Revenue attributable to truck sales, which currently made up about a third of Mercedes-Benz South Africa’s (MBSA’s) yearly sales of R37-billion, was likely to rise to around 50% in the coming years, given strong market demand for commercial vehicles in both South and Southern Africa.

Chairperson Dr Hansgeorg Niefer noted on Wednesday that the commercial vehicle division had recorded “outstanding growth” in 2007, with the unit selling 8 600 vehicles and capturing 23,3% of the total market.

Speaking at the release of strong business results, which saw revenue climb 13,5% from R32,5-billion in 2006, Niefer said that “trucks are becoming more and more important for us”.

During the period, Mercedes-Benz trucks increased its already high market penetration by a further 0,4%, while sales of its Freightliner products surged 42%, followed closely by Fuso, with a 35% rise. Its extra-heavy Western Star product, meanwhile, increased its sales by around 30%.

The increase was achieved in a strong overall market for commercial vehicles, underpinned by robust construction and infrastructure. Overall, the medium commercial segment grew 12,1%, heavy commercial vehicles by 11,6%, extra-heavy sales rose 16,7%, while buses grew by 2 %. By contrast, passenger car sales continued to reflect a sharp decline year-on-year, falling 14,7%, while the light commercial vehicle market also reflected a decline of 6,3%.

The growth in demand for trucks had also resulted in a rethink of MBSA’s assembly strategy, with a decision having been made to reintegrate this function. Commercial vehicles assembly had hitherto been outsourced to Ikhwezi Truck Tech, which used facilities owned by MBSA to assemble completely knocked-down units.

Niefer reported that the integration would be coupled to a R50-million investment to expand its assembly capacity, part of which would take place on a site previously used for passenger-car assembly.

In response to a question posed by Engineering News on the impact that the dynamic growth of the commercial vehicles was having on the group’s strategic thinking (see video), Niefer said it saw “far more growth in the truck business, not only through South Africa, but also in the southern part of Africa.”

“Therefore, we have decided to integrate our truck business,” Niefer explained, adding that it would be incorporating some of the facilities at its East London manufacturing hub into the expanded truck-assembly business.

“I would say [truck sales] currently make up one-third of our business and I expect this to grow closer to 50%,” he added.

Another possible growth area lay with buses, particularly as cities sought to deploy bus rapid-transit (BRT) solutions ahead of the FIFA World Cup, which would take place in South Africa in mid-2010.

MBSA was assembling a specialist BRT project team, comprising experts from Germany, who had been involved in rolling out these public-transport systems in South America.