The new-vehicle market during May recorded 12 932-unit sales as the industry spluttered back to life following the Alert Level 5 national lockdown.
This number is 68% down on May last year and is only about 30% of the market activity seen in the first two months of the year.
The new passenger-car market registered 9 019 sales, which is 65.4% down on May last year.
The light commercial vehicle (LCV) market was slower to start and recorded 3 073-unit sales during May, which is a 74.8% drop compared with the same month last year.
Sales for medium and heavy trucks also remained weak.
The medium truck market recorded sales of 304 units, which is a 55.5% decline compared with May last year.
Heavy truck and bus sales saw a 62.8% drop, to 536 vehicles.
Export sales reached 10 819 units, which is a 64.1% decline compared with the 30 152 vehicles exported in May last year.
Vehicle and asset finance group WesBank warns that the South African automotive industry should expect to face reduced levels of activity for the remainder of the year.
“While we were reassured by the levels of demand from consumers and business, judged by volumes of applications for finance during May, we shouldn’t expect sales to return to any form of normality for the remainder of the year,” says WesBank marketing and communication head Lebogang Gaoaketse.
WesBank application volumes across new and used vehicles were between 65% and 70% of the levels seen during May last year.
“The industry’s ability to actually trade during May was also impacted by practical considerations, as well as the actual appetite to conclude a deal in this environment,” says Gaoaketse.
WesBank believes that the further reduction in the interest rate, providing a 2.5% relief for consumers and businesses since lockdown started, should provide some level of assistance for indebted customers, while providing stimulus for new deals.
“These May volumes are reassuring given the slow resumption of activity during the month from such an unprecedented circumstance,” notes Gaoaketse.
“With a full month of sales ahead and more freedom within Alert Level 3 regulations, we will begin to understand what the new normal level of activity will be in the new-vehicle market.”
Industry may be reassured by the initial levels of demand seen in May, but buying behaviour will inevitably be changing, adds Gaoaketse.
“WesBank data indicates an increase in demand for used cars in terms of vehicle applications, supported by a larger than usual increase in the deal-size of those used-car finance agreements.
“This supports some forecast analysis of a trend for consumers to buy down into the used car market in order to reduce the size of their car repayments and mobility budgets.”