Rigid trucks lead a recovering market

A market free from legislative distortions such as the introduction of new exhaust emissions standards saw 46,231 new trucks registered in 2016, according to figures from the Society of Motor Manufacturers & Traders – an increase of over five per cent on 2015.

Some manufacturers were better placed to capitalise on this than others. DAF, the market leader for the last 22 years, was able to use its UK production facility to respond fastest, and grew its share from just over a quarter to just under one third, giving it its highest ever share of the British market.

Mercedes-Benz, on the other hand, appears to have been caught flat-footed and fell from last year’s relatively strong second place to third, leaving Scania, with an unchanged share of the market, as runner-up.

The Swede’s performance is particularly impressive given that it does not sell trucks below 16 tonnes. The UK is now Scania’s biggest national market – and it claims leadership in the key three-axle tractor and 8×4 tipper sectors.

In terms of vehicle types and weights, there is now far less information being released by the SMMT and the individual manufacturers than ever before.

What we do know is that a resurgence in relative demand for rigid trucks compared to artics has driven market growth through the year with a 17 per cent increase in demand compared to 2014 – although the final quarter of 2016 saw the three-axle tractor sector in particular return to growth.

Sales of refuse, curtain-sider, tipper and box van body types all increased, indicating perhaps a release of latent demand: during the recession, many operators continued to use the rigid trucks that they had on fleet, preferring to run the risk of higher repair bills to making the considerable financial commitment of acquiring new vehicles.

Operators of rigids have also been keener to trade tradition for payload than before. In the 6 to 7.5-tonne sector particularly, the fortunes of high-payload Japanese-designed trucks have improved, and Iveco now sells nearly as many of its 7-7.2 tonne Daily as it does Eurocargo 7.5-tonne trucks; the lighter van-derived vehicle actually has a higher payload/body allowance than the heavier truck.

On the tractor front, 2015 had been the second-best market ever, so there was less latent demand, and also a good selection of used Euro 5 tractors from the highest-ever year of 2013 originally acquired on three-year deals, were waiting for new owners who might otherwise have only bought new.

Looking ahead, it seems there may be issues over the large number of Euro 5 tractors now seeking second owners: Euro 6 trucks have proved to be at least as reliable and economical as their predecessors and are essentially ‘future proof’ in as far as access to low emission zones goes, with exhaust gas cleanliness proven in the real world.

The same cannot be said for Euro 5 tractors, yet they are regarded by many export buyers as too complex for the right-hand drive markets outside Europe that are the traditional final destination for such vehicles.

This may serve to stagnate that tractor market further. Residual values for Euro 5 tractors are unlikely to improve, and the ‘cost to change’ will also be increased by further inevitable rises in new list prices driven by the post-Brexit result decline in sterling against the euro.

DAF’s managing director Ray Ashworth predicts an overall market decline for 2017 to around 42,000 units. Scania’s UK sales director for new trucks, Andrew Jamieson, agreed.

“We’ve now caught up with the pent-up demand from the last recession,” he said.

On the other hand, major if controversial infrastructure projects such as Hinkley Point and HS2, together with a promised £1.5 billion government investment in roads and other infrastructure, have been highlighted by Iveco’s truck business line director Nick Pemberton as drivers of demand for new trucks in 2017: tippers primarily, but heavy tractors and other types as well.