The pace of new vehicle sales has slowed as a direct result of load shedding, the interest rate hike of 75-basis points and ongoing uncertainty about which direction fuel prices will go – however, September sales were still 10,8% up on the same month last year.
Toyota boosted the numbers with a strong market showing
Total domestic sales for the month were 47 786, while export sales jumped by 104,6% to 41 474 units compared to 20 275 for September last year.
According to naamsa, of the total reported industry sales, an estimated 39 152 units, or 81,9%, represented dealer sales, an estimated 14,2% represented the vehicle rental industry, 2,3% to the government, and 1,6% to industry-corporate fleets.
Alex Boavida, the Vice Chairperson of the National Automobile Dealers’ Association, says: “Despite challenges, total new vehicle sales figures for September continued to run ahead of the corresponding month last year.
Toyota boosted the numbers with a strong showing - making immense strides in recovering from flood damages that knocked out its plant in April.
New Mazda CX-3
The September market performance is encouraging amid gloomy economic conditions. These included an ongoing stock supply shortage, load shedding, interest rate hike, and the less-than-ideal stock mix.
With factories struggling to keep new vehicle production on schedule and delivery times becoming impossible to predict, dealers are finding it difficult to keep clients interested in specific models.
The September new passenger car market at 32 392 units registered an increase of 2 855 cars, or a gain of 9,7%, compared to the 29,537 sold in September 2021.
Domestic sales of new light commercial vehicles, bakkies and minibuses at 12 573 units showed an increase of 1 632 units or a gain of 14,9%.
Sales for medium and heavy truck segments reflected a positive performance during the month at 882 units and 1 939 units, respectively.
According to Boavida household, costs are increasing due to extensive load shedding. Energy bills now must include fuel for generators in tandem with electricity. Some clients are putting off new vehicle purchases to buy solar panels and battery backup systems for their homes and businesses.
VW Polo Sedan
However, as cargo trade normalises, the market still faces a possible shrinkage and fears of a potential world recession. There are also some limitations on local vehicle transport with a shortage of carriers as exports ramp up. There is growing local interest in New Energy Vehicles (NEVs), including the increasing number of emerging fully electric models. Clients are eager to learn more about these vehicles before making purchasing decisions. And while the market anticipates a relatively slow transition from Internal Combustion Engines (ICE), more and more electric offerings are entering the market.
Applications for finance across new and used vehicle segments were positive year-on-year, with demand for new vehicle deals out-performing potential used sales.
“Consumers are looking for value in the new vehicle market,” says Lebogang Gaoaketse, Head of Marketing and Communications at WesBank. “Despite the demand being in favour of new vehicle deals, the average deal size has remained consistent year-on-year, indicating affordability remains a major consideration.”
WesBank has partnered with naamsa and the broader industry at the SA Auto Week conference, which takes place at the Kyalami Grand Prix Circuit and Conference Centre from October 24.
The presence of the International Organisation of Vehicle Manufacturers (OICA) members from 39 countries at the SA Auto Week conference will ensure strong-international participation and credibility for the South African motor industry.
