Lebogang Gaoaketse, Head of Marketing and Communications at WesBank, points out: “Price inflation in the pre-owned market and necessary replacement cycles some two years after the onset of the pandemic should be expected to fuel demand.”
This, despite the recent repo rate hike and expected massive increase in fuel prices.
Talking the numbers; Naamsa | The Automotive Business Council said aggregate domestic new vehicle sales in January 2022, at 41 382 units, reflected an increase of 6 743 units, or 19,5%, from the 34 639 vehicles sold in January 2021.
Export sales, however, dropped by 9,3%, to 19 089 units.
Overall, out of the total reported industry sales of 41 382 vehicles, an estimated 34 863 units, or 84,2%, represented dealer sales, an estimated 12,1% represented sales to the vehicle rental industry, 2,4% sales to government, and 1,3% to industry corporate fleets.
It was the passenger car market that produced the most impressive numbers with a gain of 26,6%, compared to the 23 732 new cars sold in January 2021.
The car rental industry supported the new passenger car market during the month and accounted for a noteworthy 15,3% of car sales in January 2022.
Domestic sales of new light commercial vehicles, bakkies and mini-buses at 9,629 units during January 2022 had recorded an increase of 349 units, or a gain of 3,8%, from the 9 280 light commercial vehicles sold during January 2021. Sales for medium and heavy truck segments of the industry reflected a mixed performance and at 465 units and 1,251 units, respectively, showed a decline of 21 units, or 4,3% in the case of medium commercial vehicles, and, in the case of heavy trucks and buses an increase of 110 vehicles, or a gain of 9,6%, compared to the corresponding month last year.
“While some purchase decisions may have been deferred out of December into the new year, January sales provide a solid start to the year, raising the hopes of manufacturers and dealers for ongoing market improvement,” says Gaoaketse.
Inflation has been fuelled, amongst others, by record-high fuel prices, rising food and energy costs as well as a depreciating Rand exchange rate.
“Consumer and business sentiment will therefore remain under pressure over the short to medium term while supply chain disruptions, such as the global shortage of semi-conductors, will also continue to hamper new vehicle sales and production during the year,” adds Naamsa.
“On the positive side, the new vehicle market trend over the next three years is expected to be upward, in close correlation with National Treasury’s projected domestic economic growth outlook, averaging 1,7% for 2022, 2023 and 2024.
“Prospects for vehicle exports for 2022, although declining during the month, remain positive in line with favourable economic and market conditions abroad as well as on the back of further new model introductions by major vehicle exporters in the country in 2022.
“Vehicle exports, the lifeblood of the domestic OEMs, are important to the viability of the South African automotive industry, as exporting remains key to generating sufficient economies of scale and to achieving improved international competitiveness.”
