Truck industry on edge over economic events
INDUSTRY NEWS
Isuzu Trucks SA is going through a transition as it becomes Isuzu Motors SA with the recent announcement General Motors is disinvesting from SA.
Chief operating officer Craig Uren says the company remains positive about the future but there is a need for caution.
“The economy is delicately balanced,” he says, adding that there is “plenty of positive sentiment but we are poised and cannot take any more shocks”.
Uren says April, May and June were not good months for cash flow with many businesses failing to realise just how few business days there were in April. Some are still trying to recover, but this is compounded by the fact that many businesses are operating on a fine line.
“We kind of start living in the moment. A moment used to be a year or two years, but now a moment has become 30 days.”
In the transport and logistics industry, he says, there is little room for any more cost cutting. The cost per package or item has been cut as much as possible. In a warning to the industry, he says there is only one thing left to cut to save money, and that is people.
The truck and transport industries are influenced heavily by economic events and sentiment. One area that has seen a major shift, says Uren, is that companies are renting trucks rather than buying them, with the rental sector proving to be resilient. The shift to rental is one of the factors that will contribute to Isuzu Motors’ prediction of a decline of 2%-3% in the overall truck market in 2017. Uren still expects to see an upturn in 2018 with a prediction of a 1.9% increase to 27,000 trucks.
The industry is also about to enter what is traditionally a strong buying period as companies prepare for Christmas. Uren says it will be interesting to see how this period goes in terms of predictions for 2018.
Despite much negativity in the industry and the economy, Uren says his company is “positive of what we can do for the rest of the year”.
It has already increased its overall market share in the first six months of 2017 to 14.5% but he says the second half of the year will be competitive in terms of pricing, new models and even new entrants.