Compared to the many other industries that are spluttering, the commercial vehicles market is still on the up and globally is poised to continue at a compound annual growth rate (CAGR) of around 3.9 per cent over the next decade to reach approximately $6.7 billion (Dh24.6 billion) by 2025.

In this region, the sector is still seen as lucrative and as construction in Dubai revs back up, the demand for trucks and vans can only increase. 

Indeed, the UAE as a whole continues to lead the way in the region’s commercial vehicles arena, while GCC truck and bus sales are forecast to rise by 8.7 per cent annually during the period 2012 to 2017 to reach 155,000 units, according to Frost & Sullivan, a research-based consultancy. The number of trucks and buses on the road is expected to reach 1.42 million by the end of 2017, representing a CAGR of 6.9 per cent.

However, there is a note of caution when it comes to mid-size commercial fleet vehicles, the ones that are used for large-scale goods transportation. Analysts forecast the 2016 model-year to be rather flat compared to the prior model-year. 

Many fleets have caught up by replacing ageing vehicles due to extended services during the post-recession slowdown in new vehicle purchases. 

And, of course, the drop in oil prices had already prompted most businesses to adopt very conservative replacement schedules.

More options

However, there is new blood pumping into the segment. At an event held for key customers at the Mercedes-Benz commercial vehicles workshop in Thoban, Fujairah, Gargash Enterprises — the authorised distributor of Mercedes-Benz in Dubai, Sharjah, and the Northern Emirates — revealed two new mid-size models, the Accelo and the Atego, representing a foray for the company into the highly competitive distribution segment. 

The Accelo 915 C is equipped with a four-cylinder engine producing 150hp and comes with a payload of more than five tonnes. The truck cab is designed with a car-like interior, and is suitable for a driver and two companions. Meanwhile, the Atego 1725 is a multipurpose truck with a Gross Vehicle Weight of 17.1 tonnes, powered by a six-cylinder engine that produces 245hp. The vehicle is equipped with on-board diagnostics and ABS. 

The trucks will soon be officially launched in Dubai, which has more of a market for distribution vehicles than the Northern Emirates, says Thomas Rothe, Commercial Vehicles Manager at Gargash Enterprises. “Penetrating the distribution segment will not be without its challenges, particularly considering that it is extremely price-sensitive. 

“The Atego and Accelo, however, are assembled in the Mercedes-Benz facility in Brazil, where they are already popular in the distribution segment. The trucks will therefore be more cost-effective, and consequently better able to compete in the UAE, and they will be best suited for small and medium-sized and large companies, supermarkets and the like. 

“They are well-proven trucks, and that’s why we decided to bring them here,” adds Rothe. “Mercedes-Benz is well-positioned to tackle the needs of quarrying customers for both short- and long-distance applications. Customers that need trucks primarily for quarry use can go for the more rugged eight-cylinder version of the popular Actros, while customers transporting materials over longer distances can opt for the more efficient six-cylinder model. We are the only ones having two products in the segment, and the customer can choose. That gives us an edge.” 

Expansion plans

Ford is taking the medium-to-heavy segment of the commercial vehicles market very seriously, launching 2016 models suited to the region at last year’s Big 5 trade show in Dubai. These included the 1843T tractor head.

The company has big GCC expansion plans and Thierry Sabbagh, the new regional managing director, says that customer satisfaction is the brand’s top priority: “An improved dealer network and level of capability, along with making the customer sales and service experiences second to none, can ensure the growth of Ford in this region moving forward.”

Elsewhere in the GCC, the outlook for the commercial vehicles market is mixed. In Qatar, dealers are expecting infrastructure projects around the Fifa World Cup 2022 to drive demand, despite the low oil prices. 

There was strong growth last year in truck sales in the country for Man Truck and Bus, as well as Volvo Trucks. However, dealers are reportedly getting ready for things to be tougher this year due to the oil situation.