New vehicle market shows astounding resilience

The new vehicle market is showing astounding resilience in the face of negative economic pressures, says National Automobile Dealer Association (NADA) chairperson, Mark Dommisse.

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“Their performance is admirable,” he added.

Dommisse said the Transnet strike, which played havoc with logistics nationally, particularly at the ports, could not stem the ongoing upswing in the sale of new vehicles in South Africa in 2022.

He said total sales increased by a healthy 11.4% to 45 966 units in October 22 compared to the figure for the same month a year ago.

The retail dealer channel accounted for 82.6% of these sales, while the rental industry, gearing up for the holiday season, took a solid 13.1% of the total monthly volume, he said.

National Automobile Dealer Association (NADA) chairperson, Mark Dommisse.

Dommisse said it is encouraging that the sales figures for all segments were higher than a year ago, with passenger cars up 10.4%, light commercials increasing by 14.3%, medium trucks reporting growth of 29.9% and heavy trucks and buses gaining 3.7%.

Exports of built-up vehicles improved by 16.1% year-on-year in October 2022.

Dommisse said the year-to-date total of 292 900 units exported indicates that the total export figure for 2022 will be well in excess of 300 000 units.

He referred to reports on impending drastic vehicle price rises but indicated that this was discounted to a degree by several representatives of major original equipment manufacturers (OEMs) at SA Auto Week at the Kyalami Conference Centre last week, who believed price increases would remain below the consumer price index (CPI).

However, Dommisse said NADA is still expecting new vehicle price hikes in the first quarter of 2023.

Dommisse said these increases could slow sales and pressure OEMs to incentivise more heavily as they fight for market share.

However, Dommisse said NADA believes used vehicle pricing will become more realistic as stock levels grow and write-backs become more commonplace.

WesBank head of marketing and communications, Lebogang Gaoaketse, said the good news was that sales have breached the 400 000-mark by some margin and that a new vehicle market of over 500 000 units for the year was definitely possible.

“In perspective, the year-to-date growth compared to last year is 50 713 units, or a good full month’s sales extra this year, which is good news for the industry and dealers alike,” he said.

Gaoaketse said new vehicle sales in October 2022 remained reassuringly robust given the logistical disruptions experienced during the month.

However, Gaoaketse added that with the hike in interest rates last month and the economic outlook provided by the mid-term budget, South African consumers were faced with a balancing act of affordability versus a growing need to replace their vehicles, a decision largely delayed over the past two years because of the COVID-19 pandemic.

“It provides a cauldron of opportunity for the motor industry to meet the needs of motorists,” he said.

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