Although total new vehicle sales were up by 11,4% in October compared to last year, the pace has stagnated.
Market performance at a glance
However, a different perspective comes from Lightstone's research into South Africans and their leisure activity. Lightstone is responsible for the new vehicle sales data.
According to its latest research, South Africans are returning to their pre-Covid-19 leisure activities – but in some cases, the recovery is uneven, with four out of the six categories assessed regressing in the 12 months to June 2022.
None of the six leisure activities assessed – Entertainment, Holiday, Recreational sport, Stadium, Airports and Nightlife – have yet to reach their 2019 levels.
Although none of the six types has returned to 2019 levels (all remain below 100%), activity at airports (67% of 2019 levels) and stadia (90% of 2019 levels) have continued their recovery into 2022, while action at entertainment venues, holiday accommodation, nightlife and recreational sports facilities have all dropped in 2022 after rallying in 2021.
Vehicle sales by channel
The October 2022 new passenger car market at 30 597 units registered an increase of 2 881 cars, or a gain of 10,4%, compared to October 2021. The car rental industry supported the new passenger car market during the month and accounted for 17,4% of sales in October 2022.
Domestic sales of new light commercial vehicles, bakkies and mini buses showed an increase of 1 590 units or a gain of 14,3%. Medium and heavy truck segments reflected a positive performance during the month and at 769 units and 1 862 units, respectively, showed an increase of 177 units. Or 29,9% in the case of medium commercial vehicles, 67 in the case of heavy trucks and buses, or a gain of 3,7%, compared to the corresponding month last year.
“The new vehicle market performance during October 2022 remained reassuring despite tough economic pressures, although the pace of recovery for the year has eased to 13,1% compared to the corresponding period 2021,” says naamsa.
In addition to seasonal support from the car rental industry, a new naamsa member company started to report new-vehicle sales in the second half of the year, which has enhanced the monthly sales figures.
However, growth prospects for the rest of the year remain constrained as higher interest rates and consequent high debt servicing costs weigh on disposable income.
"The good news is sales have breached the 400 000-mark by some margin and that a new vehicle market of more than 500,000 units for the year is possible,” says Lebogang Gaoaketse, Head of Marketing and Communications at WesBank.
Vehicle sales by manufacturer
The year-to-date growth compared to last year is 50 713 units, or full-month sales extra this year, which is good news for the industry and dealers alike.
A similar perspective is not so rosy for the Light Commercial Vehicle (LCV) segment, which is down 1% year-to-date compared to 2021 to 111 751 sales.
October sales remained reassuringly robust, considering the logistical challenges experienced during the month.
With the rise in interest rates last month and the economic outlook provided by the mid-term budget, South African consumers face balancing affordability and a growing need to replace their vehicles - a decision delayed over the past two years because of the pandemic.
On the dealer side, Mark Dommisse, Chairperson of the National Automobile Dealer Association (NADA) says: “The market is showing unbelievable resilience in the face of challenging economic pressures. We at NADA are immensely proud of how our members keep astounding market commentators with their sales amid a market rocked by floods, strikes, rising interest rates, load shedding, high fuel prices, a struggling economy and stock shortages.
There has been discussion about imminent vehicle price rises. However, representatives of OEMs discounted the notion at the South African Auto Week at the Kyalami Conference Centre last week. Speaking at the event, they said price rises would stay below the consumer price index (CPI).
The forecast predicts an increase in prices in the first quarter of 2023, which could slow sales and influence OEMs to incentivise more heavily as they fight for market share. The expectation is for the used vehicle pricing to become more realistic as stock levels grow and write-backs become more commonplace.
