Renewed fears about car market
POLITICAL events of the past few days had blown forecasts of improving new vehicle sales “out of the water”, WesBank analyst Rudolf Mahoney said.
March sales of new cars had hinted at a faster-than-expected recovery from the doldrums of the past three years, which had seen the market shrink about 16%.
Mahoney said sales to private buyers, rather than corporate fleets and rental companies, had bounced back strongly in March. Consumer applications for new car finance had grown 13% from March 2016 – the first time in more than 12 months that yearon-year numbers had increased.
“It was a cracker of a month,” he said. But the negative sentiment created by President Jacob Zuma’s Cabinet reshuffle, particularly the axing of finance minister Pravin Gordhan, had changed that.
Having predicted in early March that the total SA new vehicle market in 2017 would grow 1.7%, WesBank now feared “it will probably be in negative space”.
March sales published on Monday by the Department of Trade and Industry showed a 2.1% improvement from a year earlier. The industry sold 48 514 new vehicles, up from 47 514 in March 2016.
New-car sales improved by the same margin, from 30 390 to 31 034.
Light commercials, mainly pick-ups, rose 1.1%, medium commercials 11.2%, heavies 4.8% and extra-heavies 27.7%.
As a result, sales of all new vehicles for the first quarter of 2017 rose 1.9% from a year earlier: from 144 172 to 146 951. Car sales increased 0.9%, from 98 377 to 99 228.
Exporters also had cause for cheer. They grew 7.8% in March, from 27 720 to 29 879. Total exports in the first quarter of 2017 improved 1.9%, from 70 044 to 70 683.
Optimism was short-lived, however. The National Association of Automobile Manufacturers of SA (Naamsa) announced it was suspending market forecasts because of economic uncertainty. Sales correlated closely to overall economic performance.
Amid considerable pessimism and lack of clarity on what would happen to key indicators such as GDP, interest and exchange rates, Naamsa said it was “unable to provide any meaningful market projections at this stage”. It would resume once “greater clarity is forthcoming as to the impact of political events on the direction of the economy”. — TMG