Outlook for new vehicle sales poor, says Naamsa

The National Association of Automobile Manufacturers SA (Naamsa) said that new car sales last month (January) dropped 6.1per cent to 34 936 units compared to 37 208 sold in January last year.

001-off-my-wheelsBrian Joss – Export sales of new motor vehicles had also registered a major year on year decline largely due to logistics and shipment issues. In the event, January 2016 aggregate new vehicle sales at 48 615 units had registered a decline of 3 613 vehicles or a fall of 6.9% compared to the 52 228 vehicles sold in January last year. The January 2016 export sales at 13 057 units reflected an unexpectedly large decline of 3 652 vehicles or a fall of 21.9% compared to the 16 709 vehicles exported in January last year. Overall, out of the total reported Industry sales of 48 615 vehicles, an estimated 36 456 units or 75.0% represented dealer sales, 18.4% represented sales to the vehicle rental Industry, 4.4% to Industry corporate fleets and 2.2% to government. The new car market had continued to experience pressure during January 2016 and at 34 936 units reflected a decline of 2 272 cars or a fall of 6.1% compared to the 37 208 new cars sold in January last year.

The car rental Industry had again made a strong contribution and had accounted for 24.6% of new car sales in January, 2016. Domestic sales of industry new light commercial vehicles, bakkies and mini buses at 12 074 units during January, 2016 reflected a decline of 1 090 units or a fall of 8.3% compared to the 13 164 light commercial vehicles sold during the corresponding month last year. Model run outs and model run ins had played a role in the January sales numbers. Sales of vehicles in the medium and heavy truck segments of the Industry at 531 units and 1 074 units had also registered weakness and, in the case of medium commercial vehicles, reflected a decline of 98 units or 15.6% and, in the case of heavy trucks and buses, a decline of 153 vehicles or a fall of 12.5% compared to the corresponding month last year. Industry new vehicle exports during January, 2016 had registered a substantial decline compared to the corresponding month last year. Logistics and shipment capacity constraints had contributed to the lower January export numbers.

A substantial increase in new vehicle exports was expected to materialise from March, 2016 onwards and, at this stage, industry projections for exports during 2016 showed an improvement of around 40 000 vehicles or about 12% to an anticipated 375 000 export units. Domestically, a number of key indicators including the Purchasing Managers’ Index (PMI) and the Reserve Banks’ leading indicator suggested that the South African economy would experience a difficult year. In light of poor economic growth prospects with GDP growth estimated at 0.5% at best and given the likelihood of well above inflation new vehicle price increases as well as prospects of further interest rate hikes – the outlook for 2016 in terms of domestic new vehicle sales had deteriorated and had been reviewed downwards. At this stage the consumer demand sensitive new car market was anticipated to decline by around 9% in volume terms to about 375 000 units in 2016 down from the 412 826 new cars sold in 2015. New commercial vehicle sales were expected to perform slightly better with declines of between 3% and 5% expected in volume terms.

Ford records its best January yet

Ford Motor Company of Southern Africa (FMCSA) has carried the strong sales momentum it achieved throughout last year into 2016, recording its best-ever January with a total of 6 524 vehicles sold and its best-ever market share for the month of 14.7%.

Ford’s Fiesta Ambiente. Picture: Quickpic
Ford’s Fiesta Ambiente. Picture: Quickpic

The January volume represents a 15% increase compared to the corresponding month last year, and 2.8% up on the December 2015 results – once again a positive growth trend for Ford in the face of weak overall market trends.

“The motor industry has been under significant pressure over the last year, but we are delighted that Ford has been able to achieve significant and consistent gains, which has continued into 2016,” says Neale Hill, Ford Motor Company of Southern Africa Director of Marketing Sales and Service.

“Along with the new sales records for January, it’s also important to note that Ford was the second best brand through the retail channel. This means individual customers are spending their own money on our vehicles, and we aren’t relying heavily on rental, fleet and government sales.

“This ensures that our dealers remain profitable, and is the greatest testament to the exceptional quality, performance, efficiency and outright value offered by our current product range,” Hill adds.

*According to the figures released by the National Association of Automobile Manufacturers of South Africa (NAAMSA), aggregate new vehicle sales at 48 615 units registered a decline of 6.9% compared to January 2015. At 34 936 units, the new car market fell by 6.1% year-on-year, while domestic sales of light commercial vehicles dropped by 8.3%.

Ford’s main highlights in January, were spearheaded by the Ford Fiesta which notched up 1 206 sales – its best result since August 2015.

The Figo proved extremely popular too, recording 826 units for the month while the EcoSport remained the undisputed leader of the compact SUV category with 917 units sold.

The Ford Ranger was the second-best selling vehicle in the LCV sector and the third-best overall, with a final tally of 2 348 units for January.

GM gets a Spark

The overall industry was down 6.9 percent versus the same period last year, despite surprisingly high rental sales, of which accounted for one in four passenger vehicles sold. General Motors South Africa (GMSA) posted total sales of 3 437 units in January.

A key highlight for GMSA last month was the locally produced Chevrolet Spark which sold 1 018 units.

“The January sales results are a clear indication that consumers are under pressure due to the increase in interest rates general inflationary pressure and high levels of household debt. We expect the NAAMSA new vehicle industry to show a continued decline in volume throughout 2016. This is evidenced in the dealer channel volumes. January saw a drop of 16% in passenger sales and 12% drop in Light Commercial sales, representing the lowest dealer volume since April 2011. We had expected a weaker January in the dealer channel, but this was even lower than our conservative expectations,” says Brian Olson, GMSA Vice President Vehicle Sales, Service and Marketing.

“As the year progresses we expect to see a stronger used vehicle market as the pressure mounts on South African consumers. In January we saw a drop in new vehicle applications of 19% versus December whereas used vehicle applications were up 4%,” said Olson.

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