Truck Industry Council CEO Tony McMullan said the heavy duty sector suffered further sales declines following June, though the medium-duty truck segment was less affected.
“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 December 31, 2020,” he said.
The Truck Industry Council (TIC), the peak industry body for truck manufacturers and importers in Australia, reported that the new-truck sector is again heading toward a “two speed” marketplace.
Mr McMullan said this was similar to what the industry experienced in 2014 through to 2016, with solid sales in the lighter segments, while at the heavy end of the market, sales were slowing noticeably.
“On the surface the new-truck market as a whole appears to be performing reasonably well, despite the current economic climate,” he said.
“However, when looking into the detail provided in the TIC 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.”
The TIC reported that for most of 2014, 2015 and 2016, Australia’s new-truck market operated at two very distinct levels, with record, or near record, growth being recorded at the smaller end of the market in vans and light-duty trucks, while the heavy-duty truck segment saw year-on-year falls in new truck sales.
“Very much a ‘two speed’ market and this trend has re-emerged in the past four to five months as the effects of the COVID-19 pandemic have impacted our economy in Australia,” the TIC July report said.
“New heavy-duty segment truck sales have been tracking at levels almost 25 percent lower than sales in 2019 since March this year.
“In the same period, van sales have only declined by three percent and light-duty trucks sales were 4.7 percent lower.
“Both light-duty segments posted record breaking sales for the month of June 2020.”
The TIC said that in a repeat of the 2014 to 2016 period, the bottom end of the market of light-duty vans and trucks were continuing to support the overall market.
At the same time, medium-duty trucks were sliding and heavy-duty truck sales were “taking a hammering”.
“In fact, it is only the years following the global financial crisis (GFC) where sales have been worse for the heavy-duty sector,” the TIC said.
“Overall, the heavy-vehicle sector is tracking 12.4 percent down year-to-date, that is 2744 fewer trucks sold this year than in 2019.”
Reviewing each of the segments in detail, heavy-duty truck sales only totalled 782 for the month of July, down 24.4 percent (or 253 units) for the month and down a corresponding amount, 23.6 percent (or 1756 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.
In July, 570 medium-duty trucks were delivered which is down 9.8 percent (or 62 trucks) compared with July last year. On a year-to-date basis, the segment is weaker with sales down 13.0 percent (or 572 units) over this time last year. A total of 3835 medium-duty trucks have been sold in 2020 to the end of July.
The light-duty truck segment continued its relatively stable run in 2020 with 989 sales in July, down 4.4 percent (or 45 trucks) for the month. Year-to-date, it was similarly down 4.7 percent or 308 fewer sales to 6244 units this year in comparison to the end of July 2019.
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 were also solid with 3559 vans delivered to the end of July, down just 3.0 percent (or 108 vehicles) over 2019. In total 3559 vans were delivered to the end of July 2020.
By Neil Dowling