Domestic new-vehicle sales in March increased by 16.5%, to 50 607 units, compared with the same month last year.

This is the highest monthly sales number since the pre-pandemic month of October, 2019, says Naamsa | The Automotive Business Council.

“The positive new vehicle market performance . . . could be attributed to pent up demand aligned with the increasing normalising of business conditions, as well as enticing new model choices in the domestic market.”

Of total industry sales, an estimated 85.8% represented dealer sales, with 8.2% of vehicles entering the country’s rental fleets. About 1.4% of new vehicles were sold to industry corporate fleets, with the remaining 4.6% procured by government.

The new-passenger-car market reached 33 790 units in March – a 27% jump on the same month last year.

The sale of new bakkies, vans and taxis did not see the same surge, and decreased by 2.7%, to 13 795 units.

The Nedbank Group Economic Unit says the decline, the first in the sector this year, probably suggests a shift in consumer demand from bakkies to more affordable passenger vehicles.

March medium-truck sales grew by 18.4%, reaching 798 units, while heavy-truck and bus sales jumped by 14.5%, to 2 044 units.

The National Automobile Dealers’ Association says these positive numbers could signal improved business confidence.

New-vehicle exports from South Africa were impacted by the escalation of the Russian-Ukraine war which hampered volumes to Europe, South Africa’s top export region.

This saw exports decline by 12.4% compared with the same month last year, to 34 285 units.

For the first quarter of the year, new-vehicle exports are now 4.1% below the same period in 2021.

Naamsa believes that prospects for the 2022 export market remain positive on the back of new locally manufactured model introductions later this year. 

The industry body warns, however, that global sales growth is expected to moderate as the Russia-Ukraine conflict increasingly impacts on demand and supply chains, in particular in Europe.

Vehicle production and exports are also being hampered by the ongoing global semi-conductor shortage, with global trade flows expected to deteriorate further if the conflict in Ukraine continues for a long period of time.

Looking at the domestic market, Naamsa says that escalating inflation risks, ongoing record fuel prices, low and stagnant economic growth and a rising interest rate cycle will all impact the new-vehicle market negatively going forward. 

“Upward pressure on food, fuel and electricity prices will adversely impact all households over the short to medium term, and consumers should brace themselves for ongoing cost of living increases.”

To date, first-quarter new-vehicle sales are up by 17.9% compared with the same period a year ago, and are 14% stronger on a quarter-on-quarter basis, notes Nedbank.