New vehicle sales continued their downward trend in July.

Total market sales for July declined by 3.7%, to 46 077 units, compared with the same month last year.

New passenger car sales exercised the biggest drag on the market, dropping by 8.2%, to reach 29 477 units.

Sales of new bakkies, minibuses and vans, at 13 852 units, gained 2.9%.

Sales of medium trucks, at 801 units, jumped by 14.9%.

Sales of new heavy trucks and buses did even better, increasing by 21.4%, to 1 947 units.

July export sales, at 34 297 vehicles, grew by a healthy 22.1%.

“While the small interest rate cut during July was warmly welcomed by industry and consumers alike, it may take some more incentive from the Reserve Bank to jump-start the economy and entice consumers back into the new-vehicle market,” says WesBank executive head of motor Ghana Msibi.

“While small, its effects will be enjoyed by household incomes in the longer term, but another cut before the end of the year will be welcome, and effective.”

National Automobile Dealers’ Association (NADA) chairperson Mark Dommisse echoes this sentiment.

“In order for the rate cut to have any significant impact, it needs to be accompanied by robust structural reforms that deal with key underlying issues in the economy.

“We implore government to aggressively pursue its efforts to stimulate growth.”

NADA represents franchised car and commercial vehicle retailers in South Africa.

“The economy remains tough,” adds Msibi. “Retrenchments across the board are hitting all sectors hard and the motor industry is feeling the effects of significantly reduced spending power. Consumers simply cannot afford to replace their vehicles, never mind enter the market for the first time.”

July was the longest selling month of the year with 23 working days.

While this technically makes the market’s performance even worse, it is interesting to note that demand is increasing.

“WesBank experienced its best month this year in applications received for finance,” says Msibi.

“While this clearly didn’t translate into sales, it is reassuring for the industry that consumers are at least shopping for vehicles.”

Dommisse also regards the increased bank finance applications as “encouraging”.
 
“Affordability remains a key factor in motorists’ purchasing decision, with buying cycles being pushed out significantly,” he notes.

“We have seen a substantial drop in the luxury segment of the market, with sales in the lower R300 000 and below price band seeing the lion’s share of the [sales] mix.”

Dommisse believes that the continued decline in new vehicle sales reflects the current political and economic environment.

“Consumers will continue delaying decisions on big ticket items such as new vehicles until we have greater stability all round.”
 
Top-selling cars, bakkies and vans in July:
1. Toyota Hilux 2 996
2. VW Polo Vivo 2 621
3. Ford Ranger 2 217
4. VW Polo 2 076
5. Nissan NP200 1 730
6. Isuzu D-Max 1 692
7. Toyota Hi-Ace 1 520
8. Nissan NP300 982
9. Hyundai i20 863
10. Ford EcoSport 839

Top Exporters in July:
1. Mercedes-Benz South Africa 9 495
2. Ford Motor Company of Southern Africa 9 253
3 .BMW Group South Africa 6 788