South African new-vehicle sales declined by 4.1% in 2015, compared with 2014. This follows a 0.7% drop in 2014, compared with 2013.
Unaudited data released by the Department of Trade and Industry show that South African new-vehicle sales decreased to 617 927 units in 2015, compared with 644 259 units in 2014.
Commenting on the data, the National Association of Automobile Manufacturers of South Africa (Naamsa) attributes the decline to a slowing domestic economy, interest rate increases, pressure on consumers’ disposable income and rising new-vehicle prices.
The new passenger car market contracted by 5.9% in 2015 to 412 826 units, while the light commercial vehicle segment inched up 0.4%, to 174 490 units.
Sales of medium commercial vehicles declined by 4.9%, to 10 488 units, while sales of heavy trucks and buses dropped by 2%, to 20 123 units.
New-vehicle exports, however, set a new record, at 337 748 units, up 20.5% on the 276 936 vehicles exported in 2014.
Naamsa says industry trading conditions remained competitive in 2015, with more than 52 brands and 2 595 model
derivatives available to South African consumers.
Gloomy Outlook for 2016
Exports could improve by some 42 000 vehicles, or 12.5 %, in 2016, to reach “a conservative” estimate of 380 000 units, says Naamsa.
However, the association does not have the same optimism for the domestic market, and paints a rather gloomy picture for 2016.
“Domestically, economic growth continues to disappoint and South Africa’s fiscal position remains under pressure as a result of difficulties experienced by a number of State-owned enterprises, rising expenditure on social programmes and increased debt servicing costs,” notes Naamsa.
“International events that dominated 2015 are likely to continue in the current year and these include the global economic slowdown, notably in Asia, Africa, South America and parts of Europe, and the associated relentless downward pressure on commodity prices.
“South Africa’s economic situation remains constrained, with expectations of sluggish economic growth of around 1% at best [in 2016].
“The sharply lower value of the rand will translate into upward pressure on inflation, particularly in the case of new-vehicle prices in the coming year. “The impact of the severe drought throughout the country will also negatively affect economic growth.
“Expectations of further increases in interest rates and administered prices (electricity, water, fuel) will further pressurise personal disposable income.”
Naamsa expects a decline in new-vehicle sales of between 3% and 5% in 2016, with the market to reach around 598 200 units – roughly 50 000 units fewer than in 2014.
Factoring in the expected improvement in exports, domestic production is expected to increase from 615 000 vehicles in 2015 to around 660 000 vehicles in 2016 – a 7.3% improvement.