South African new-vehicle sales yet again retreated into negative territory in 2018, declining by 1%, to 552 190 units, down from the 557 703 units sold in 2017.
The new-vehicle market in 2017 lifted its head by 1.9%, after spending the previous three years in the red.
Commenting on the data, released on Tuesday, the National Association of Automobile Manufacturers of South Africa (Naamsa) said the drop in sales in 2018 reflected the country’s weak macro-economic environment, continued pressure on consumers’ disposable income, as well as fragile business and consumer confidence.
The 0.25% increase in interest rates, announced in November, also impacted new-vehicle sales.
“Current market conditions continue to be characterised by a buying-down trend with sales of entry-level vehicles, small utility vehicles and crossovers performing well in relative terms. The premium car segment continues to experience significant pressure,” noted Naamsa.
Looking at individual segments, new-car sales declined by 0.8%, from 368 114 units in 2017, to 365 246 units in 2018.
Sales of new bakkies, vans and minibuses dropped by 2.4%, to 159 452 units.
The South African new truck market, however, managed to deliver some cheer, with medium truck sales inching up 0.3%, to 7 913 units, and heavy truck sales increasing by 6.5%, to 19 579 units.
New-vehicle exports from South Africa also provided some good news, coming in at a record 351 154 units, up 3.9% on 2017’s 338 096-unit tally.
Growing exports nudged along domestic production, which increased from 601 178 vehicles in 2017, to around 610 000 vehicles in 2018.
Improvement Expected in 2018
Naamsa expected 2019 exports to improve by around 9.6%, to reach 385 000 units.
Domestic production is anticipated to increase by 7.8%, to 657 500 000 units.
Naamsa also anticipated South African new-vehicle sales to move up by 1% in 2019, to reach 558 000 units.
Growth is expected in all segments of the market.
Naamsa noted, however, that most automotive companies were “planning their operations on the basis of a flat market in 2019”.
“South Africa critically needs to achieve higher economic growth to fulfil its potential [and to] address the many challenges confronting the country in terms of development and employment. A higher economic growth rate is also essential to support higher domestic new vehicle sales volumes,” said the association.