The new vehicle market remained strong last month despite indications of a further slowdown in other sectors of the economy.
The National Association of Automobile Manufacturers of South Africa (Naamsa) reported yesterday that total new car sales increased last month by 15.6 percent to 51 891 units from those sold in June last year.
All four segments of the new vehicle market registered an improvement in year-on-year sales last month. New car sales, assisted by new model introductions, improved by 14.3 percent to 35 918 units from vehicles sold in June last year.
Year-to-date new car sales are 11.8 percent higher than in the corresponding six months last year and Naamsa reported the daily selling rate last month remained at a five-year high.
Sales of new light commercial vehicles, bakkies and minibuses grew strongly last month by 22.1 percent to 13 421 units from the unit sales in June last year.
Sales of medium commercial vehicles rose last month by 11.7 percent year on year to an estimated 819 units and heavy truck sales by 1.4 percent to an estimated 1 733 units.
The sales include an estimate because Mercedes-Benz South Africa (MBSA) only gives a single total sales number for passenger cars, commercial cars and export sales.
Nico Vermeulen, Naamsa’s executive director, said new vehicle sales continued to perform remarkably well despite indications of further slowing in the domestic economy and remained on track for single-digit growth of up to 10 percent for this calendar year.
Isaac Matshego, an economist at Nedbank, said growth in total car sales moderated last month from the 20.7 percent growth recorded in May this year. Total sales in the second quarter shed 7.7 percent compared with the previous quarter, with all vehicle categories declining during the quarter.
However, total sales rose by 15.7 percent year on year in the second quarter after increasing by 6 percent in the first quarter of this year, he said.
Wessel Steffens, the head of Absa vehicle and commercial asset finance, said that new car sales were driven by improved affordability because of real price reductions over the past few years, low interest rates that made repayments more affordable, new product launches and exciting packages by manufacturers to attract buyers.
The lower base created last year by stock shortages because of the tsunami in Japan and floods in Thailand had buoyed sales to date this year but growth in the second half would decline because of the stronger base in the second half of last year, he said.
Steffens said consumers were addressing affordability constraints through lengthening the finance period while the increased percentage of applicants requesting residual values or balloon payments also indicated the increasing need to subsidise affordability.
“A longer replacement cycle for new cars is experienced, which will be exacerbated should an increasing numbers of balloon payments or residuals be allowed on 72 month finance terms,” he said.
Calvyn Hamman, the senior vice-president of sales and marketing at Toyota South Africa, said passenger vehicle sales last month recorded the strongest sales since 2006.
There was continued strong marketing activity among virtually all brands, which had created a buyer’s market further fuelled by a number of new vehicle introductions in key market segments, he said.
Mike Glendinning, the director of sales and marketing at Volkswagen South Africa, said new car sales last month were supported by sales to rental car companies, a seasonal phenomenon between June and October each year.