Positive signs, but challenges remain - NADA

The National Automobile Dealers’ Association (Nada) is encouraged by the new vehicle sales data for the first quarter of 2021, despite sales declining by 17.6% month-on-month in April.

Mark Dommisse NADA National Chairperson

NADA chairperson, Mark Dommisse, said it is difficult to track where the industry is on a quarter-on-quarter basis but stressed the new-car market is in a relatively healthy state with an average of 36 000 units sold over the first four months of 2021.

Mikel Mabasa, the CEO of automotive council Naamsa, highlighted that new vehicle sales for the first four months of 2021 are now 28.3% higher than in the corresponding period last year.

However, Mabasa said although the new-vehicle market in 2021 was expected to rebound substantially compared to 2020, it is important to note that aggregate new vehicle sales in 2020 dropped back to the level of 18 years ago and a recovery to pre-COVID-19 sales levels will take at least three years.

Dommisse also warned that the industry must be mindful of potential setbacks in future months.

“In contrast to 2020, we have customers but a shortage of many models owing an increasing number of global logistical challenges, which are impacting negatively on the current and future new-vehicle stock availability in South Africa.

“We’re experiencing a global scarcity of microchips, as well as steel, resin and rubber,” he said.

Dommisse added that the industry is now faced with an additional complication because of severe COVID-19 lockdowns in India, which is limiting production.

He said India is a large source of built-up vehicle imports, particularly in the entry-level segment of the market.

“The large-scale vaccination programme in South Africa cannot start fast enough to bring more normality to the country. Kudos to the government for accelerating the supply of vaccines,” he said.

Total new vehicle sales in April 2021 dropped to 35 779 vehicles from the 43 428 vehicles sold in March 2021.

Dommisse said the new-vehicle sales data, despite the month-on-month decline in overall sales in April, still showed encouraging signs of a recovery considering the short trading month with only 19 selling days.

“The sales results were better than expected, despite April being the shortest trading month bookended with public holidays and long weekends. There was the added complication of staggered school holidays affecting business too,” he said.

Sales figures released on Monday revealed that a total of 35 779 new vehicles were sold in April 2021 compared to only 574 vehicles sales in April 2020 when vehicle production and retail sales came to a standstill because of the hard COVID lockdown restrictions.

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