In a traditionally tough sales month where corporate and fleet buying is on hold until after the financial year-end, Toyota racked up 11 560 new vehicle sales for a market share of 25,4%. Meanwhile, Chery made it into the top 10 on the passenger car list for the first time.
February is generally a slow sales month for many corporate companies, with reduced trading days and financial year-end. However, the market showed strength amid the gloom. So, the industry monitors February sales as a barometer for vehicle sales momentum at the beginning of the year.
Sales by market share
According to the Automotive Business Council, monetary policy amendment and the Budget Speech influenced the automotive industry's performance.
Moreover, the South African Reserve Bank's decision to increase interest rates for the eighth consecutive time is a reminder that South Africa, like the rest of the world, is reeling from the increased cost-of-living predicament caused by global geo-political squabbles, lingering effects of the COVID-19 pandemic and a global inflationary environment.
Additionally, consumer spending and household discretionary income continue to contract with increases in fuel, electricity and other miscellaneous basic costs that directly impact vehicle sales.
Dealer sales by market share
Furthermore, the National Treasury's delayed support for the manufacturing of NEVs and NEV components in the country has also impeded the spirit within the sector.
However, total domestic new vehicle sales increased by 1 128 units, or 2,6%, to 45 352 units, compared to last year. But, year-on-year vehicle exports declined by 11,5%, from 34 352 units in February 2022 to 30 409 units in February 2023.
Naamsa estimates 83,6% of the total sales were dealer sales. Another estimated 9,0%, 5,1%, and 2,3%, respectively, were sales to the vehicle rental industry, government, and corporate fleet.
Domestic sales of new light commercial vehicles, including bakkies and minibuses, increased by 683 units, or 5,5%. Concurrently, sales for the medium-heavy truck segment had a negative year-on-year comparative growth from 517 units in February 2022 to 435 in February 2023. The extra heavy truck segments of the industry showed a favourable performance year-on-year, from 1 186, in 2022 to 1 244 in 2023.
Top performer. Toyota Hilux DC Legend
“New vehicle sales growth should be in smaller increments during 2023 for no other reason than a relatively more stable sales year experienced during 2022,” says Lebogang Gaoaketse, Head of Marketing and Communications at WesBank. “This shouldn’t necessarily be construed as a poorer performance from the market, but rather more realistic growth that can be expected as the market continues its recovery.
“Not that this is a negative,” he says. “It remains positive for the market to have recovered volumes to this level, especially given the external constraints over the past few years. Demand remains good as measured by WesBank’s rate of applications, providing a solid foundation of which the market can continue its recovery.”
“However, there are positive contributors that continue to drive the market’s recovery and growth in real terms. Not least of these is a massively improved supply chain that will organically meet levels of demand better with consequent increases in volumes.
Toyota Starlet
“The country’s energy crisis will invariably impact new vehicle sales off the back of declining consumer and business sentiment,” concludes Gaoaketse. “However, the market’s resilience shown over the past three years proves how robust the industry remains; and that there continues to be an opportunity for growth.”
It is almost impossible to forecast the performance of new vehicle sales in 2023, with various factors influencing the spending patterns of consumers and businesses. With the energy crisis and ongoing load-shedding likely to impact consumer confidence, NADA remains optimistic about growth potential.
