Bakkies are tops in new sales data
NEWS/ More light commercial vehicle take a dip, writes Denis Droppa snapped up in November but car sales
New-vehicle sales in SA delivered a mixed bag of results in November, with bakkies recording an increase but car sales taking a dip. Overall, the market recorded its best post-lockdown performance.
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, says the National Association of Automobile Manufacturers of SA (Naamsa).
Though the 343,276 year-todates sales are still down 30.6% from 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 volumes,” says Lebogang Gaoaketse, WesBank’s head of marketing and communication. “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 says new blended working arrangements have 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 says consumers are clearly seeking to reduce their monthly instalment by buying a more affordable vehicle.
“The evidence can be seen in the growth of the new-car segment offering lower-priced vehicles where customers seem willing to substitute high-profile brands for more practical, affordable options.”
Also contributing to this trend is the increase in newvehicle prices, now averaging close to double-digit inflation..
“The other trend is the shift towards the used-car market, again driven mostly by the buydown effect,” says De Kock.
Mark Dommisse, chair of the National Automobile Dealers’ Association (Nada), said that the pricing of pre-owned vehicles is holding up well but there is a concern about a decrease in the supply of used vehicles.
He believes this shortfall will continue into 2021 and is problematic for the industry.
Dommisse says positive factors in terms of affordability are that interest rates are remaining low and the rand is still holding up against the dollar.
CHANGED COMMUTES
The pandemic has altered the way many people travel and he anticipates 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,” said Dommisse.
“With economic uncertainty, customers are wary of spending on big-ticket, durable items. Instead they are tending to hold onto savings and disposable income for the time being.”
Naamsa says the economic scars of the Covid-19 pandemic are extreme and the domestic and global economic environment will 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 is actually a good time to purchase a new vehicle, said Naamsa chair Mike Mabasa.
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).