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Vehicle sales surprise on the upside despite mounting challenges in market conditions

Further strong sales in the next few months look less promising. (AP Photo/Tsugufumi Matsumoto)

Further strong sales in the next few months look less promising. (AP Photo/Tsugufumi Matsumoto)

Published Jul 4, 2022


June 2022 new vehicle sales were “inspiring” considering the ever-increasing challenges in market conditions, but further strong sales in the next few months looks less promising.

National Association of Automobile Manufacturers of South Africa (Naamsa) data released on Friday showed June domestic new vehicle sales increasing 7.6 percent to 41 019 units from 38 131 vehicles sold in June 2021.

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Export sales also increased 18 percent, to 33 054 units compared to 28 010 vehicles exported in June 2021.

“As consumers start to feel the pinch of rising food and fuel prices, with higher interest rates on their cost of living, the spill-over effect of reduced disposable income will result in lower demand for non-essentials.”

Stage 6 load shedding would also cost the economy dearly at a time when it was facing a myriad of headwinds battling to recover, Naamsa said.

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National Automobile Dealers’ Association chairman Mark Dommisse said the strength of the vehicle market continued to “astound industry commentators and perform against the odds in June.”

He said “the buying down trend is continuing apace, which is evidenced by the strong performance of Suzuki, bearing in mind its model line-up falls into the small vehicle category. Categories for smaller cars, SUVs and crossovers are gaining new entrants virtually every month, which means buyers are generally able to strike favourable deals in such a competitive market.”

He said there were some positive factors driving sales, including the lifting of the compulsory wearing of masks and the easing of restrictions on incoming tourists, which would buoy consumer confidence and the rental market.

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Out of industry sales of 41 019 vehicles, 85.2 percent represented dealer sales, 8.6 percent were sales to the vehicle rental industry, 5 percent to industry corporate fleets, and 1.2 percent were sales to the government, Naamsa said.

The June 2022 new passenger car market increased 20.6 percent, compared to the 24 497 new cars sold in June 2021, supported by the car rental industry during the month and which accounted for 11.2 percent of sales in the month.

New light commercial, bakkie and minibus sales at 8 877 units fell by 20.8 percent from the 11 206 light commercial vehicles sold in June 2021.

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Medium and heavy truck sales at 697 units and 1 900 units respectively, showed an increase of nine units, or 1.3 percent in the case of medium commercial vehicles, and, in the case of heavy trucks and buses an increase of 160 vehicles, or a gain of 9.2 percent, compared to the corresponding month last year.

Light commercial vehicle exports lagged due to the knock-on effects of the KZN floods as well as the ongoing shortage of semiconductors impacting on vehicle production.

For the first half of the year, vehicle exports were now 2.9 percent below the same period in 2021.

“Although the ongoing war in Ukraine, supply chain disruptions and the risk of stagflation are hampering global growth and will weigh on the domestic industry’s export potential, prospects for 2022 remain optimistic on the back of further new locally manufactured model introductions during the year,” Naamsa said.

WesBank head of marketing Lebogang Gaoaketse said first half industry sales at 253 442 units represented an 11.4 percent increase over the same time in 2021.

“While we should celebrate this recovery of new vehicle sales, this performance must be considered within the context of more stringent Covid-19 regulations during the first half of last year,” said Gaoaketse.


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