Van market will be hit first by falling demand say experts
Page 28
If you've noticed an error in this article please click here to report it so we can fix it.
THE BOOM in sales of commercial vehicles is shortly to come to an end, and sales figures are likely to fall back to last year's level.
This is the prediction of the society of Motor Manufac:urers and Traders which proJuces the monthly new cornnercial vehicle registration Igures. Peter Kettle, the 3MMT's economist, addressed nore than 140 motor industry !xecutives in London last veek at a briefing attempting o forecast the fate of the moor industry in 1980.
Mr Kettle said the SMMT irediction was a scientific one, lased on an extrapolation of ,ast trends and taking into ccount external factors such s the country's economy and olitical climate.
On the grounds that Britain ppears to be heading for a eriod of slow or negative rowth, the SMMT reasons iat the demand for freight .ansport will decrease ightly. Therefore, sales of )mmercial goods vehicles iould also drop as hauliers id own-account operators id their work is not expanng as fast as it has in the past ar or so.
Extending this year's sales the end of December, the IIMT expects total commeril vehicles sales to be just .der 305,000. This figure is a 7.ord (if it turns out to be accurate forecast), just ating the previous best of 73.
But next year the SMMT pects sales to drop by )und 15 per cent to 260,000, tich is approximately the el of 1978.
7irst to suffer, forecasts Mr ttle, will be the van market, m car-derived vans up to "I.b me-gross vehicles. These largely used for transport inected with retail and tsumer goods and it is conner spending most likely to first hit by a recession, km:idler indication that the iter end of the commercial icle market might be first is that many of these kind vehicles are used by local horities who are already ng cutbacks. The van market is the highvolume sector of the total commercial vehicle market, accounting for roughly twothirds of all sales. Again, the SMMT has predicted how sales will end this year for vans. It expects them to total around 220,000, but for this figure to drop to 185,000 in 1980.
Mr Kettle indicated that this drop will start very early in the New Year and possibly we have already seen the monthly peak in van sales. He was surprised that they have stayed up so well, expecting them to be less buoyant in recent months.
Moving up the weight range, from 16-tonners up to maximum-weight artics, the SMMT forecasts that the sales of these will hold up a little longer than their lighter brothers, although ultimately experiencing a substantial fall in 1980.
Sales of heavier lorries should reach 77,000 by the end of this year, says the SMMT. But these too will fall to around the 65,000 in 1980. Furthermore, Peter Kettle said, he would not be surprised if this decline continued into 1981.
Although the SMMT is forecasting an overall 15 per cent drop in commercial vehicle registrations, it was pointed out that this should not be regarded as a major slump — the figures are being compared with this year's which are, after all, a record. In other words, the message was "Don't be despondent."
Looking at the different timescales predicted — light vehicle registrations followed by the heavier ones — this would seem to affect the fortunes of different manufacturers. British manufacturers are very dominant in the van market, notably Ford, Bedford, Leyland and Dodge, and so these will be the first to feel the draught.
But as sales at the heavier end of the commercial vehicle market slip later in the year, then the foreign manufacturers who import considerable numbers of heavier lorries into Britain will also be affected. Volvo, Daf, Mercedes-Benz, MAN, Scania, Renault and Magirus Deutz are some of the foreign manufacturers who might be fighting a little harder to maintainsales figures in Britain next year.
The basis for these SMMT predictions that sales will decline by 15 per cent is that Britain is approaching a "minor recession" — indeed, it may have already begun.
Addressing the motor trade managers on the economic background to the forecasts was James Morrell from the Henley Centre for Forecasting. Explaining why he believed that Britain is heading for this "minor recession," Mr Morrell reminded the delegates that Britain often experienced what happens in America, but with a time-lag. The USA is going through a sticky period at the moment — the dollar is low and commercial vehicle sales are poor. Mr Morrell expects America to stage a recovery next spring, while Britain heads in the opposite direction.
The energy problem was naturally a prominent topic in Mr Morrell's address. He predicts more stable oil prices during 1980, helped partly by less industrial demand as national output remains roughly static. But after a fairly stable period in 1980 he fears that oil Prices will once again rocket upwards in 1982.
He personally placed a great deal of faith in hydrogen as a source of fuel for internal combustion engines in the future, referring to Ford research in America.
Other predictions for the immediate future by Mr Morrell included that this could be another winter of "labour unrest and turbulence" (but no miners' strike, incidentally) and wage settlements to average 14 per cent. He also firmly believed that there would be a further cut in income tax in the Spring 1980 budget.
For commercial vehicles specifically, Mr Morrell thought that radio communications between a driver and his depot would become a reality as electronics get better and cheaper.
Most entertaining speaker was broadcaster and journalist Graham Turner, who specialises in motor industry matters. Mr Turner noted the enormous progress made by the Japanese in the British car market, and other sources have suggested that they could attempt a similar move in the heavy commercial vehicle sector, already having made inroads with light vans and 4x4s.
Both James Morrell's and Graham Turner's conclusion were that we should not be glum — there is not going to be a major crash. Only tim will prove how correct are the individual predictions.
• David Wilcox