South African car sales plunged in March, but worst still to come
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Johannesburg - There was never any doubt that the economic and logistical effects of the Covid-19 pandemic would have a devastating effect on new vehicle sales, and March saw the first significant slump in the market.
According to Naamsa, overall vehicle sales declined by 29.7 percent, versus the same month last year, with 33 545 units sold. As expected, export sales also declined, in this case by 21.5 percent.
Glancing at the segments, it was the light commercial vehicle market that took the biggest knock last month, with sales plummeting by 37.1 percent year-on-year, while passenger cars saw a 26.8 percent drop. On the trucking front, the medium and heavy commercial vehicle markets declined by 18.8 and 18.6 percent, respectively.
However, WesBank warns that the real impact on sales will only be felt in April, as the lockdown only affected three sales days in March, although negative consumer sentiment surrounding the outbreak did have an impact on sales earlier in the month.
“The market was looking to establish some form of stability judging from February’s performance, only to be undone by the Covid-19 global pandemic,” said WesBank’s communications head Lebogang Gaoaketse. “Looking at international markets already under lockdown, we can expect April to look even worse as consumers stay home and only essential services are delivered from dealer workshops.”
Although the recent interest rate reduction is good news, the Moody’s rating downgrade poses another major challenge for South Africa, Naamsa added.
“South Africa was already in a recession before the Covid-19 had any significant impact. In exacerbating the situation further, the Moody’s rating downgrade during March 2020 comes at a time that the country is in the midst of pulling all its resources and capacity together to mitigate the impact of Covid-19 across the economy,” the manufacturers’ association stated in its monthly sales report.
“The country’s resources and capacity are being stretched in addressing this extraordinary situation and the downgrade opens another major challenge for South Africa.”
Regrettably, it appears as though Naamsa is no longer making sales data for individual vehicle models available to the public. However, WesBank did release a graphic showing the country’s top three sellers in the passenger and LCV sectors.
The Toyota Hilux dominated the light commercial market with 2 729 sales in March, followed by the Ford Ranger (1 263) and Toyota Hiace (1 120).
The Volkswagen Polo topped the passenger car list with 2 116 units sold, while its Polo Vivo sibling came second (1 561) and the Toyota Fortuner third (1 168).