the opening months of 2021.”

“That said, the general outlook for the Australian economy this year looks healthy,” he said.

Mr McMullan said when COVID-19 hit early last year, “many people feared the worst and, for so many, that trepidation unfortunately came to realisation.”

“The Truck Industry Council and members shared concerns for the road transport industry and while some operators have experienced tough times in 2020, the declaration by the federal government that the heavy vehicle industry was an essential service – as it most definitely is – proved to shore-up business confidence within the sector and kept the wheels turning quite literally.”

“The sector’s confidence, aided by appropriate and well-timed fiscal policy and incentives by our leaders in Canberra, laid the foundations for solid and better than expected new truck sales last year.”

The TIC reports that the total Australian truck and heavy van sales for the 2020 calendar year were 34,476 units.

It said that this was “by no means a record (that is held by 2018, when 41,628 trucks were sold), however a much better result than was forecast at the end of April last year, when new truck sales had slumped to levels not seen since the GFC.”

At the end of 2020 the sales tally was slightly down on the past five-year average of 36,272 truck sales (the average annual sales between 2015 to 2019).

The TIC said that this represented a five per cent reduction in sales over the five-year average which was “a much better result than was anticipated earlier in 2020.”

In keeping with previous years, the four sectors within the heavy-vehicle market fared differently to each other over the course of last year. The light truck and van segments performed better than both the medium and heavy truck sectors.

In the fourth quarter (October to December) results, sales were 9663 units which was the strongest quarter result posted in 2020. It was also 253 vehicles, or 2.6 per cent, greater than quarter four of 2019.

Mr McMullan said these strong truck sales in the fourth quarter of 2020 were no doubt directly boosted by the federal government’s new “unlimited” instant asset write-off incentive, announced in the October 2020 budget.

For the December month, total heavy-vehicle sales were 3478 units, up 230 vehicles on the 3248 trucks sold in December 2019.

It makes December 2020 the second-best on record, only eclipsed (just) by the pre-Global Financial Crisis (GFC) December of 2007 (3509 sales).

The heavy-duty (HD) truck segment sold 1144 units in December, up 28 trucks or 2.5 per cent on December 2019.

The December HD truck sector result marked the fifth consecutive period of month-on-month sales growth, with sales since July showing a positive, constant, upward trend.

In the calendar year, the segment sold 10,616 vehicles which was down 16.6 per cent or 2117 trucks on the 2019 year sales.

Mr McMullan said this highlighted the sales slump in the second and third quarters of the year and was before the introduction of the instant asset write-off incentive in October.

The quarter four HD result was only 1.1 per cent (or 3189 trucks) down on the same period in 2019.

Looking at the five-year average, the HD truck segment in 2020 was down 9.8 per cent or 10,616 sales.

The TIC said the medium-duty (MD) truck segment was hit the hardest last year, though the instant asset write-off incentive spurred some sales growth in the fourth quarter and, in particular, for the month of December.

December 2020 saw 655 MD trucks sold, a 17.0 per cent rise (or 95 trucks) over December 2019.

For the year, the 2020 sales figure of the MD segment was down by 11.1 per cent (822 trucks) compared with 2019.

The TIC said that the fourth-quarter MD segment result of 1753 units was slightly up over 2019 Q4 sales of 1738, though well short of the record final quarter result for MD trucks of 2812 recorded in 2007.

On the five-year average, MD truck sales in 2020 was well down, trailing the average sales result by 10.1 per cent with 6592 sales in 2020 compared with 7338 sales on average over the past five years for the sector.

The light-duty (LD) truck segment in December showed a slight increase in sales, recording 1069 deliveries for the month, up 2.4 per cent (25 trucks) over December 2019.

Fourth-quarter sales were 3018 LD trucks which was also up on quarter four 2019 by 3.4 per cent (98 units).

For the year, however, LD sales were 11,018 units, which was a 4.1 per cent decrease (equating to 469 trucks) for the segment when compared to 2019.

LD trucks now make up 32.0 per cent of all heavy vehicles sold in Australia. The result has moved the segment past the HD truck segment – which fell to 30.8 per cent share in 2020 – making LD trucks the most popular heavy-vehicle sector in Australia last year.

Comparing LD truck sales in 2020 against the five-year sales average for the segment showed 11,018 sales in 2020, versus 11,353 sales on average over the past five years for the sector, a decline for 2020 of 3.0 per cent or 335 trucks.

The light-duty van (LDV) segment performed the best in 2020 with a total 6253 van sales for the year, only 1.2 per cent down on 2019 sales of 6329.

TIC said that comparing the 2020 LDV sales result to the five-year average, the segment was the only one that it outperformed.

The five-year van sale average is 5812 vans but in 2020, the LDV sales topped this average by 441 units.

“This meant that the light-duty van sector was up 7.6 per cent last year over the five year average,” the TIC statement said.

In the month of December, 610 LDVs were delivered, up 15.5 per cent (or 82 vans) over December 2019.

The 2020 fourth quarter result of 1703 van sales was a new quarter-four record, eclipsing the previous October-to-December record of 1535 sales set in 2017.

By Neil Dowling

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