Comparative sales growth slowing

The pace of recovery of the new vehicle market has started to slow down, according to naamsa.

Screenshot 2022 10 05 121728

Mikel Mabasa, the CEO of the automotive business council, naamsa, says the new vehicle market’s resilient performance continued during the month of September but at a slower pace.

Mabasa attributed the slower pace of recovery to the sixth consecutive increase in interest rates since November 2021, and September 2022 being by far the worst month of the year in terms of the cumulative amount of load shedding.

However, Mabasa says despite the despondency about load shedding and other weakening economic indicators, the new vehicle market in September 2022 reflected a healthy performance.

Mabasa says the higher stages of load shedding seem to have an amplified negative impact on production and the South African economy as a whole.

He adds that the South African Reserve Bank noted at its September Monetary Policy Committee meeting that economic and financial conditions were expected to remain more volatile for the foreseeable future and revised its economic growth outlook for 2022 downwards as a result of load shedding and other weakening economic indicators.

“However, in all this despondency there is some good news for motorists as the oil price has dropped to its lowest level since January 2022 with the petrol price to reduce further in October 2022, easing some cost pressures in a depressed economy,” he says.

Mabasa says the new vehicle market’s performance year-to-date is still 13.4% ahead of the corresponding period in 2021 but the pace of growth being experienced in the market is expected to slow down for the rest of the year.

Aggregate domestic new vehicle sales increased by 10.8% in September 2022 to 47 786 units from the 43 147 vehicles sold in the corresponding month in 2021.

Sales of new passenger cars increased by 9.7% to 32 392 units in the month from the 29 537 units sold a year earlier.

Mabasa says the car rental industry supported the new passenger car market last month and accounted for a sound 18.9% of sales in the month.

Sales of new light commercial vehicles, bakkies and mini-buses rose by 14.9% year-on-year in September 2022 to 12 573 units while sales of medium commercial vehicles rose by 15.3% to 882 units and heavy truck and bus sales by 1.8% to 1 939 units in the same period.

Export sales of locally produced vehicles increased by 104.6% or 21 199 units in September 2022 to 41 474 units from the 20 275 vehicles exported in the same month in 2021.

Mabasa says the strong performance in vehicle exports during the month could still be attributed to the knock-on effects of the cyberattack on Transnet’s operations during September 2021.

However, Mabasa says the global economy has entered a period of persistently high inflation and weaker economic growth, impacting on demand.

But Mabasa says the growth prospects for domestic vehicle exports remain optimistic on the back of new locally manufactured model introductions during the last quarter of the year.

View the full report here: AVAF Infographic naamsa September 2022

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