NADA vice-chairperson, Alex Boavida, says it is amazing the way new vehicle sales in South Africa continue to grow substantially at a time when the world is in chaos and prices of commodities and other products are rocketing.

Boavida was commenting on the release of the new vehicle sales for March 2022.

Total domestic new vehicle sales increased by 16.5% to 50 607 units in March 2022 from the 43 423 units sold in March 2021 to achieve the highest monthly sales total since the pre-pandemic October 2019 sales total.

Sales of new passenger cars increased by 27% to 33 790 units in March 2022 from the 26 599 new cars sold in March 2021,

Boavida says March was a long selling month and the end of the fiscal year for many companies and organisations, but few industry commentators could have expected an aggregate figure of 50 607 units.

She says the retail dealer channel accounted for 85.8% of sales, which is encouraging because many dealers are still short on stock of both new and used vehicles.

“The passenger car segment was a staggering 27% higher than in the same month a year ago, while the medium and heavy truck segments show marked increases too, which signal improved business confidence,” she says.

Boavida added that the hike in interest rates was anticipated but was a small increase and would therefore have had a negligible effect on sales while there was good news for consumers in the form of the R1.50 per litre temporary decrease in the anticipated fuel price increase owing to a government tax cut.

She says the industry is pleased there weren’t any major implications for the retail motor industry in the Budget in terms of personal tax or company vehicle perks tax increases to change potential buyers’ vehicle purchasing decisions.

“There was more good news at the government’s fourth investment conference, where automotive companies – both OEMs and component manufacturers – were again prominent in making significant pledges on upcoming investments in their South African operations.

“This is good for morale building in the motor industry while providing peace of mind to consumers in terms of the ongoing commitment by local motor manufacturers,” she says.

WesBank Head of Marketing and Communication, Lebogang Gaoaketse, says there is reason for more bullishness about the South African new vehicle market after new vehicle sales broke through a threshold last experienced in October 2019 and achieved more than 50 000 unit sales in the month.

Gaoaketse says the new vehicle market had shown some return to stability in volumes around the mid-40 000 range but the performance of the market in March 2022 “has provided an injection of much-needed buoyancy”.

“In the face of interest rate hikes, spiking fuel prices, and the ongoing industry challenges of supply, March’s new vehicle market provided a lot to celebrate. Despite all these challenges, March showed a positive sign of sustained growth,” he says.

However, Gaoaketse says forecasts for the year may need to be adjusted downwards given the current global conflicts.

Gaoaketse warned that the market still has challenges to face and should not be expected to continue displaying these levels of growth.

“The market will be hoping to arrive at levels of sustainable stability rather than peaks and troughs of volume performance. However, the indications are improving to make this possible,” he says.