The Toyota Hilux was once again South Africa’s top-selling vehicle in August.
The Toyota Hilux was once again South Africa’s top-selling vehicle in August.

SA vehicle sales take another year-on-year plunge in August, as Eskom hinders recovery

By Jason Woosey Time of article published Sep 2, 2020

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JOHANNESBURG - While the South African new vehicle market saw a modest improvement of 3.4 percent in August, versus the previous month, sales are still substantially down year-on-year, with last month’s total sales figure of 33 515 units representing a 26.3 percent decline over August 2019.

Passenger cars once again took the biggest plunge, falling by 32.6 percent to 19 545 units, largely thanks to almost zero demand from the rental car industry, while light commercial vehicles fell by 19.4 percent. On the upside, there was a slight uptick in the market for medium and heavy commercial vehicles, which saw encouraging year-on-year gains of 7.7 percent and 9.0 percent respectively.

For the record, 92.1 percent of vehicle sales in August took place through the conventional dealer channels, while 4.2 percent represented sales to government, and 2.9 percent to corporate fleets. Just 0.04 percent went to the rental car industry, which is reeling under the international tourism ban.

On an equally worrying note, vehicle exports were down by 46.9 percent year-on-year, and are on track to fall by around 40 percent in 2020. However, Naamsa believes there is potential for recovery here as major export destinations are starting to ease their lockdown restrictions, with many actively stimulating their new vehicle markets.

Toyota still dominating

On the domestic front, Toyota continued to lead the way with total sales of 7743 units, while Volkswagen followed with 5181 sales and Ford took third spot with 2810. Hyundai was fourth with 2460 sales, and was followed by Nissan (2198), Isuzu (1974), Mercedes-Benz (1540), Renault (1463) and Suzuki (1350).

Currently Naamsa is not reporting individual new car sales figures, However, Toyota has disclosed that it sold 3610 Hilux bakkies in August, which would certainly have made it the country’s top selling vehicle.

Tough times ahead

Activity in the new vehicle market is expected to remain slow for the remainder of the year due to the uncertainties relating to the economic impact of the coronavirus pandemic and short-term budget pressures, Naamsa warns, and Eskom is not helping matters.

“Not only will the economy have to contend with consequences of the economic lockdown, it now has to deal with further rolling blackouts which comes at the worst possible time for the South African economy,” Naamsa said in response to August’s sales figures.

“Eskom announced that the heightened risk of load-shedding will haunt the South African economy for another year. All this points to an already hard-hit economy with no expectations for a quick recovery any time soon.”

Yet there are some good deals out there

Further month-on-month gains are certainly a possibility for the remainder of the year as car dealers pitch numerous special deals at consumers in an effort to stimulate the market, as WesBank marketing head Lebogang Gaoaketse points out.

“While this (month-on-month improvement) is by no means an immediate sign of recovery for the market, it is certainly a good sign of some stimulus.

“However, consumers should remain careful of their levels of debt, however attractive these deals seem,” Gaoaketse cautioned.

He also urges consumers to fully understand the terms of the finance offer, not only the amount reserved in balloon payments, and to allow for critical expenses, including insurance and maintenance, within their affordability calculation.

IOL Motoring

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