Car sales decline cushioned by seasonal buying

Standard Bank's Nicholas Nkosi says that sales to car rental companies climbed sharply while those among private buyers indicated the buyers were still under pressure. Image: Insurance Chat

Standard Bank Vehicle and Asset Finance Head Nicholas Nkosi said sales in July were better than expected because‚ after contributions of 5.6% in May and 8.3% in June‚ rental companies' share of new-car sales in July climbed to 14.2%‚ or just under 5‚700 of the 39‚945 cars sold.

WesBank Research Head Rudolf Mahoney said rental sales were 21% higher than July last year.

Despite private buyer sales declining 5.9% over the same period‚ the aggregate car market dropped just 1% and the total new-vehicle market‚ including bakkies‚ trucks and buses‚ by 1.5%.

Mahoney said that this was a welcome relief after previous months in which the year-on-year fall was as much as 10.2%. But he said the weaker dealer sales performance showed that consumers remained under pressure‚ intensified by more fuel price rises and another hike in interest rates.

Swing to buying used cars

Despite this‚ Nkosi reported that vehicle credit applications remained strong‚ with many customers buying used cars because they could not afford to buy new ones. Mahoney said WesBank received a record 129‚000 finance applications in July.

Wesbank's Rudolf Mahoney says sales to rental companies were 21% higher last month than they were in July last year. Image: MI

In all‚ reported the National Association of Automobile Manufacturers of South Africa (Naamsa)‚ the South African motor industry recorded 57‚670 domestic new-vehicle sales last month: 39‚945 cars‚ 15‚081 light commercial vehicles‚ 856 medium commercials‚ 421 heavy trucks‚ 1‚265 extra-heavy trucks and 102 buses. That was up on June's 52‚795‚ but down on the previous last July's 58‚561.

For Ford‚ at least‚ it was a bumper month. Sales topped 6‚000 for the first time. Though Toyota and Volkswagen remained firmly in the top spots‚ Ford sales so far this year are 21% higher than last year.

The top-10 models sold in July were: VW Polo 3‚330‚ Toyota Hilux 3‚117‚ VW Polo Vivo 2‚887‚ Ford Ranger 2‚564‚ Toyota Corolla 2‚134‚ Toyota Etios 1618‚ Nissan NP 200 1 442‚ Isuzu KB 1 379‚ Mercedes-Benz C-Class 1‚377 and Ford Figo 1‚188.

Strikes hurt exports

Naamsa Director Nico Vermeulen said the recent National Union of Metalworkers of South Africa (Numsa) strike‚ which caused most motor companies to halt vehicle production‚ had had a negligible effect on July sales because dealers had stock in hand. But customers could feel the effects in August and September if companies were unable to quickly make up lost production.

Naamsa's Nico Vermeulen is hoping that exports will improve for the balance of this year and next year provided no more industrial action brings motor manufacturers to a halt. Image: GM Archive

Exports were directly affected. Early in July‚ Naamsa predicted an imminent return to previous export levels after a disappointing first six months but July shipments of 27‚137 were down 16.1% compared with last year's July figure. During the first seven months of this year‚ exports fell 20.5%.

Vermeulen remained optimistic‚ saying: "Barring further industrial relations instability and assuming the resumption of normal production levels‚ the expected improvement in global economic conditions should benefit South African vehicle exports during the rest of this year and next."