Growth in new car sales encouraging, says Naamsa

Brian Joss – Commenting on the latest new vehicle sales statistics for the month of July, 2018 – the Association said that the latest domestic sales figures had been in line with industry expectations but that export sales had again disappointed.

In the event, new vehicle sales at 47 881 units had shown an improvement of 1 210 vehicles or a gain of 2.6% compared to the 46 671 vehicles sold in July last year. July, 2018 aggregate export vehicle sales at 28 063 vehicles reflected a substantial decline of 6 657 units or a fall of 19.2% compared to the very high base of 34 720 vehicles exported in July last year.  

Overall, out of the total reported Industry sales of 47 881 vehicles, an estimated 38 675 units or 80.8% represented dealer sales, an estimated 14.0% represented sales to the vehicle rental Industry, 3.1% to industry corporate fleets and 2.1% to government.  

The July, 2018 new car market at 32 108 units had registered an improvement of 1 323 cars or a gain of 4.3% compared to the 30 785 new cars sold in July last year. On the back of continued fleeting replenishment, the car rental industry had contributed an estimated 18.8% of new car sales during the month.

Domestic sales of new light commercial vehicles, bakkies and mini buses at 13 458 units had declined during July, 2018 by 311 units or 2.3% compared to the 13 769 light commercial vehicles sold during the corresponding month last year.  

Sales in the low volume medium and heavy truck segments of the Industry reflected encouraging gains and at 701 units and 1 614 units, respectively, had recorded an increase of 96 vehicles or an improvement of 15.9%in the case of medium commercial vehicles, and, in the case of heavy trucks and buses, an improvement of 102 vehicles or a gain of 6.7% compared to the corresponding month last year.  

The improvement in domestic sales, specifically new car sales, was encouraging against the background of recent weak economic growth numbers.

The new car market continued to be supported by steady consumer confidence and improved new vehicle affordability with average price increases of new cars remaining well below inflation for the fourth consecutive quarter. The unchanged leading economic indicator of the Reserve Bank for the month of May 2018, after three months of decline, was also positive as was the sharp increase in the latest Purchasing Managers’ Index. Second half calendar year new car sales normally showed an improvement on first half sales and this suggested a modest annual improvement in 2018 domestic sales volumes compared to 2017.

The latest lower than expected vehicle export sales numbers would necessitate a downward revision in 2018 industry export projections. A further complicating factor was as a result of increased risk of global trade disputes which could impact generally on international trade flows, including vehicle exports.

Overall, domestic sales were on target to show marginal growth in 2018 but export sales would probably remain under pressure.

CAPTION: The state of the industry in July. Infographic, Wesbank. Picture: Motorpress

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