South Africa’s new vehicle market has remained remarkably buoyant in spite of the increasingly challenging economic conditions, boosted by rising exports.
This comes as aggregate domestic new vehicle sales in August rose 14 percent year-on-year, from 41 533 vehicles sold in August 2021 to 47 420 units, an increase of 5 887 units.
This also marks the fifth consecutive month of sales growth since the market’s slow April performance following a 6.2 percent year-on-year increase, or 43 593 vehicles sold in July.
The Automotive Business Council, also known as Naamsa, yesterday said export sales recorded an increase of 10 402 units, or 57 percent, to 28 662 units during the month compared to the 18 260 vehicles exported in August 2021.
For the year-to-date, vehicle exports were now 5.8 percent ahead of the corresponding period in 2021.
Naamsa said the dealer sales took the lion’s share of the monthly sales at 86.2 percent, while an estimated 8.3 percent represented sales to the vehicle rental industry, 4.3 percent went to industry corporate fleets, and 1.2 percent sales were to the government.
New car sales are a key economic indicator as buying new vehicles mostly requires the means, including access to credit, to do so.
Buyers have not been discouraged by rising annual consumer inflation which has reached a 13-year high, increasing to 7.8 percent in July, with further interest rate hikes anticipated for the remainder of the year.
Naamsa chief executive Mikel Mabasa said the new vehicle market’s performance for the year-to-date was still 13.8 percent ahead compared to the corresponding period in 2021.
However, Mabasa said the pace of steady growth being experienced in the market was expected to slow down for the balance of the year.
“The new vehicle market remained resilient despite increasingly tough economic conditions via elevated inflation and the upward trend in interest rates which are eroding households’ spending power and present an affordability challenge to consumers,” Mabasa said.
“Vehicle exports continued their strong upward momentum during the month but the knock-on effects of the market disruptions as well as the cyberattack on Transnet operations were still visible on the vehicle export performance during August 2021.
“While the deteriorating global growth outlook and tighter global financial conditions will dampen prospects for vehicle exports, in particular to Europe due to the repercussions of the ongoing geopolitical conflict between Russia and the Ukraine, further new locally manufactured model introductions are expected to enhance vehicle exports for the balance of the year.”
Industry players said that year-on-year sales comparisons appeared to be beginning to show a consistency of trend, indicating some form of stability returning to the new vehicle market.
WesBank said it was interesting to note the correlation in market performance this year against 2021.
WesBank head of marketing and communications Lebogang Gaoaketse said that last year August put in the second-best selling month at the time, March 2021 being the best sales month.
“Coincidentally, March 2022 sales have so far been this year’s best sales month,” Gaoaketse said.
“August sales are also reassuring in the sense that the volume increase comes off that relatively high base. Doing so in the face of the hike in interest rates during July appears not to have dampened any market demand.”
BUSINESS REPORT