Adverse economic conditions, violence, looting and unrest in July 2021 severely affected vehicle sales. Subsequently, the gains shown for June are slightly distorted.
According to the most recent Automotive Business Council report, aggregate domestic new vehicle sales in July 2022 at 43 593 units mirrored a rise of 10 281 units, or 30,9%, from the 33,312 vehicles sold in July 2021. Export sales showed an increase of 19 990 units, or 177,7%, to 31 242 units in July 2022 compared to the 11 252 vehicles exported in July of last year.
NADA Chairperson - Mark Dommisse
“New vehicle retail sales in July remained remarkably buoyant in a tough market characterised by rising inflation, interest rates, fuel price increases and an ongoing shortage of new vehicle stock due to chip shortages and logistical challenges,” says Mark Dommisse, Chairperson of the National Automobile Dealers Association (NADA).
Overall, out of the whole reported industry sales of 43 593 vehicles, an estimated 36 420 units, or 83,6%, represented dealer sales, an estimated 10,4% represented sales to the vehicle rental industry, 5,0% to industry- corporate fleets, and 1,0% sales to the government.
The July 2022 new passenger car market at 31 455 units recorded an increase of 10,517 cars or a gain of 50,2% compared to the 20,938 new vehicles sold in July 2021. The car rental industry accounted for 13,2% of sales in July 2022.
Domestic sales of new light commercial vehicles, bakkies and minibuses at 9,547 units in July 2022 recorded a decline of 710 units or a 6,9% fall. Sales for medium and heavy truck segments of the industry reflected a positive performance during the month and at 790 and 1 801 units, respectively, showed an increase of 196 units, or 33,0% in the case of medium commercial vehicles, and 278 or 18,3% gain in the case of heavy trucks and buses, compared to the corresponding month last year.
Passenger car
"The significant increase in interest rates during the month may dampen August sales as new deals confront an affordability challenge or consumers simply delaying purchase decisions," says Lebogang Gaoaketse, Marketing and Communications Head at WesBank.
WesBank expects further interest rate hikes for the remainder of the year, thus providing an opportunity for the market to conclude deals before the expected increases become a reality.
The recovery of the Toyota manufacturing facility from flood damage in Durban and the opening of new extensions to its central parts distribution facility in Ekurhuleni will boost market performance and enhance customer support.
There was also a welcome reprieve in load shedding towards the end of the month, thus boosting business and customer confidence.
The increase of 31 242 units or 2.9% in vehicle exports hoisted exports into positive territory, year-to-year, compared to the corresponding month in 2021.
Affordability remains a core factor in the vehicle purchase journey. The increase in interest rates may moderate August sales and put potential buyers slightly off-budget. Consequently, such conditions may compel dealers to structure deals to suit household budgets.
