February, the strongest month in a long time

New vehicle sales grew year-on-year by 18.4% in February this year to the highest level since November 2019.

Screenshot 2022 03 02 105754

Automotive business council, naamsa, says total domestic new vehicle sales increased by 6 860 units to 44 229 units in February 2022 from the 37 369 vehicles sold in February 2021.

This is the best new vehicle sales month since November 2019 when sales totalled 44 738 units.

However, naamsa CEO Mikel Mabasa says the South African automotive industry is concerned about the escalating geopolitical tensions caused by the Russia’s invasion of Ukraine.

Mabasa says the invasion has occurred at a time when the global auto industry is trying to recover from the devastating impact of COVID-19, disruptions and global shortages of semiconductors and many other supply chain-related challenges experienced by the industry since the beginning of 2020.

“We don't need another global economic disruption.

“The ripple effects of Russia’s invasion of Ukraine will have negative consequences for South Africa and the rand, oil prices, food prices, financial markets, as well as potential earlier and bigger interest rate hikes by the South African Reserve Bank to curb inflation,” he says.

Of the total reported industry new vehicle sales of 44 229 units in February 2022, an estimated 84.9% or 37 553 represented dealer sales, with sales to the vehicle rental industry accounting for an estimated 10.1% of total sales, government sales 3.8% and industry corporate fleets 1.2%.

New passenger car sales increased by 22.4% in February 2022 to 29 563 units from the 24 144 new cars sold in February 2021.

The car rental industry accounted for 13.3% of car sales in February 2022.

Sales of new light commercial vehicles, bakkies and mini-buses rose by 9.4% year-on-year to 12 290 units last month, medium commercial vehicles by 7.5% to 572 units and heavy trucks and buses by 23.5% to 1 804 units.

Mabasa says the healthy performance in the new vehicle market last month reflects an improvement in domestic demand conditions, although year-on-year comparisons remain difficult to interpret because of differing pandemic circumstances during the corresponding period in 2021.

Nedbank’s group economic unit says new vehicle sales this year are 1% ahead of 2019 levels.

However, the bank says sales are 4% lower compared to average sales between February 2017 and 2019, with only heavy commercial vehicle sales in the green.

WesBank head of marketing and communications, Lebogang Gaoaketse, says consumer demand was strong last month, particularly for new vehicles as opposed to used ones, which is borne out by WesBank’s 14.2% increase in finance applications for new vehicles alone.

Gaoaketse says the new vehicle sales during the first two months of the year at 85 559 units are already 18.8% higher than the year-to-date performance of 2021, outstripping many forecasts already made for the market this year.

“This bodes well for the continued recovery of the new vehicle market,” he says.

View more here: AVAF Infographic NAAMSA February 2022

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