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Truck sales soar but supply weak

Supply: Demand for new trucks like the Scania NTG range have hit new records but semiconductor shortages, COVID-19 and shipping issues are eroding market potential.

Buyers, buoyed by government incentives, aim for safety, economy and low emissions


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21 Mar 2022

TRUCK sales remain strong, in line with industry growth in Australia, buoyed by demand for construction and burgeoning pressure on road freight.


While sales are strong, the forward order book is even better with some truck-makers noting record demand.


Unfortunately, they are not filling that book quick enough as component shortages – primarily semiconductors – bite into the potential.


The Truck Industry Council (TIC) reported that February truck sales combined with positive January figures to create a strong start to 2022 for the road transport sector.


TIC CEO Tony McMullan said it was “particularly pleasing to witness the heavy duty truck segment setting sales at near record levels”.


Although Mr McMullan described the light duty truck segment as “rewriting the record books” in 2022, he cautioned the industry from becoming too optimistic.


“It highlights how supply chain and shipping issues can significantly dampen the source of vehicles very quickly,” he said.


“The struggles in the light duty van segment so far in 2022 highlight the fragility of global supply.


“We also must be mindful of escalating world diesel prices and the pending Australian federal election, as being other possible external forces that may dampen the enthusiasm for new truck purchases as we move through the year.” 


Data from TIC and VFACTS show February truck sales, up 7.3 per cent on the same month in 2021, also culminated in an 8.8 per cent increase in year-to-date sales for January and February compared with the same two months in 2021.


Primary factors behind the demand include the federal government’s instant asset write-off and business deduction policies that have encouraged investment in newer, safer and cleaner prime movers.


It shows buyers are opting for Euro-6 emissions compliant vehicles without needing encouragement from government legislation. The federal government has had Euro-6 legislation in hand for several years but this is yet to be implemented.


With the move to newer and cleaner trucks comes hi-tech safety and driver assistance features that are encouraging employer attitudes to safety in the workplace.


Scania told GoAuto that its record orders in 2021 of 112,000 trucks was attributed to the success of its New Truck Generation (NTG) launched globally in 2016 and in Australia in 2018.


It said the NTG range hit the mark for suitability to Australian customers and conditions, and the increased quality and durability of the product. 


Scania added that this was then supported by high levels of uptime that are critical for operator profitability; its repair and maintenance contracts are at the highest levels ever and its company-owned finance arm Scania Finance Australia has a penetration of about 40 per cent.


The company will launch new drivetrains including an all-new 13-litre engine platform in Q4 that will cover 420hp to 560hp while claiming to be eight per cent more fuel efficient – ideal in a climate of soaring fuel prices.


In the mismatch of orders compared with supply, Scania reports that its full year 2021 performance had 112,000 orders – the highest on record – but the pandemic’s effect on staff shortages, shipping issues and the weak supply of semiconductors have hit supply.


Broadly, it is recognised that the situation may remain unchanged for all European truck manufacturers for the rest of 2022 and into 2023. 


As a result of the truck shortage, the used market has – like the car sector – shown weak supply and rising prices.


New kid on the block for this year is SEA Electric, which reported one delivery. SEA Electric is making its own trucks now, in addition to its retrofit EV truck business. TIC said SEA Electric’s retrofit trucks would already have been counted in the data when the original diesel truck was sold new.


TIC said that for the second month in succession, the result for the heavy duty truck segment was very strong, with 1029 units sold, up 27.8 per cent (or 224 units) on February 2021. 


Year to date, the HD segment is tracking a very healthy 26.0 per cent (365 trucks) above the same period last year.


The medium duty segment also performed well again in February with 544 truck deliveries for the month versus 494 units in February 2021, a gain of 10.1 per cent (50 trucks). 


TIC has previously noted that the MD segment is a shrinking market “so it is unlikely that we will ever see new Medium truck sales rewriting the record books”.


The light duty truck segment set a new sales record for the month of January 2022 and backed that again in February, with the best ever second month sales result.


February 2022 LD truck sales were 1023, just above the previous February record set just last year, when 1011 light duty trucks were delivered. 

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