Colin-on-Cars – Car sales crash

The new car market crashed by 18% in January compared to the same month last year and retails sales were the lowest they had been since August of last year – but there are expectations the market will pick up despite the monstrous hike in fuel prices about to kick in.

The National Association of Automobile Manufacturers of SA (Naamsa) said the gradual monthly recovery in the domestic new vehicle sales volumes continued during the month but the decline, compared with the pre-COVID-19 first month of 2020, was in line with industry expectations.

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Aggregate domestic sales at 34 784 units reflected a decline of 5 629 units, or 13,9%, from the 40 413 vehicles sold in January last year. Export sales recorded a second consecutive month of solid growth in January 2021 and at 22 771 units reflected an increase of 6 468 units, or 39,7%, compared to the 16 303 vehicles exported in January 2020.  

Overall, out of the total reported industry sales of 34 784 vehicles, an estimated 28 716 units, or 82,6%, represented dealer sales, an estimated 11,4% represented sales to the vehicle rental industry, 3,5% sales to government and 2,5% to industry corporate fleets. 

The January 2021 new passenger car market at 23 853 units had registered a decline of 5 220 cars, or a fall of 18,0%, compared to the 29 073 new cars sold in January last year. The car rental industry accounted for a sound 16,1% of car sales in January 2021. 

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“The burden of the pandemic, continued economic pressure and the resultant low levels of business and consumer confidence expectedly took their toll on new vehicle sales during January. But there was reason for light amidst that gloom, as the market continued to show signs of its slow recovery towards the hope of a better 2021,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank Vehicle and Asset Finance.

“January sales were in line with expectations considering the country started the sales year in a return to Level 3 lockdown,” “We expect new car sales to remain under pressure this year as a result of subdued demand from both retail and corporate sectors, as well as Government. However, the used car market will remain buoyant as consumers continue to seek to lower their vehicle-related expenses.”

It remains sobering 2020 recorded the worst industry performance in 18 years.

“Considering 2020 sales were 29,1% down on 2019, the performance of the new vehicle market in the last quarter and in January this year remains reassuring,” says Gaoaketse.

“It is also interesting to contextualise the broader economic environment over the last five years, the impact of which has merely been accelerated by the pandemic. The 2020 market is 38,4% lower than the 2015 volume of over 600 000 vehicles, indicating the sheer pressure of the past five years of recession. Then consider the purely organic fall-off in sales during 2016 was 11,4% lower than 2015 – almost half the decline in sales last year due to the pandemic – and perhaps the motor industry is actually fairing quite well considering the circumstances.

“Interest rates should remain at their low levels for some time in an attempt to stimulate market growth, but there will be little to no room for further cuts. This continues to provide a good opportunity for those consumers considering a new vehicle.”

A drop of 18% in the new car market in January, compared to January 2020, is a clear indication that the economic squeeze is on for vehicle buyers in South Africa, according to, which is the professional body representing more than 1 300 motor dealerships, and includes 85% of the new vehicle franchised outlets.

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“The light commercial vehicle market was only 4,9% lower month-on-month, with medium truck sales unchanged and sales of heavy trucks and buses up by 6,6%, indicating that there are still vehicles needed by businesses, but car buying consumers are delaying new passenger car purchases,” says Mark Dommisse, the Chairperson of the National Automobile Dealers’ Association.

“The market in January was soft, with a shortage of supply of certain models across the brands. However, we believe that the restaurant, beach and alcohol bans have influenced the need for driving for several months now, which means the purchase decision is being delayed by many ordinary motorists.

“February is likely to be little better than January as consumers remain reticent to commit to the purchase of big capital assets such as cars,” concluded Dommisse.

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