The Automative Business Council reported a 24.6 percent increase in new vehicle sales during August and said on Wednesday that the knock-on effects of the civil unrest in parts of Gauteng and KwaZulu-Natal and the cyberattack on Transnet operations were still visible on vehicle exports.
The council said aggregate domestic new vehicle sales were 41 425 units in August, reflecting an increase of 8 166 units, or 24.6 percent, from the 33 259 vehicles sold during the corresponding month last year.
Export sales recorded a decline of 3 583 units, or 15.6 percent, to 19 446 units this year compared to the 23 029 vehicles exported at the same time last year. However, for the year-to-date, vehicle exports were still 37.7 percent ahead of the same period last year.
“Although the knock-on effects of the economic disruptions caused by the civil unrest in July 2021 and the cyberattack on Transnet operations negatively impacted on the industry’s export performance during the month, the domestic automotive industry will continue to benefit from the strong rebound in global economic activity in 2021 and the favourable conditions abroad,” said the council.
Overall, out of the total reported industry sales of 41 425 vehicles, an estimated 34 620 units, or 83.6 percent, represented dealer sales, an estimated 12 percent represented sales to the vehicle rental industry, 2.5 percent to industry corporate fleets and 1.9 percent sales to the government.
“The return of the adjusted level 3 lockdown regulations and the improvement to civil stability supported the new vehicle market’s gradual recovery during the month.
“Positive factors that will stimulate the inevitable new vehicle demand include the positive macro-economic outlook, rejuvenation of rental fleets, subdued consumer price inflation, and interest rates to remain at historically low levels for the foreseeable future,” said the council.
It said business and consumer confidence would continue to challenge the industry’s recovery over the short to medium term.
New passenger car market at 27 157 units had registered an increase of 7 822 cars, or a gain of 40.5 percent, compared to the 19 335 new cars sold last year.
Investec economist Lara Hodes said the looting and unrest that took place in July and uncertainty about the trajectory of the virus could dampen confidence, impeding consumers’ willingness to buy big ticket items like cars. Hodes said the latest business confidence reading by Sacci in July dropped by 3 index points when compared to the previous month.
“A boost to sentiment is needed to encourage fixed investment and thereby growth. Based on the re-based GDP figures we are projecting growth of 4.2 percent year-on-year this year, off last year’s low base,” Hodes said.
The car rental industry supported the new passenger car market during the month and accounted for a sound 14.2 percent of car sales in August. Domestic sales of new light commercial vehicles, bakkies and mini-buses at 11 749 units during August 2021 had recorded an increase of 407 units, or a gain of 3.6 percent, from the 11 342 light commercial vehicles sold during August 2020.
Chair of the National Automobile Dealers’ Association Mark Dommisse said this was an outstanding performance as the economy is still recovering from the effects of the unrest in KwaZulu-Natal and Gauteng in July, as well as the substantial disruptions at the ports as a result of the unrest, coupled to the cyberattack on Transnet operations.
“There are other forces at play too, with supply being the major one. The global shortage of semiconductors continues to play havoc with production and is causing many factories to be idled,” said Dommisse.
BUSINESS REPORT