Exports spike offsets slow vehicle sales

EXPORTS of locally made vehicles bounced back strongly last month, compensating for another disappointing set of sales figures in the domestic new-vehicle market.

While domestic sales fell 9.2% from a year earlier, exports grew 39%, from 23,602 to 32,856. Toyota SA’s gradual return to full production, following the February launch of its latest Hilux bakkie range, means that for once, high-volume exporters are all operating at almost full capacity.

Luxury car makers Mercedes-Benz SA and BMW SA both sold more than four times as many cars overseas last month as they did in SA, while Toyota SA, Volkswagen SA and Ford Southern Africa, all posted impressive export numbers.

As a result, exports for the first four months of the year were down only 1.2% compared to last year — they lagged 13% at the end of March — and are on track for a forecast full-year growth of at least 10%.

Domestic sales, by contrast, continued their miserable 2016 form. New car sales fell 13.2% last month, from 30,026 to 26,077, and dragged down the total new-vehicle market 9.2%, from 44,469 to 40,390.

Year to date, vehicle sales were down 9.7%, from 204,471 to 184,627.

Interest in the new Toyota Hilux, adding to already intense competition in the sector, helped sales of light commercial vehicles limit their drop to 0.1% last month. But there was no such luck for medium-sized vans and trucks, which collapsed 24.3%.

According to WesBank executive Rudolf Mahoney: “Business sentiment among small and medium enterprises, which depend on this segment, is very poor.”

The only bright spot was extra-heavy trucks and construction vehicles, where sales grew 16.4%, according to figures the Department of Trade and Industry published yesterday.

Standard Bank head of retail banking vehicle and asset finance Nicholas Nkosi, said market decline for the rest of this year would probably stay around current levels. Rising interest rates and fuel prices in combination with general consumer and business negativity, meant there was unlikely to be any short-term recovery.

Mr Mahoney suggested the new vehicle market could be in “slow burn” for up to 18 months before recovering. “That’s how long it will take for salary increases and disposable income to catch up with current double-digit increases in prices,” he said.

Interest in the new Hilux helped sales of light commercial vehicles