Bakkie de­mand dip a drag on ve­hi­cle sales

Business Day - - FRONT PAGE - David Fur­longer Ed­i­tor at Large fur­[email protected]­nesslive.co.za

Re­duced de­mand for bakkies from the govern­ment and the agri­cul­tural sec­tor dragged down the over­all new-ve­hi­cle mar­ket in Novem­ber.

Re­duced de­mand for bakkies from the govern­ment and the agri­cul­tural sec­tor dragged down the over­all new-ve­hi­cle mar­ket in Novem­ber.

Fig­ures re­leased on Mon­day by the depart­ment of trade & in­dus­try showed that ag­gre­gate sales across all ve­hi­cle cat­e­gories fell 5.8% in Novem­ber com­pared with Novem­ber 2018, to 44,738.

Bakkies ac­counted almost sin­gle-hand­edly for the de­cline. Sales of light com­mer­cial ve­hi­cles, which in­clude vans and minibus taxis, fell 22.1% to 10,679.

Mike Mabasa, CEO of the Na­tional As­so­ci­a­tion of Au­to­mo­bile Man­u­fac­tur­ers of SA (Naamsa), said bud­get con­straints at na­tional and lo­cal govern­ment level have cut into sales, while dif­fi­cult farm­ing con­di­tions, in­clud­ing drought, have prompted farm­ers to cut back on pur­chases.

WesBank’s Le­bo­gang Gaoaketse said: “The poor per­for­mance of bakkie sales is con­cern­ing, con­sid­er­ing they are among the high­est vol­ume sell­ing nameplates in the mar­ket and also be­cause they are lo­cally man­u­fac­tured.”

THE PER­FOR­MANCE IS CON­CERN­ING, CON­SID­ER­ING THEY ARE AMONG THE HIGH­EST VOL­UME SELL­ING NAMEPLATES IN THE MAR­KET

Sales of heav­ier trucks also fell in Novem­ber but by much smaller mar­gins.

Car sales, which have lagged the over­all mar­ket for most of 2019, grew 1.3% to 31,444. Com­bined car sales for the 11 months to Novem­ber were down 3.6% to 326,460. The to­tal mar­ket, in­clud­ing com­mer­cial ve­hi­cles, was down 3.4%, to 494,996.

With­out ve­hi­cle rentals, which ac­counted for 15.9% of the new-ve­hi­cle mar­ket, or almost one in six sales, the Novem­ber pic­ture would have been even worse.

Mabasa ex­pects no im­me­di­ate sales im­prove­ment be­cause of low eco­nomic growth and limited house­hold dis­pos­able in­come.

IN­FLA­TION

“Con­di­tions in the do­mes­tic new-ve­hi­cle mar­ket are ex­pected to re­main un­der pres­sure over the short to medium term,” Mabasa said.

Wesbank’s Gaoaketse said that de­spite con­sumer in­fla­tion be­ing within the govern­ment’s tar­get range, “new-car price in­fla­tion re­mains very real within an af­ford­abil­ity-driven mar­ket­place”.

Ve­hi­cle ex­ports, which have been run­ning ram­pant for most of 2019, hes­i­tated in Novem­ber, re­treat­ing 0.9% to 35,271.

How­ever, it seems cer­tain that the in­dus­try will beat its 400,000 tar­get for the year. By end-Novem­ber, 374,215 ve­hi­cles had been shipped to over­seas cus­tomers. That al­ready beats the pre­vi­ous full-year ex­port record of 351,154.

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