RELIEF AS CAR SALES RISE
New-vehicle market shows upward trend for first time in years
THE improvement was not as strong as expected‚ but after three consecutive years of decline in new-vehicle sales‚ the motor industry is relieved that the market showed any kind of upward movement last year.
The industry sold 557 586 new vehicles in the domestic market last year – a 1.8% improvement on the 547 547 achieved in 2016.
Car sales followed a similar trend‚ up 1.9% from 361 264 to 368 068.
The figures were published yesterday by the Department of Trade and Industry.
The Toyota Hilux and Ford Ranger were South Africa’s top-selling vehicles of any description last year, but despite their success‚ the overall light commercial vehicle market – mainly bakkies – managed only 0.9% year-on-year growth‚ from 159 283 to 163 346.
Heavier commercials‚ including buses‚ fared less well. Mediums were down 6.4%‚ heavies 3.5% and buses 11.8%.
Only extra-heavies bucked the trend‚ rising 2.6%.
The true performance of all these categories‚ however‚ was muddied by the continued refusal of Mercedes-Benz SA to provide a detailed breakdown of its sales.
The company said it is prevented from doing so by its German parent.
The overall improvement in sales for last year would have been stronger but for a slide last month.
Total sales were 2.4% weaker than for the corresponding 2016 month‚ falling from 41 644 to 40 636. Cars suffered a significant setback‚ down 6.4% from 28 354 to 26 550. Light commercial vehicles did their own thing again‚ growing sales 7% from 11 325 to 12 115.
The National Association of Automobile Manufacturers of SA (Naamsa) described the full-year recovery as encouraging in the face of slow economic growth‚ pressure on consumers’ disposable income and low levels of consumer and business confidence.
However‚ the improvement would not have happened without unprecedented manufacturer and dealer sales incentives in the second half of the year‚ and strong demand by car rental companies‚ which absorbed 16% of all new cars.
Naamsa said while the improvement was welcome‚ it should be seen in historical context. The 557 586 market total was still well short of the industry’s record of 714 314 units‚ achieved in 2006.
The association predicted further growth this year to 572 000.
It said: “SA financial markets have reacted positively to the outcome of the December ANC elective conference. However‚ economic and fiscal policy uncertainty‚ political challenges‚ the risk of further credit-rating downgrades and increasing geopolitical tensions make forecasting difficult.
“On the positive side‚ several recent economic indicators support the view that the SA economy is performing better than anticipated despite low levels of business and consumer confidence.
“Barring a further credit-rating downgrade‚ an improvement in economic growth from about 1% in 2017 to around 1.9% in 2018 remains possible and this would lend support to new-vehicle sales in the domestic market.”
New-vehicle exports continued to lose momentum in December‚ down 7.1% to 17 374 from 18 707 a year earlier. As a result‚ full-year shipments retreated 4.6% from 344 820 to 329 053. In view of comments early last year‚ confidently predicting record exports‚ that was disappointing.
But targets became unachievable once Volkswagen SA (VWSA) halted exports in the final quarter of the year – running down local production in preparation for the launch of new vehicles next month.
Assuming VWSA is back up and running on schedule‚ and with other manufacturers bullish about exports‚ Naamsa is predicting an export total of 366 000 this year.
That would be a new record – albeit a year behind schedule. – BusinessLIVE
‘ Improvement in economic growth would lend support to new vehicle sales