The availability of stock is still impeding growth in the new-vehicle market despite the improvement in sales activity, says Motus Retail and Rental CEO, Corné Venter.
Venter says many importers underestimated the recovery of the South African vehicle market, which has resulted in significant attendant stock shortages. This situation is expected to continue for a while, he reckons.
Component availability is also impacting manufacturing and has a further effect on vehicle stock levels. A current shortage of semiconductors or chips has been exacerbated by a fire at the world’s third largest producer and there have been reports of this shortage affecting vehicle factories around the world and delaying deliveries of new vehicles to dealerships.
However, Toyota South Africa Motors (TSAM) at this stage appears to be the only South African vehicle manufacturer impacted by the semiconductor shortage.
But Venter says the global shipping industry is in disarray, with congestion at several ports and supply disruptions causing havoc with the scheduling of ships arriving and leaving harbours all over the world.
Venter says this has resulted in sales of locally manufactured vehicles performing even better than usual because local production has been less affected by these global disruptions.
He expects the new vehicle sales figures in March 2021 to be boosted by a number of new model launches, which have been anticipated for some time but were delayed owing to COVID-19.This included the launch of the Toyota Urban Cruiser this month.
With a few exceptions, the pricing of the majority of vehicle manufacturers has also remained stable. Venter adds that new car sales will remain under pressure owing to stock supply but this demand is expected to roll over into pre-owned vehicle sales.
“Motus dealers are currently selling one pre-owned vehicle for every new vehicle sold. Dealers are also seeing pre-owned vehicles fetching better prices than ever before with the demand at an all-time high,” he says.
Venter adds that Motus expects growth in all vehicle segments during the month of March, with a combination of the reduction in COVID-19 infections and the easing of lockdown restrictions likely to have a positive impact on consumer sentiment and economic activity.
“The vehicle market is expected to benefit from this although it might only become evident towards the end of the month.
“With few price increases expected in the coming months and if the current demand continues and manufacturers are able to rectify the stock shortages, we are likely to see a stronger recovery in the new-vehicle market,” he says.
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