naamsa not upbeat about new-vehicle car sales

Overall new vehicle sales declined by 25.7% or 12 886 units in April this year compared to the previous month, with automotive business council, naamsa, warning that it expected sales to remain subdued for most of the remainder of 2023.

Screenshot 2023 05 03 093853

Total new-vehicle sales dropped to 37 107 units last month from the 49 993 units sold in March 2023.

However, the year-on-year comparisons were not as severe, with total domestic vehicle sales declining by only 0.2% in April 2023 from the 37 195 units sold in April 2022.

Of the total reported industry sales last month, dealer sales accounted for an estimated 90.3% or 33 492 units.

Sales to the vehicle rental industry accounted for 5.2% of total sales, industry corporate fleets 2.8% and government sales 1.7%.

Domestic new vehicle sales year-to-date to end-April are now, at 175 678 units, 1.3% higher in than the corresponding period in 2022.

naamsa CEO Mikel Mabasa said the new-vehicle market continued to be constrained by ongoing subdued economic conditions.

Mabasa highlighted that the International Monetary Fund (IMF) expected South Africa’s real GDP growth to decelerate sharply to 0.1% for 2023 because of load-shedding and other related supply shocks.

He said these observed economic turbulences and the record high headline inflation were likely to trigger a further South African Reserve Bank Monetary Policy Committee interest rate hike this month.

“For this reason, naamsa expects the domestic vehicle market to remain reserved for the greater part of 2023,” he said.

Wesbank head of marketing and communication, Lebo Gaoaketse, said the performance of the new vehicle industry was even more lacklustre given that there was one more selling day in April 2023 - interrupted by public holidays and long weekends - than the similarly disrupted month of April last year.

Gaoaketse added that the harsh realisation of the impact of these interruptions on the new-vehicle market was the thousands of fewer units sold in April 2023 than in the previous month.

Sales of new passenger cars declined by 6.1% to 24 174 units in April 2023 from the 25 735 units sold in the corresponding month in 2022.

Vehicle dealerships accounted for 89.1% or 21 528 units of the total 25 735 passenger car sales in the month, with the car rental industry accounting for 6.2%, individual corporate fleets 3.1% and government sales 1.7%.

Sales of new light commercial vehicles, bakkies and mini-buses increased last month by 11.0% year-on-year to 10 611 units, medium commercial vehicles by 20.3% to 563 units and heavy trucks and buses by 23.0% to 1 759 units.

Export sales of domestically produced vehicles increased last month by 13.4% to 3 639 units from the 27 117 vehicles exported in the corresponding period last year.

Wesbank head of marketing and communication, Lebo Gaoaketse, said the potential for new vehicle sales remained throttled by general economic uncertainty, rising interest rates and inflationary pressures, which were increasing the burden of household budgets.

Gaoaketse said the latent demand for vehicle replacements existed but ultimate sales were being limited by the willingness of consumers to commit.

“With a further interest rate hike expected during May in an effort to curb high inflation, the impacts that are throttling the market should be expected to continue for some time.

“Consumers should be carefully considering their vehicle requirements within their affordability to manage their budgets – and responsibly limit their indebtedness,” he said.

View full results here: AVAF Infographic naamsa April 2023

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