A good month for franchised dealers

Franchised dealers made a flying start to a year that promises to build on the upward trend experienced in 2021, says Mark Dommisse, chairperson of the National Automobile Dealers’ Association (NADA).

Mark Dommisse National Chairperson NADA

Dommisse says franchised dealers were responsible for 84.2% of the total 41 283 new vehicles sold in January 2022.

“The South African motor industry remains buoyant despite the disappointing state of the local economy,” he says.

Total new vehicle sales increased by 19.5% in January 2022 compared to the sales registered in the corresponding month in 2021.

“What is amazing is that these heartening figures were delivered despite shortages of some models owing to ongoing component shortages, particularly semiconductors, which will likely be with us for most of this year.

“This shortage of product also means that few manufacturers or distributors are offering incentives to buyers, making January’s performance even more impressive,” he says.

Dommisse added that rising interest rates and fuel prices will obviously have some impact on the market in 2022 but generally the outlook is brighter than at the same stage last year when lockdown regulations were more stringent.

NADA Vice Chairperson, Alex Boavida, says the association is particularly glad to see the substantial month-on-month growth of 26.5% in January passenger car sales.

“This signals improving consumer and business confidence, which are critical for growth in our industry.

“Commercial vehicle sales were lagging in January, but we believe the situation will improve in the coming months,” she says.

Sales of new light commercial vehicles, bakkies and mini-buses rose by 3.8% year-on-year to 9 629 units in January 2022 but medium commercial vehicle sales declined by 4.3% to 465 units, while heavy truck and bus sales improved by 9.6% to 1 251 units.

Boavida says January was interesting in that there was better new car stock availability than in recent months but with lower stocking levels of good used cars.

However, Boavida says the month should not be seen in isolation and there is a need to monitor sales of new cars versus used cars in the months ahead to see the actual trend.

Boavida adds that the global supply of semiconductors or microchips remains a challenge for all brands but there were some signals in January 2022 that the situation is improving.

She says some sectors in the luxury segment of the car market showed improvements in the month.

Mercedes-Benz, for example, doubled its monthly sales compared to the averages seen in third and fourth quarters of 2021, while Porsche reported 204 unit sales last month, a 114% increase on its sales in December 2021, according to her.

“Sales of other luxury brands seem to be stabilising but no massive recovery in this portion of the market is expected in the short term,” she reckons.

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