The Automotive Business Council (TABC) yesterday flagged the sector was facing Covid-19-induced manufacturing supply chain disruptions as it reported vehicle sales fell 17.6 percent last month, to 35 779 units, compared with the number sold in March. Photo: AP
The Automotive Business Council (TABC) yesterday flagged the sector was facing Covid-19-induced manufacturing supply chain disruptions as it reported vehicle sales fell 17.6 percent last month, to 35 779 units, compared with the number sold in March. Photo: AP

April vehicles sales drop by 17.6% amid disruptions in the supply chain sector

By Edward West Time of article published May 4, 2021

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CAPE TOWN - THE AUTOMOTIVE Business Council (TABC) yesterday flagged the sector was facing Covid-19-induced manufacturing supply chain disruptions as it reported vehicle sales fell 17.6 percent last month, to 35 779 units, compared with the number sold in March.

Year-on-year comparisons of vehicle sales were not meaningful, as last April was the height of the Covid-19 restrictions and only 574 vehicles were sold that month.

April’s export sales fell by 12 619 units, or 32.2 percent, to 26 522 units compared with March.

TABC chief executive Mike Mabasa said public holidays affected new vehicle sales and export performance in April compared to March.

However, in the first four months of this year, the new vehicle market was 28.3 percent above the same period last year.

He said renewed activity in the rental market, interest rates remaining at low levels, the easing of lockdown restrictions, and all five sub-components of the Absa Purchasing Managers’ Index being in positive terrain for the first time since 2012 would likely support business and consumer sentiment and the new vehicle market this year.

He warned that Covid-19-induced manufacturing supply chain disruptions, such as the global shortage of computer chips – an important part of modern vehicles – could affect the availability of specific models during the year.

The stock shortages have already affected sales.

Motus Retail and Rental chief executive Corné Venter said late last month that although consumers have an appetite for new vehicles, particularly in the entry-level, crossover and SUV segments, they were struggling to convert this interest into sales because of shortages of new vehicle stock globally. Motus dealerships represent the majority of the new vehicle brands in the retail market.

Mabasa said that although this year the new vehicle market was expected to rebound from last year’s level, new vehicle sales in 2020 had dropped back to the level of 18 years ago, and a recovery to the pre-Covid-19 level would take at least three years.

He said three main factors were likely to determine the trajectory of the global economy this year and the export performance of the domestic automotive industry: the path of the pandemic and how it was managed; the vaccine and how it was rolled out; and the actions of governments in response to the pandemic.

About 31 482 units, or 88 percent, of April’s vehicle sales represented dealer sales, about 7.5 percent represented sales to the vehicle rental industry, 2.4 percent sales to the government, and 2.1 percent to industry corporate fleets.

At 22 911 units, the April new passenger car market reflected a decline of 3 688 cars, or 13.9 percent, compared with March. The car rental industry accounted for 10.1 percent of car sales in April.

Domestic sales of new light commercial vehicles, bakkies and minibuses, at 10 879 units, fell 24.3 percent from the 14 364 light commercial vehicles sold during March.

Sales in the medium and heavy truck segments fell by 163 units, or 24.2 percent.

Export sales in April fell 32.2 percent, compared to the 39 141 vehicles exported in March.

For the first four months of this year, vehicle exports were 48.3 percent above those for the corresponding period last year.

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BUSINESS REPORT

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