Growth ahead, but with some restrictions

The pace of recovery in the new vehicle sales industry outperformed expectations in the first quarter of 2022, according to automotive business council, naamsa.

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Aggregate new vehicle sales recorded an impressive increase of 18% in the first quarter of 2022 compared to the corresponding quarter in 2021, naamsa says in its quarterly review of business conditions for the first quarter of 2022.

And naamsa adds that new energy vehicle (NEV) sales by 12 industry brands increased to 1 401 units to exceed the total annual NEV sales in 2021 of 896 units by a massive 56.4%.

Traditional hybrid vehicle sales at 1 257 units accounted for the bulk of these sales in the first quarter of 2022 and were double the 627 units sold in the 2021 calendar year.

By comparison, plug-in hybrid vehicles totalled 32 units in the first quarter of 2022 compared to 51 sales in the 2021 calendar year, while 112 electric vehicles were sold in the first quarter of 2022 compared to the 218 units sold in the 2021 calendar year.

naamsa CEO, Mikel Mabasa, says the various vehicle segments reflected an all-round positive performance in the first quarter of 2022 compared to the corresponding quarter in 2021. He says the performance of the volume passenger car segment was particularly impressive.

“The positive performance of the passenger car segment can be attributed to domestic pent-up demand, a sound increase in seasonal contribution by the rental companies and improved business conditions aligned with the normalising economic environment,” he says.

Aggregate industry new passenger car sales increased by 25.7% in the first quarter of 2022 to 93 644 units from the 74 475 new passenger cars sold during the corresponding quarter of 2021.

Aggregate industry commercial vehicle sales rose by a much more modest 3.9% to 42 548 units in the first quarter of 2022 from the 40 956 units sold during the first quarter of 2021.

Despite the improved new vehicle sales performance in the first quarter of 2022, Mabasa says the industry is expected to encounter a stop-start recovery over the balance of the year in view of prevailing COVID-19-related supply chain disruptions in China, insufficient stock and escalating energy and transport cost increases.

Mabasa says the repercussions of the geo-political conflict with Russia’s invasion of the Ukraine have already extended to rising food, energy and commodity prices, adversely impacting households, and consumers should brace themselves for ongoing cost of living increases.

“The added shock of the flooding disaster in KwaZulu-Natal to domestic business conditions will be felt for some time to come. However, the new vehicle market trend is anticipated to remain upward over the medium term, albeit at a slower pace,” he says.

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