Marginal year-on-year recovery in new-vehicle sales in June

28th July 2017

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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Data released by the Department of Trade and Industry indicates that new-vehicle sales in June delivered some growth, even if marginal, following two months of decline.

Sales numbers showed that the South African total new-vehicle market inched up 0.9%, compared with June last year, to 45 369 units.

New-vehicle exports from South Africa also delivered some good news, increasing by a modest 1.4% to 31 631 units.

Not all segments of the new-vehicle market gained ground, however.

The new passenger car market in June declined by 2.2% to 28 639 units.

Sales of bakkies, panel vans and minibuses jumped a healthy 8% to 14 278 units.

Medium truck sales also recorded growth, increasing by 4.4%, compared with June last year, to 800 units.

Sales of heavy trucks and buses declined by 2.8% to 1 652 units.

The National Association of Automobile Manufacturers of South Africa (Naamsa) notes in a statement that “the [June] domestic sales numbers had been reasonably encouraging, at the upper end of general expectations”.

The sales outlook for the second half of the year, however, remains uncertain.

“Political tensions and subdued economic growth prospects continue to impact negatively on business confidence and consumer sentiment,” says Naamsa.

“The challenges confronting South Africa are varied and complex. Concerted steps are required by business, government and labour to create a more investor-friendly environment as a means of boosting growth.

At this stage, domestic new-vehicle sales for 2017 were likely to remain flat, at best,” the association said. “On the other hand, vehicle exports should benefit from expectations of continued improvement in global growth.

Negative to Date
The total new-vehicle market in South Africa was down 1.3% for the first six months of the year, with exports declining by 7.4%, says WesBank brand and communications head Rudolf Mahoney.

“I don’t imagine that we will have another year [like] last year, when new-vehicle sales were down by more than 11%.

I think we are at the bottom of the drop, and we’ll probably move sideways for the rest of the year. However, this depends on how the country’s political scenarios play out going forward.”

Mahoney notes that the average new-car deal breached R300 000 for the first time ever in June, with the average used-car deal now at R202 000.

“A high number of clients are migrating from new to used and there are a lot of demo stock in the used market.”

He adds that the number of consumers opting for fixed interest rates, compared with linked interest rates, was an even 50:50 split in March. The number of consumers seeking the security of fixed interest rates had, however, suddenly and sharply increased to 63% in June, compared with 37% seeking a linked interest rate.

“This indicates that there is a lot of nervousness in the market.”

New Most Popular Vehicle for SA?
The most popular vehicle on sale in South Africa last year was the Toyota Hilux, at 35 428 units.

In fact, the one-ton bakkie has achieved sales leadership in South Africa for 44 years out of the past 47 years, notes Toyota.

However, Ford’s Ranger managed to outsell the Hilux for the first six months of 2017, at 17 014 units, compared with the Hilux’s 16 827 units.

Both pick-ups are produced in South Africa.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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