New truck and bus sales are expected to drop by 1.2% in 2016, to 30 229 units, compared with 2015, says Volvo Group Southern Africa (VGSA) president Torbjörn Christensson.

If this happens, it will be a second year of decline for the industry, which saw sales drop from 31 558 units in 2014 to 30 611 units in 2015.

Sales in 2015 declined 4.9% in the medium truck segment, compared with 2014, and 2% in the heavy, extra-heavy and bus segment.

VGSA secured a 15% share of the Southern African Development Community truck and bus market, selling 4 563 units during 2015.

The group also sold 1 000 used trucks during 2015.

Volvo Penta, which supplies engines and power systems for marine and industrial applications, had a record year, with a 69% increase in sales to 1450 units, owing, to a degree, to load-shedding.

Christensson notes that a combination of macroeconomic factors, including a weak exchange rate, pressure on inflation and interest rates, as well as low business confidence levels, contributed to the decline in new truck sales in South Africa during 2015.

VGSA found the mining segment to be especially hard hit in terms of truck demand, while the food and refrigerated cargo segments appear stable.

“With the South African economy predicted to grow by only 1% during 2016, we expect the local truck market to be in for another challenging year,” says Christensson.

He also expects the continued weakening of the rand to have a “tremendous” effect on the truck market, as it means “pricing will have to change”.

He is, however, hopeful that VGSA’s sales outside South Africa will make up for the weaker domestic market.

“We also hope for a more stable and better exchange rate.”

Around 10% of VGSA’s sales are outside South Africa – a number which Christensson hopes to grow to 30% “over the next few years”.

“One of our top priorities is to expand into Africa.”

African markets are, however, also experiencing significant pain, especially as oil revenue continues to decline.

VGSA, for example, sold 800 trucks in Angola in 2014, but only 30 in 2015.

New truck and bus exports from South Africa declined 21.7% in 2015, compared with 2014, to 1 107 units.

One of VGSA’s other priorities is to “step in” where truck financing is concerned, as “the banks are clearly pulling away from lending our customers money for trucks”, notes Christensson.