New vehicle sales boomed in February this year, despite it being the shortest month of the year, says the National Automobile Dealers’ Association (NADA).
Total new vehicle sales soared by 18.4% in February 2022 to 44 229 units from the 37 369 units retailed in the same month a year ago.
NADA chairperson, Mark Dommisse, says it is encouraging that new vehicle sales increased during the first two months of the year compared to the same period in 2021, despite supply issues still affecting most new vehicle dealer franchises.
Dommisse stressed the importance of the dealer channel accounting for 84.9% of these sales.
“This points to growing consumer confidence, despite the conflict in Ukraine, the ongoing global COVID-19 pandemic, and a continuing global shortage of semiconductors, which affects the number of new vehicles being produced,” he says.
Dommisse attributed the high growth in the market last month to the volume of passenger cars sold through dealerships, which improved by 27.9% compared to February 2021.
He says the vehicle rental industry also made a substantial 13.3% contribution to the overall passenger car total and contributed 10.1% of the total new vehicle market in the month.
Dommisse adds that business confidence also appears to be improving.
He says the strong commercial vehicle sales at dealer level was evidence of this.
Sales of light commercial vehicles increased by 7.4% compared to the corresponding period last year, medium commercial vehicles by 29.3%, heavy trucks by 49.4% and extra heavy trucks sales by 17.2%.
However, Dommisse highlighted that commercial vehicle sales were generally strong in the month of February because it is the financial year end for most businesses, and farming communities also purchased their vehicles in February.
Dommisse says an interesting statistic to come out of the sales data was the impressive 535% year-on-year growth in the combined sales of electric, plug-in hybrid and traditional hybrid vehicles to 216 units in the first two months of this year compared to only 34 in the corresponding period in 2021.
“This can be partly be attributed to the strong take-up of the new Toyota Corolla Cross, which was South Africa’s best-selling car in February and where there is encouragingly high demand for the hybrid variant of this model.
“Of course, the introduction of many new electric models from premium brands such as Audi, BMW and Mercedes will only add to this tally going forward,” he says.
Dommisse says the good news in this year’s Budget of no major tax increases or levies was quickly offset by the massive fuel price increases announced.
“This rising fuel price, linked to a crude oil price that is now well above $100 a barrel, will undoubtedly see the importance of a vehicle’s fuel efficiencies taking centre stage when buying decisions are made,” he says.
In reference to Russia’s invasion of Ukraine, Dommisse says the conflict unravelling in Europe is very worrying and, together with the fuel price shock this month, was likely to affect new vehicle sales going forward.
“But we see a sweet spot in the passenger car sector, namely the competitive sub-compact segment, where the wide range of models available use small capacity engines that are light on fuel.
“This segment should continue to see even stronger growth in the future,” he says.
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