March new vehicle sales ‘exceed expectations’

The Automotive Business Council, or Naamsa as it's also known, has released new vehicle sales for March.

According to Naamsa, the new vehicle market’s performance continued to 'exceed expectations' during the month.

Aggregate domestic new vehicle sales in March, at 50 607 units - the highest monthly sales total since the pre-pandemic October 2019 sales total - reflected an increase of 7 184 units, or 16.5%, from the 43 423 vehicles sold in March last year.

Export sales, however, recorded a decline of 4 861 units, or 12.4%, to 34 285 units last month compared to the 39 146 vehicles exported in March 2021.

Overall, of the total reported industry sales of 50 607 vehicles, an estimated 43 441 units, or 85.8%, represented dealer sales, an estimated 8.2% represented sales to the vehicle rental industry, 4.6% sales to government, and 1.4% to industry corporate fleets.

The March 2022 new passenger car market, at 33 790 units, registered a substantial increase of 7 191 cars, or a gain of 27.0%, compared to the

26 599 new cars sold in March 2021.

The car rental industry supported the new passenger car market during the month and accounted for 11.0% of car sales in March 2022.

Domestic sales of new light commercial vehicles, bakkies and mini-buses, at 13 795 units last month, recorded a decline of 389 units, or a fall of 2.7%, from the 14 364 light commercial vehicles sold during the same period last year.

Sales for medium and heavy truck segments of the industry reflected a positive performance during the month and, at 798 units and

2 044 units respectively, showed an increase of 124 units, or 18.4% in the case of medium commercial vehicles, and, in the case of heavy trucks and buses, an increase of 258 vehicles, or a gain of 14.5%, compared to the corresponding month last year.

The March 2022 export sales number, at 34 285 units, reflected a decline of 4 861 vehicles, or 12.4%, compared to the 39 146 vehicles exported in March 2021.

For the first quarter of 2022, vehicle exports were now 4.1% below the level of the same period last year.

The positive new vehicle market performance during March 2022, reaching a level last achieved pre-Covid, could be attributed to pent-up demand aligned with the increasing normalising of business conditions, as well as enticing new model choices in the domestic market.

The temporary reduction in the general fuel levy by R1.50 per litre from 6 April to 31 May, to somewhat curtail the record fuel prices, as well as further relief measures to follow as announced by Finance Minister Godongwana, have been welcomed by motorists.

However, escalating inflation risks, ongoing record fuel prices, low and stagnant economic growth and a rising interest rate cycle will impact the new market negatively going forward.

The SA Reserve Bank raised interest rates in November, as well as in January and March this year, and the upward trend is set to continue over the balance of the year in an effort to subdue inflation.

Upward pressure on food, fuel and electricity prices will adversely impact all households over the short- to medium-term, and consumers should brace themselves for ongoing cost of living increases.

Vehicle exports declined during the month but prospects for 2022 remain optimistic on the back of further new locally manufactured model introductions during the year.

Global growth is expected to moderate as the Russia-Ukraine conflict increasingly impacts on demand and supply chains, in particular in Europe, the domestic industry’s top export region.

Vehicle production and consequently vehicle exports have already been hampered by the ongoing global semiconductor shortage and global trade flows are anticipated to deteriorate even further if the conflict in Ukraine is drawn out.