Amid the entirety of the pandemic, the Australian economy and its populace have leaned heavily on the transport sector, notably on heavy vehicle proprietors and operators. The economic repercussions have predominantly been adverse for the economy. However, truck owners and operators have managed to glean certain advantages from the pandemic and other related influences. Favourable interest rates and investment incentives seem to have played a role in driving up truck sales during the year 2021.
The 2021 truck sales results are just short of the recent record sales figures recorded in 2018. With the release of the truck sales figures for 2021, Truck industry Council (TIC) CEO Tony McMullan posted a release which provides insights and background into the results.
Mr. McMullan contextualized the figures by reminiscing that 2007 marked a record-breaking year for heavy vehicle sales. However, as the global financial crisis (GFC) struck, sales plummeted, and it took a decade until a new sales record was reached in 2018.
He underscored that the impressive results of 2021 were a significant accomplishment, despite challenges such as shutdowns, lockdowns, shipping delays, and supply chain disruptions, particularly linked to the scarcity of computer chips that affected the sector. On a positive note, he emphasized the surge in online shopping, robust construction sector activity, and crucial rainfall breaking drought conditions, all of which contributed to robust sales.
The primary surge in sales during 2021 was observed in the light-duty segments and van sales, attributed to the heightened demand for delivery services. Mr. McMullan also drew attention to the advancements in safety and exhaust emission features in present-day trucks, underscoring their favourable impacts on road users, operational expenses, and the environment.
Sales Results Analysis
The truck sales data for 2021 reveals a notable 20% upsurge when compared to the figures of 2020. However, when making such a comparison, it's important to acknowledge the influence of the pandemic on 2020's outcomes, as well as the tax initiatives introduced by the federal government in 2021. The 2021 achievement fell just 225 units shy of matching the record set in 2018.
Experts dissecting these outcomes highlight the disparities in various segments, noting that heavy vehicle sales predominantly dominated the market in 2018.
Individual Brand Performances
Several brands are reported their own individual impressive sales performances. With several new models launched including the 50th anniversary Canter Fuso has reported record sales for the year. The company has claimed a number of ‘firsts’ in the Australian truck market including with its eCanter and ABS on many models.
Mercedes-Benz also posted impressive figures which exceeded its previous record sales figures. Sales of the Euro 6 Actros particularly noted.
Incentives Contributing to Sales Results
From the financial standpoint, we have observed several notable incentives that have exerted a favourable influence on new truck procurements and broader business equipment investments. The Federal Government's introduction of accelerated asset depreciation measures in response to the COVID-19 induced economic challenges has proven to be a substantial motivating factor.
At the outset, in early 2020, the business community displayed reluctance in embracing the opportunities presented by the Instant Asset Write-off due to prevailing uncertainties surrounding the COVID-19 circumstances. However, after the Government fine-tuned the provision and subsequently expanded it into a temporary full expensing initiative, its adoption gained significant traction.
For those who are still to take advantage of temporary full expensing with a truck acquisition, it is not too late. The measure is in effect for eligible businesses and eligible acquisitions until June 2023. Chattel Mortgage for truck & trailer financing is considered the most appropriate loan type to realise the depreciation benefits associated with this measure.
Another major incentive has been the historic low interest rate scenario, once again brought on through the COVID-19 pandemic. With the RBA holding the official cash rate at the historic low level since November 2020, 2021 was a great year for businesses to invest in new trucks.
Key of course to realising the full benefit of historic low rates is to secure a fixed interest rate truck loan. Jade Truck Loans offers a fixed truck loan interest rate across our portfolio of loan types. This ensures our customers can enjoy the lower repayments resulting from that low rate across the entirety of their truck loan term. With terms of up to 7 years available, that is a considerable period to reap the cost-effective benefits of a cheap interest rate truck loan.
Interest rates indeed differ among the various truck loan categories. This pattern holds true across the finance sector; however, Jade Truck Loans assures more favorable rates across our array of offerings. Chattel Mortgage and Commercial Hire Purchase options command the most attractive rates, Truck Lease finance slightly exceed these, while Rental arrangements carry the highest rates. These variations mirror the diverse structures of the finance facilities.
Seize the opportunity presented by the current low interest rates and the Government incentives—why not designate 2022 as the year to enhance your vehicle? Our consultants provide comprehensive assistance, expertly navigating all aspects of the finance process. This encompasses sourcing and negotiating the most competitive offers, as well as overseeing the paperwork and settlement procedures.
Contact Jade Truck Loans on 1300 000 003 to discuss cheap finance on a new truck.
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