With sales of 1 925 during the month the Suzuki Swift topped the passenger car charts, while the Ford Ranger capitalised on the factory closure at Toyota’s Prospecton plant following the floods in KwaZulu-Natal to head up the light commercial sales charts.
According to naamsa, the Automotive Business Council, the new vehicle market’s performance was inspiring considering ever-increasing challenging market conditions.
Aggregate domestic new vehicle sales in June 2022, at 41 019 units reflected an increase of 2 888 units, or 7,6%, from the 38 131 vehicles sold in June 2021. Export sales recorded an increase of 5 044 units, or 18,0%, to 33 054 units in June 2022 compared to the 28 010 vehicles exported in June 2021.
Overall, out of the total reported industry sales of 41 019 vehicles, an estimated 34 935 units, or 85,2%, represented dealer sales, an estimated 8,6% represented sales to the vehicle rental industry, 5,0% to industry corporate fleets and 1,2% sales to government.
“Considering several upside risks to the economy and the inflation outlook, the new vehicle market delivered an upbeat performance during the month of June 2022,” said naamsa.
“However, as consumers start to feel the pinch of rising food and fuel prices along with higher interest rates on their cost of living, the spill-over effect of reduced disposable income will increasingly result in lower demand for non-essentials.
“In a further blow to the economy resulting in escalating business and consumer anxiety, stage 6 load shedding was implemented during the month, only the second time since 2019. Just emerging from COVID-19 and the impact of the devastating floods in KZN, stage 6 load shedding will cost the South African economy dearly at a time when it is already facing a myriad of headwinds battling to recover.”
Domestic sales of new light commercial vehicles, bakkies and mini-buses at 8 877 units during June 2022 recorded a decline of 2 329 units, or a fall of 20,8%, from the 11 206 light commercial vehicles sold during June 2021.
Sales for medium and heavy truck segments of the industry reflected a good performance during the month and at 697 units and 1 900 units, respectively, showed an increase of 9 units, or 1,3% in the case of medium commercial vehicles, and, in the case of heavy trucks and buses an increase of 160 vehicles, or a gain of 9,2%, compared to the corresponding month last year.
“Considering several upside risks to the economy and the inflation outlook, the new vehicle market delivered an upbeat performance during the month of June 2022. However, as consumers start to feel the pinch of rising food and fuel prices along with higher interest rates on their cost of living, the spill-over effect of reduced disposable income will increasingly result in lower demand for non-essentials,” says naamsa.
“In a further blow to the economy resulting in escalating business and consumer anxiety, stage 6 load shedding was implemented during the month, only the second time since 2019. Just emerging from COVID-19 and the impact of the devastating floods in KZN, stage 6 load shedding will cost the South African economy dearly at a time when it is already facing a myriad of headwinds battling to recover.
“The new vehicle market remains volatile for many reasons, most of these beyond the control of manufacturers,” says Lebogang Gaoaketse, Head of Marketing and Communications at WesBank.
“There are well-known pandemic-related consequences that continue to impact market performance. Additionally, broader challenges facing the country over the past few months have compounded the recovery of new vehicle sales.
“While we should celebrate this recovery of new vehicle sales, this performance must be considered within the context of more stringent COVID-19 regulations during the first half of last year,” says Gaoaketse. “Based on similar performance during the second half of the year, it is possible to see a South African new vehicle market exceed 500 000 units this year.”
“The South African new vehicle market continued to astound industry commentators and perform against the odds,” commented Mark Dommisse, Chairperson of the National Automobile Dealers’ Association (NADA) after analysing naamsa’s June sales report.
“What is remarkable is that this improvement was achieved with Toyota, the long-time market leader, only being able to retail about half its usual volume as its passenger and light commercial vehicle manufacturing plant is still not operating after flood damage experienced in the middle of April.”
Dommisse went on to say that there were some positives, which include the lifting of the compulsory wearing of masks and the easing of restrictions on incoming tourists, which will buoy consumer confidence and the rental market respectively.
“Ongoing load shedding has, however, put a major dampener on things, particularly in terms of small and medium businesses, while the ongoing increases in fuel and electricity prices and the announcement of a possible interest rate hike in July, are putting strain on consumer budgets, be they companies or private individuals. The effect of inflation and higher interest rates will in all likelihood have an impact on vehicle sales over the next two months.
"The buying down trend is continuing apace, which is evidenced by the strong performance of Suzuki in the market, bearing in mind that its model line-up falls into the small vehicle category. The categories for smaller cars, SUVs and crossovers are gaining new entrants virtually every month, which means buyers are generally able to strike favourable deals in such a competitive market. Overall, our dealers should be proud of their performance in June.”
