New vehicle sales poised to tumble further
Figures from the National Association of Automobile Manufacturers of South Africa (Naamsa) yesterday showed that manufacturers only sold 33545 units in March compared to 47695 during the corresponding period last year.
WesBank marketing head Lebogang Gaoaketse said yesterday that April sales were likely to worsen as consumers continued to stay home and only essential services were delivered from dealer workshops.
“The emergence of the pandemic around the world had already impacted consumer sentiment earlier in the month, contributing also to the significant fall off in sales already experienced in March,” Gaoaketse said.
The entire domestic motor industry, in line with many global counterparts, has suspended vehicle production in view of the nationwide lockdown since March 27.
Naamsa said domestic sales fell to 33545 units in March while exports declined 21.5percent to 7905 from 36788 last year.
Gaoaketse said that with plant shutdowns already in place and dealers closed, the industry's main concern would be to protect jobs.
Out of the total reported industry sales, an estimated 28042 units or 83.6percent represented dealer sales, 6.2percent to the vehicle rental industry, 5.8percent to government, and 4.4percent to industry corporate fleets.
New passenger car sales fell 26.8percent to 22200 units compared to 30339 last year with the car rental industry accounting for 8.4 percent.
Light commercial vehicles, bakkies and mini-buses tumbled 37.1percent to 9 425 units while medium commercial vehicles declined 18.8percent and heavy truck and bus sales 18.6percent from March last year.
Naamsa said the motor industry was working with respective governments to support essential services, such as offering factories to produce ventilators and other medical equipment urgently required to fight against Covid-19.
The industry contributes 6.9 percent to the country’s gross domestic product (GDP) and in 2018, the export of vehicles and automotive components reached a record of R178.8 billion, or 14.3percent of South Africa’s total exports.
Investec economist Lara Hodes said the local recession was likely to persist into the first half of the year as a result of the global fallout from the coronavirus.
Hodes said Investec anticipated a GDP contraction of -2.7percent year on year in 2020, with risks tilted to the downside, depending on how quickly the virus was contained.
“This does not bode well for vehicle demand in the near-term,” she said.