Rentals boost October car sales

Motor companies may be celebrating October’s new-vehicle sales, which hit their highest monthly level for three years, but there is precious little for consumers to get excited about, Derick de Vries, Standard Bank’s head of vehicle and asset finance, said on Thursday.

Vehicle rental companies, restocking their fleets ahead of the year-end holidays accounted for 28.7% of car sales and 20.2% of all vehicles.

Private sales through dealerships were actually down.

“I expect more of the same in November,” said De Vries, “with more strong rental demand and more pressure for consumers.”

Nico Vermeulen, director of the National Association of Automobile Manufacturers of SA, said the economy “continues to experience difficult conditions and consumers’ disposable income remains under pressure. Economic indicators suggest that business conditions will probably remain difficult over the short term.”

Figures released by the department of trade & industry on Thursday show that domestic new-vehicle sales totalled 51,866 in October, a 1.7% improvement on the corresponding month of 2017 and the best monthly figure since October 2015.

FULL-YEAR SALES

However, the market for the year as a whole remains down. Aggregate sales for the first 10 months, at 464,742, are 0.5% behind the same stage of 2017.

“I don’t think full-year sales will show an improvement on 2017,” De Vries said.

Commercial vehicles are the main reason for October’s improvement. Car sales were down — to 35,050 from 35,308 a year earlier — but light, medium and heavy commercials all boasted healthy gains.

For the year so far, car sales lag 2017 by 0.3%.

Vehicle exports improved 21% in October — 34,134 against 28,233 a year earlier. That has almost closed the gap on 2017. Exports for the first 10 months of 2018, at 284,145, were 0.1% behind 284,461 at the same stage in 2017.

The comparison is slightly distorted by the fact that at this time last year, Volkswagen SA and BMW SA were both running down local and export production in preparation for the launch of new products.

Both companies are now back to full production.