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2017 Trends in the Australian Heavy Commercial Vehicle Market

The Australian auto industry achieved record sales in 2017, with the Federal Chamber of Automotive Industries (FCAI) counting a total of just under 1.2 million sales nationwide, representing a 0.9% increase on 2016's sales.

In January, we looked at some of the broader trends that emerged in 2017, talking about the replacement of Passenger car sales with SUVs and Light Commercial Vehicles (LCVs). Alongside that trend, one of the big shifts last year was seen in Australia's Heavy Commercial Vehicle (HCV) market, which enjoyed the strongest Year-on-Year (YoY) growth of any segment in 2017, beating both LCVs and SUVs. While we’ll break this out more following, it’s important to note that one factor in HCV growth in 2017 was the recovery that took place in Western Australia, which is traditionally a strong market for HCVs. The economy of WA posted its best quarter in more than two years in September 2017, primarily driven by growth in non-dwelling construction and supported by a rebound in exports and mining.


Heavy Commercial Vehicle Sales 2017


To properly understand this market though, we need to take a closer look at how it splits up. The HCV segment is divided into three sub-segments: Light Duty (LD), Medium Duty (MD) and Heavy Duty (HD), with the increases more evident at either end of that spectrum. This reflects a shift in the market to big trucks for long haul, and smaller ones for last mile transportation.


Heavy Commercial Vehicle Sales By Segment 2017


The growth in the HCV segment has also been supported by technological innovations. In August 2016, Australia became one of the first countries in the world to receive the updated model of Isuzu's popular N Series truck. Izuzu's investment in product development has paid off with the Isuzu N-Series going on to become the top-selling HCV in Australia in 2017. The N-Series was followed by Hino, the Mercedez Benz Sprinter, Kenworth and the Fuso Canter.

Looking past Isuzu, Hino, Kenworth and Fuso Canter all also launched updated models in 2017, and Mercedez Benz has announced a next-generation Sprinter for launch in the first half of this year. Similarly to Isuzu, these contain innovations that will improve safety, drivability, and durability, while also reducing the vehicles' impact on the environment. 

“The ongoing product development and close relationship with Japan provides our customers with enormous benefits, in terms of having more choice, greater access to the latest technology and more driveability across the entire range”, said Simon Humphries, Chief Engineer Product Strategy at Isuzu Australia Limited.


Best Selling Heavy Commercial Vehicles


Although the top five brands remain unchanged from 2016, there was some significant movement among the brands further down the list. Volvo, Scania and Mercedez-Benz Trucks all moved up a spot, while MAN leapt up seven places by more than trebling sales compared to 2016. As part of its improvement, MAN launched its new TGX D38 truck last January, revamped its website to improve customer experience (CX), formed a number of new partnerships to get its trucks into dealerships across Western Australia, Victoria and New South Wales, and picked up fleet deals with GTS Freight Management and Transport for New South Wales.


Top 20 Heavy Commercial Vehicle Brands 


Within the HD market the top five brands all saw significant growth in 2017, but Kenworth maintained its overall dominance, capturing almost a quarter of all sales. Paccar Australia, which owns Kenworth and DAF, announced in December that from the second half of 2018, it will also start assembling DAF trucks at its facility in Bayswater, Victoria (where it has been manufacturing Kenworth trucks for almost 50 years). Although DAF trucks dropped a place in 2017, they recorded strong YoY growth, outperforming big brother Kenworth, and with the recent closure of the final automotive plants, Paccar's continued commitment to Australian manufacturing may further endear them to local customers.

“Local assembly provides us with opportunities to develop higher levels of customisation in areas such as chassis lengths, fuel and AdBlue capacities, different suspension options, and other elements to further our commitment to meeting customer demands and the specific requirements of Australian applications”, said Paccar Australia Managing Director Andrew Hadjikakou. “DAF is already a good truck but there’s no doubt local assembly will make it a more customised truck for Australia”.


Top Heavy Commercial Vehicle Brands 2017


In summary, we saw several key trends emerging in 2017 sales of HCVs. The growth of online retail (within the overall freight task), will continue feeding the need for Light Duty trucks that can fulfil last-mile requirements. Heavy Duty trucks are also seeing increased uptake as the growing freight task again drives operators to move away from using Medium Duty trucks on long haul routes.

Across the market, the top brands are maintaining their positions through technological innovation, and a focus on the needs of Australian customers, but there is room for other brands to grow, as long as they are agile enough to adapt and respond to the market. Kenworth's dominance, and parent company Paccar Australia's move to build DAFs in Australia also further reinforces the importance of having a local focus when it comes to the HCV market.


Topics: Automotive Research automotive trends