Domestic new-vehicle sales dropped by 0.7% in February, to 43 485 units, compared with the same month last year – a much smaller margin of decline than expected from forecasts that have predicted up to a 4% drop in the market in 2020.

New-vehicle sales numbers released on Monday showed that February new-passenger car sales gained a surprising 7.6%, to reach 29 665 units.

Sales of new bakkies, minibuses and vans, at 11 625 units, however, declined by 17.7%.

Truck sales also showed a positive trend.

Sales of medium trucks, at 686 units, grew by 3.8%.

Sales of new heavy trucks and buses increased by 3.7%, to 1 509 units.

New-vehicle exports, however, shrunk by 8.4%, to 30 832 units.

While South Africa’s budget speech may only have an impact on new-vehicle sales during March, the market seemingly already reacted positively to it during February, says vehicle finance group WesBank.

“More selling days than usual during February thanks to the leap year may also have contributed to the improved performance of the market,” says WesBank marketing and communication head Lebogang Gaoaketse.

February traditionally provides the first realistic picture of the year’s outlook for sales, with January being skewed by the holiday season.
The bad news is that the economic outlook for the country isn’t going to give the market an easy ride, states WesBank.

“While consumers were shown some relief in the Budget in income tax terms, increases in toll fees and fuel levies will continue driving the total cost of ownership up, forcing consumers to be increasingly vigilant about their discretionary spend,” notes Gaoaketse.

“Simply put: if there is an opportunity for consumers to defer vehicle purchases, we expect them to do so.”

Consumer price inflation also rose to a seven-month high in January on the back of fuel prices that were 15% higher than a year ago.
While remaining within the Reserve Bank’s 4.5% target range – which it has for 14 months,  the longest streak in 14 years – the forecast is for it to average 4.7% this year.

“All of this will continue to put pressure on household budgets and directly impact new-vehicle sales as consumers tighten their belts,” says Gaoaketse.

“However, the February market performance is still a welcome sign of positivity.”

Top-selling cars, bakkies and vans in February:
1.Toyota Hilux 2 895
2. VW Polo Vivo 2 417
3. VW Polo 2 120
4. Ford Ranger 1 878
5. Isuzu D-Max 1 333
6. Nissan NP200 1 167
7. Toyota Hi-Ace 1 083
8. Ford Figo 1 068
9. Ford EcoSport 997
10. Toyota Fortuner 975

* BMW South Africa and Mercedes-Benz South Africa will, from this year onwards, report sales information quarterly, according to global directives. Included in the numbers above are estimates for domestic new vehicle and export sales for both companies.