New vehicle dealer confidence declined by a massive 16 points on a 100-point scale to 47 index points in the third quarter of 2021, according to the RMB/Bureau for Economic Research (BER) business confidence index.
This means that 53% of all new vehicle dealers are dissatisfied with prevailing business conditions.
RMB/BER attributed the significant deterioration in new vehicle dealer confidence to the fact that many of the dealers polled were disappointed with overall vehicle sales.
It says this was not so much because the demand for new vehicle faltered but rather because of the unavailability of certain models and delays in the supply of new stock.
The third-quarter survey was conducted between August 11 and 30 and covered about 1300 businesspeople spread across the building, manufacturing, retail, wholesale and motor trade sectors.
At an industry level, sentiment deteriorated across all the sectors making up the business confidence index, except for retail trade.
However, new vehicle dealer confidence is the only sector that makes up the business confidence index that is in net negative terrain, which is where the number of respondents dissatisfied with prevailing business conditions outnumber those who are satisfied.
Retail confidence increased marginally by 2 index points to 56 in the third quarter, its highest level since 2014 to also exceed its long-term average of 39, while wholesale confidence dropped eight index points to 55.
The deterioration in new vehicle dealer confidence has occurred despite sales for the first eight months of this year up to end-August being 32.4% higher than in the corresponding period in 2020.
Some major JSE-listed companies with vehicle dealership businesses in their portfolios have reported strong performances.
Super Group reported last month that its dealerships in South Africa increased revenue by 19.4% to R8.2 billion in the year to end-June and an improvement in new vehicle profit margins.
This was attributed largely to a sharp increase in the average selling price of vehicles and an improvement of 15.7% in used vehicle sales volumes compared to a decline of 13.9% in the previous year.
Super Group says new vehicle sales by the group’s South African dealership operations increased by 7.0% in the year to June compared to the 20.5% decline in the prior year.
Motus also reported a strong performance by its dealerships, with its overall vehicle unit sales increasing by 10% to 228 633 vehicles in the year to June 2021 from 208 778 vehicles in the previous year.
New vehicle unit sales by Motus grew by 6% and pre-owned vehicles by 13%.
Motus CEO Osman Arbee says new vehicle stock shortages caused by the global semiconductor shortage have resulted in it becoming difficult to supply customers with the specific colour or specifications of their model of choice.
The World Cup Rugby Champions, the Springboks, have a new vehicle partner after a three-year deal between the Boks and Toyota South Africa Motors (TSAM) was announced.
Mercedes-Benz South Africa (MBSA) says it has moved one step closer to carbon neutrality with a new photovoltaic (PV) technology pilot project at its plant.
Significant progress has been made over the last 12 months since the Guidelines for Competition in the South African Automotive Aftermarket were implemented to make the automotive aftermarket a fairer place to do business, says Right to Repair SA (R2RSA).