A long road to normality for the motor industry

New-vehicle sales will remain under pressure for the next two years.

A long road to normality for the motor industry

New-vehicle sales will remain under pressure for the next two years, says Mark Dommisse, Chairperson of the National Automobile Dealers Association (NADA) in reaction to the recent new-vehicle sales figures published by the National Association of Automobile Manufacturers of SA (Naamsa) at the start of August.

“July was a very difficult trading month and we don’t see a quick recovery from this new reality any time soon. In fact, we’re looking at a minimum of one to two years before we see any significant improvement in new vehicle sales,” says Mark.

He adds that July was an unseasonably long trading month, which makes the drop of approximately 30% very worrying.

“Consumers are still under massive pressure to meet their monthly household expenses and cautious when making big-ticket vehicle purchases and committing to large financial payments. While there is some reprieve from recent interest-rate cuts, rising fuel prices and general inflation will continue to pinch wallets into the foreseeable future.

But, he notes, there is a positive side with many consumers resuming deferred instalments in July. And considering the pressure, there is still an appetite for new cars.

In July, passenger car sales were slightly down on the previous month (-125 units) with Light Commercial Vehicle (LCV) sales showing growth of 1 392 units compared to June 2020. Out of the total reported industry sales of 32 396 vehicles in July, an estimated 30 325 units or 93.6% represented dealer sales – clearly demonstrating how important the contribution of South Africa’s dealer network is to the economy.

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