Local vehicle sales edge higher

New vehicle sales showed their first year-on-year improvement in April, although not by enough to suggest that real recovery is on the way.

Car sales rose 3.9% compared with those of April 2018, from 24,054 to 24,989. The total market, including commercial vehicles, improved 0.7%, from 36,528 to 36,794. For the first four months of the year, however, car sales were still 6.2% behind those of the matching stage in 2018 112,511 against 119,898. The overall market was 3.7% in arrears, down from 177,797 to 171,242.

This is a traditionally difficult time of year to draw market conclusions, because of shifting Easter and school holiday dates.

But it would be unfair to deny motor companies and dealers a sigh of relief after such a miserable start to 2019. Car sales in particular, were awful in the first three months. Luxury cars were down 30% on 2018, said Standard Bank’s Cyril Zhungu.

Mike Mabasa, CEO of the National Association of Automobile Manufacturers of SA (Naamsa), said April sales were a “welcome surprise”, but Zhungu said tough times lay ahead for the motor industry. He said the government can alleviate the situation with bold post-election economic and job-creation policies to improve business confidence, but realistically the market will remain constricted for most of 2019.

Naamsa said: “Consumer and business confidence levels are low [and] household disposable income remains under pressure due to rising costs of living. Domestic demand for new vehicles, particularly cars, will remain under pressure in coming months.”.

Export demand, however, continues to snowball. Shipments grew 53.8% in April from a year earlier, from 21,519 to 33,090. For the first four months of 2019, the improvement was 30.5%, from 93,338 to 121,803.

Naamsa called this an “admirable performance”, while Zhungu said: “Export production is underpinning the South African motor industry.”