Sales reflect disruptions in market

New vehicle sales in May 2022 reflected the knock-on effects of the disruptions caused by the severe floods in KwaZulu-Natal and a myriad of headwinds increasingly impacting domestic economic growth, including the disposable income of consumers, says automotive business council, naamsa.

Screenshot 2022 06 02 100711

Total new vehicle sales in the month increased by a modest 2.1% year-on-year to 39 177 units from the 38 358 units sold in May last year.

Of the total reported industry sales, an estimated 88.8% or 34 775 units represented dealer sales, 7.9% sales to the vehicle rental industry, 2.1% to industry corporate fleets and 1.2% to government.

The impact on new vehicle sales of the temporary closure of Toyota South Africa Motors’ (TSAM) manufacturing plant in Prospecton in Durban because of severe damage caused by the floods was most evident in the sales performance of the light commercial vehicle segment.

TSAM’s plant has been temporarily closed for almost two months. The facility produces Corolla Cross and Quest and segment leaders Hilux, Hiace Ses’fikile and Fortuner, apart from assembling a variety of Hino commercial vehicles, with Hino assembly resuming on 23 May 2022.

This contributed to the 22.6% decline in domestic sales of new light commercial vehicles, bakkies and mini-buses to 9 221 units last month from the 11 912 units sold in May 2021.

TSAM admitted that most of its best sellers were hampered by stock shortages in May, and the company’s marketing machinery had to redirect resources to enhance its support for completely built-up or imported units.

Sales of new passenger cars increased by 13.8% to 27 437 units from the 24 119 new cars sold in May 2021, with sales to the car rental industry accounting for 10.0% of new passenger car sales in the month.

Sales for medium commercial vehicles increased by 11.8% year-on-year to 614 units while heavy truck and bus sales rose by 7.1% to 1 905 units.

Wesbank Head of Marketing and Communications, Lebogang Gaoaketse, said dealer performance in both the passenger car and light commercial vehicle segments outperformed the market, with growth of 18.9% and -21.1% respectively.

“It continues to be reassuring for the market that demand remains in the consumer space,” he said.

Nedbank’s Group Economic Unit said the sales to the car rental industry suggested a robust recovery in tourism and business activity.

It said the vehicle sales statistics in May came as no surprise as multiple days of severe load shedding and supply chain disruptions locally continued to weigh on productive capacity and therefore sales.

naamsa reported that export sales recorded a huge fall of 29.9% to 25 786 units last month from the 36 799 vehicles exported in May 2021.

Nedbank attributed this sharp decline to the floods in KwaZulu-Natal disrupting logistics and operations at TSAM, with the general slowdown in global growth conditions caused by rising inflation and tight monetary policy also contributing to the decline in volumes.

Full results: AVAF Infographic NAAMSA May 2022

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