Appetite for new vehicles high, says Motus

The appetite for new vehicles is at an all-time high, says Motus Retail and Rental SA CEO, Corné Venter.

Motus Toyota Ferndale Ext 011

However, Venter says the obstacle to higher sales at this stage is getting customers the car they want in the specification that they want.

Venter says the increased interest shown by consumers in buying new vehicles is being driven by a number of factors, including the easing of lockdown restrictions, a continued low interest rate and the high number of new models launched in the past six months.

But Venter reckons the outlook for the remainder of 2021 has deteriorated further in recent weeks with supply and demand imbalances now only expected to stabilise towards the end of 2021.

Venter attributes the decline in new vehicle sales last month to fewer trading days because of public holidays and low stock levels across all models owing to production delays caused by factors such as the global semiconductor shortage and COVID-19.

All segments of the South African new car market reported a decline in sales last month, with the passenger car segment declining by 13.9%, the light commercial segment by 24.3%, the medium commercial segment by 24.2% and heavy trucks and buses by 17.5%.

Venter says the passenger car market continues to be dominated by local manufacturers Volkswagen and Toyota, but imported brands, such as Hyundai, have managed to gain market share over the past 12 months, despite the tough trading conditions.

He says the Motus import and distribution brands have shown a steady performance with only a slight decrease in month-on-month sales in April 2021 compared to the previous month.

Venter reckons Renault SA, now a wholly owned subsidiary of Motus, sold 1 442 units in March and 1 423 units in April, while Kia sold 1 033 units compared to 1 252 units in March. Kia sales should, however, increase dramatically because of the recent launch of its compact sport utility vehicle (SUV) contender the Sonet.

He says Hyundai sales decreased slightly month-on-month in April but should bounce back following recent launches of the new Santa Fe and Hyundai i20, which has traditionally been a volume seller for the brand.

Venter adds that good quality, low-mileage pre-owned vehicles are increasingly hard to find, and prices on these units will continue to increase for as long as new vehicle supply remains constrained.

“With many manufacturers struggling to keep up with the local demand for new vehicles, this shortfall is fuelling used vehicle demand and is consequently driving up the prices of used vehicles,” he says.

Venter reckons Toyota-franchised dealers are expecting an improvement in sales in May 2021 despite ongoing stock shortages.

He adds that it has become business as usual in the past few months, with new stock snapped up by the market immediately after it arrives.

Venter says Ford dealerships share these sentiments, indicating that demand for new vehicles remains robust and, subject to supply, could return good new vehicle sales numbers for May 2021.

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