Vehicle markets gaining momentum

23rd July 2021

     

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Reflecting on the new-vehicle-sales statistics for last month, naamsa | The Automotive Business Council said that the recovery in the new-vehicle market is gaining momentum in line with industry expectations, notwithstanding the country moving from Alert Level 2 to Alert Level 3 in mid-June and subsequently to adjusted Alert Level 4 lockdown restrictions at the end of June 2021.

Aggregate domestic sales in June 2021, at 38 030 units, reflected an increase of 6 387 units, or 20.2%, from the 31 643 vehicles sold in June 2020. Export sales also recorded a gain of 9 567 units, or 50.9%, to 28 384 units in June 2021 compared with the 18 808 vehicles exported in June 2020.

Overall, out of the total reported industry sales of 38 030 vehicles, an estimated 32 847 units, or 86.3%, represented dealer sales, an estimated 7.6% represented sales to the vehicle rental industry, 3.9% to industry corporate fleets, and 2.2% sales to government.

The June 2021 new passenger car market at 24 482 units had registered an increase of 5 348 cars, or a gain of 28.0%, compared with the 19 134 new cars sold in June 2020. The car rental industry accounted for 10.5% of car sales in June 2021.

Domestic sales of new light commercial vehicles, bakkies and mini-buses, at 11 208 units during June 2021, recorded an increase of 986 units, or a gain of 9.6%, from the 10 222 units sold during June 2020.

Sales for the medium commercial vehicles and heavy trucks and buses segments of the industry reflected a mixed performance and at 687 units and 1 653 units, respectively, showed an increase of 110 units, or 19.1%, in the case of medium commercial vehicles, and, in the case of heavy trucks and buses a decline of 57 vehicles, or 3.3%, compared with the corresponding month last year. The June 2021 export sales number at 28 384 units reflected an increase of 9 576 vehicles, or 50.9%, compared with the 18 808 vehicles exported in June 2020.

For the first six months of 2021 vehicle exports were 65.8% above the corresponding period last year.

The new-vehicle market continued its gradual recovery during the month of June 2021 in the face of a number of challenges. Ongoing stronger sales through the dealer channel signal improved consumer and business sentiment. Rental companies are re-fleeting again while the delayed replacement cycle, due to lockdown restrictions in 2020, are catching up in contributing to improved new-vehicle sales.

However, of concern are persistent electricity supply disruptions, port delays, and the third Covid-19 wave of infections being experienced. The vaccine rollout is slow and a third wave of the pandemic threatens to dent the momentum in consumption in the country, especially if the adjusted Alert Level 4 lockdown restrictions are extended for longer than the initial two-week period.

Compared with the first six months of 2020, the new-vehicle market was 40.1% above the corresponding period last year, but compared with the pre-Covid-19 first six months of 2019, the new-vehicle market still fell 11.7% short, highlighting that a full recovery would be protracted until around 2023.

Vehicle exports continued their upward momentum during the month and according to South Africa-based financial services group Absa’s Purchasing Managers’ Index (PMI), the outlook for manufacturers targeting the European and US export markets remains very bright, with recent international PMI readings remaining at or near record-high levels. In terms of a timeframe for a full recovery to pre-Covid-19 vehicle record export levels, much will depend on the ongoing path and management of the global pandemic.

Edited by Zandile Mavuso
Creamer Media Senior Deputy Editor: Features

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