Considering the number of vehicles sold in March, it is possible that 2021 will deliver better sales than initially expected, says National Automobile Dealers’ Association (Nada) chairperson Mark Dommisse.

“It is evident that the delayed replacement cycle is starting to catch up, helped by interest rates remaining low.

The used-vehicle market is also strong, which is good for the overall health of all sectors of the industry.

“Two months after a semi-hard lockdown, consumer confidence is improving. Potential buyers were wary in January, cautious in February and, now that the second wave has passed and the country’s economy is stabilising, people are looking to buy new vehicles again,” notes Dommisse.

“The rate at which the commercial vehicle market is growing is also good news, as this signifies improvements in the general economy, with the promise of an increasing number of infrastructure projects.”

Total South African new-vehicle sales increased by 31.8% in March, to 44 217units, compared with the 33 546 vehicles sold in the same month last year.

March new-passenger-car sales increased by 23.4%, to 27 330 units.

Domestic sales of new light-commercial vehicles, bakkies and minibuses jumped by 52.4% in March, to 14 375 units.

Medium truck sales, at 705 units, were up 11.6%, compared with March last year, while sales in the heavy truck and bus market increased by 35.2%, to 1 807 units.

Dommisse notes, however, that March sales do not provide a fair reflection of the new-vehicle market, considering the state of the market in the same month last year.

“In March 2020, sales were heavily impacted by trepidation about impending restrictions and the Level 5 hard lockdown which was announced on March 26.

“Looking ahead, we believe there will continue to be a shortage of certain new models, with an ongoing global shortage of semiconductors, or computer chips,” adds Dommisse.

“Hefty increases in fuel prices [early this month] will be another factor weighing on vehicle sales going forward, as this puts more strain on household budgets.

“Much will also depend on the effect of the Covid-19 pandemic, which is still negatively impacting many of the countries that supply built-up vehicles and components to South Africa.”

Vehicle finance specialist WesBank agrees with Nada that the March numbers are something to celebrate, even if they do not offer a fair comparison with March last year.

“Reassuringly, March sales show a 18.4% increase over February this year, a number more indicative of the real strength of the market,” notes WesBank Vehicle and Asset Finance marketing and communication head Lebogang Gaoaketse.

“With many of the brands indicating difficulty securing sufficient stock to meet demand, the new-vehicle market seems to be well on its way to recovery.

“With interest rates remaining stable at their low levels, a constantly – albeit slowly – improving supply of imported vehicles, and a slightly healthier economy operating within eased levels of restrictions, we expect the market to continue recovering well.”

While WesBank has seen a significant increase in the average deal size it finances, the company does not expect new-vehicle prices to increase dramatically, adds Gaoaketse.

“This will also provide added stimulus to the market and is a positive sign of consumer sentiment and ability to participate in the new-vehicle market.”

The strong March performance made an encouraging impact on year-to-date sales, notes WesBank.

First-quarter sales are just 0.9% down on the same period last year, with 116 225 unit sales recorded during the first three months of the year.