Colin-on-Cars – Vehicle sales bounce back

New vehicle sales last month climbed by 24,6% compared to the preceding year and naamsa | The Automotive Business Council says the new vehicle market recovered from the economic disruptions caused by the unrest in July 2021 but, the knock-on effects of the disruptions as well as the cyberattack on Transnet operations were still visible on vehicle exports during August.

August new vehicle sales were 41 425 units, reflecting an increase of 8 166 units, or 24,6%, from the 33 259 vehicles sold during the corresponding month last year. Export sales recorded a decline of 3 583 units, or 15,6%, to 19 446 units this year compared to the 23 029 vehicles exported at the same time last year.  

Overall, out of the total reported industry sales of 41 425 vehicles, an estimated 34 620 units, or 83,6%, represented dealer sales, an estimated 12,0% represented sales to the vehicle rental industry, 2,5% to industry corporate fleets, and 1,9% sales to government.

The August 2021 new passenger car market at 27,157 units registered an increase of 7 822 cars, or a gain of 40 5%, compared to the 19 335 new cars sold last year. The car rental industry supported the new passenger car market during the month and accounted for a sound 14 2% of car sales in August 2021.

Toyota South Africa Motors (TSAM) led the field in August new-vehicle sales with Hilux in the top spot. Notching up 3 335 sales, Hilux sales were made up of 1 732 double cabs, 1 058 single cabs and 545 extra cabs.

This, together with performances from Hiace (1 298), Starlet (1 203), Urban Cruiser (876), Fortuner (856) and Corolla Quest (806) saw Toyota recording a total of 10 543 (market share: 25,4%) sales across the Toyota, Lexus and Hino brands.

Leon Theron, Senior Vice President of Sales and Marketing for TSAM, says: “Ongoing challenges in the domestic new vehicle segment are worrying.”

Domestic sales of new light commercial vehicles, bakkies and mini-buses at 11 749 units during August 2021 recorded an increase of 407 units, or a gain of 3,6%, from the 11 342 light commercial vehicles sold during August 2020. Sales for medium and heavy truck segments of the industry reflected a weak performance and at 719 units and 1 800 units, respectively, showed a decline of 56 units, or 7,2% in the case of medium commercial vehicles, and, in the case of heavy trucks and buses a decline of 7 vehicles, or a fall of 0,4%, compared to the corresponding month last year.

“South Africa’s network of retail motor vehicle dealers once again showed tremendous resilience in tough trading conditions in August, with numbers pointing to a much more resilient market, which is encouraging,” says Mark Dommisse, Chairperson of the National Automobile Dealers’ Association (NADA).

“The global shortage of semiconductors continues to play havoc with production and is causing many factories to be idled. This shortage is likened to the COVID-19 pandemic, in that it will not go away. In fact, the problem seems to be getting more serious as time goes by with manufacturers either pausing production or deleting chip-specific functionality from certain model lines.

“Then, here in South Africa, we are still encountering delays caused by the unrest and the port disruptions which is keeping customers waiting for their new vehicles. In some cases, they are tired of waiting and are changing brands by shopping elsewhere. Unfortunately, we will be forced to face this uncertainly for a while still and I don’t think supply will stabilise for some time to come.

“We also have to deal with a fluctuating Rand – down one day and up the next. This is a volatile situation, and we believe this rollercoaster ride will continue in the coming months, with political uncertainty also playing a role.”

“Taking into account that July sales were significantly disrupted, the fact sales were up 8,9% over June indicates some reparations from impacted July sales,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank.

“We have consistently held the optimistic view of recovery for the industry during 2021, with various signs showing growing confidence from both consumers and business.”

In terms of demand, WesBank believes the market is out-running the industry’s ability to supply.

“Between the challenges of the pandemic, micro-chip shortages affecting international production – and therefore import supply to South Africa – and the prevailing market conditions that have simply hampered the free supply of certain models, the new vehicle market is poised to capture growth opportunities while trying to keep up.”

The bank’s demand is measured by applications for finance that continue to sit at levels equivalent to or above those experienced prior to the pandemic.

“This is reassuring in two senses,” explains Gaoaketse. “On one hand, consumers have been keeping their vehicles for longer, especially delaying purchases through the pandemic. This will create natural demand on the replacement cycle as consumers need to renew their ageing vehicles, probably with lower mileage.

“The market showed good recovery during August from the loss of momentum experienced in July. The outlook for the remainder of the year looks positive and will hopefully not be impacted by further lockdown restrictions or other unforeseen factors.”

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