New-vehicle sales show mixed results
New-vehicle sales in SA delivered a mixed bag of results last month, with bakkies recording a significant increase but car sales taking a dip.
In November, passenger car sales of 25,707 were 1,086 units less than the previous month while light commercial vehicle (LCV) sales, including bakkies, increased by 1,599 units to 11,243, indicating shifts in market demand.
Overall, the market recorded its best post-lockdown performance in November, with 39,315 cars, LCVs and trucks finding new owners.
This was up on the 38,752 units sold in October, according to the National Association of Automobile Manufacturers of SA (Naamsa).
Though the 343,276 year-todate sales were still down 30.6% compared to 2019 due to the Covid-19 lockdown, it was the fifth consecutive month that overall vehicle sales increased, showing signs of resurgent consumer demand in an industry that contributes 6.4% to GDP.
“Generally, we have recovered to about 70% of pre Covid-19 volumes,” says WesBank’s head of marketing and communication, Lebogang Gaoaketse, said.
“While it would be unrealistic to expect the market to return to 100% in the short to medium term, the industry has adapted quickly to the new levels of demand to remain sustainable and continue contributing towards economic recovery. ”
WesBank CEO Chris de Kock said new blended working arrangements had reduced the demand for consumers to own cars.
“For those who do, it is likely that their annual mileage will reduce considerably, increasing the time between replacement cycles.”
De Kock said consumers were clearly seeking to reduce their monthly instalment by buying a more affordable vehicle.
“The evidence of this can be seen in the market growth of the new-car segment offering lower-priced vehicles where customers seem willing to substitute high-profile brands for more practical and affordable options.”
Also contributing to this trend was the increase in newvehicle prices, now averaging close to double digit inflation this year.
“The other trend is the shift towards the used car market, again driven mostly by the buy-down effect,” De Kock said.
National Automobile Dealers’ Association chair Mark Dommisse said the pricing of pre-owned vehicles was holding up well but there was concern about a decrease in the supply of used vehicles.
He said he believed this shortfall would continue into 2021 and was problematic for the industry.
Dommisse said positive factors in terms of vehicle affordability were that interest rates remained low and the rand was holding up against the dollar.
The pandemic had altered the way many people travelled and he anticipated ongoing changes in the commute between home and work into the future.
“This will impact on the type of vehicles they buy or whether a significant number will switch to shared transport options,” Dommisse said.
“With economic uncertainty, customers are wary of spending on big ticket, durable items.
“Instead they are tending to hold onto savings and disposable income.”
Naamsa said the economic scars of the Covid-19 pandemic were extreme and the domestic and global economic environment would remain volatile over at least the next six months.
However, with low inflation, marketing incentives available on new vehicles as well as interest rates expected to remain low for quite some time, it was actually a good time to purchase a new vehicle, Naamsa chair Mike Mabasa said.
Toyota retained its market leadership in November with 9,441 new vehicles sold, ahead of Volkswagen (6,950 units), Ford (3,895), Nissan (2,744), Hyundai (2,609) and Suzuki (2,016).