The performance of the new vehicle market last month was distorted by several one-off events in July 2021.
Aggregate domestic new vehicle sales rose by 30.9% in July 2022 to 43 593 units from the 33 312 vehicles sold in July last year.
An estimated 83.6% or 36 420 units of the overall total reported industry sales of 43 593 vehicles represented dealer sales, with an estimated 10.4% representing sales to the vehicle rental industry, 5.0% to industry corporate fleets and 1.0% sales to government.
Export sales increased by 177.7% to 31 242 units in July 2022 from the 11 252 vehicles exported in July last year.
Mikel Mabasa, the CEO of automotive business council naamsa, said on Monday that the new vehicle market’s performance in July 2022 was in line with the industry’s performance in June 2022 but was distorted when compared to the corresponding month in 2021 by the following:
Mabasa says the new-vehicle market’s performance year-to-date to end-July 2022 is still 13.9% higher than in the corresponding period in 2021.
However, Mabasa notes that the latest Absa Purchasing Managers’ Index (PMI) released on Monday, reveals that the index tracking expected business conditions in six months’ time dipped to 49.4 in July 2022.
This is the first time since the second quarter of 2020 – during the strictest phase of South Africa’s COVID-19 lockdown – that respondents expect conditions to worsen going forward.
Mabasa adds that consumer price inflation exceeded the top end of the South African Reserve Bank's (SARB’s) target range of 3% to 6% to reach its highest level since May 2009 at 7.4% in June 2022, as prices continued to accelerate, mostly for transport.
He says the SA Reserve Bank had consequently increased interest rates by 75 basis points in July 2022, the biggest hike since September 2002 and the fifth increase since November 2021.
“Further interest rate increases are expected for the balance of the year, which would impact consumer and business sentiment negatively, and consequently the new vehicle market,” he says.
Sales of new passenger cars increased by 50.2% to 31 455 units in July 2022 from the 20 938 new cars sold in July 2021, with the car rental industry accounting for 13.2% of car sales in the month.
Sales of new light commercial vehicles, bakkies and minibuses declined year-on-year by 6.9% to 9 547 units in July 2022 while sales of medium commercial vehicles increased by 33.0% to 790 units and heavy truck and bus sales rose by 18.3% to 1 801 units in the same period.
Mabasa said year-to-date vehicle exports moved into positive territory for the first time this year and at end-July 2022 were 2.9% ahead of the corresponding period in 2021.
“Although further new locally manufactured model introductions are expected to boost vehicle exports for the balance of the year, global economic growth prospects have been revised downwards.
“A key driver in this decline is the much weaker growth prospects for Europe, which is the South African automotive industry’s largest export region,” he says.
View the full report here: AVAF Infographic naamsa July 2022
The National Automobile Dealers’ Association (NADA) says it is reassuring to see a silver lining in the new vehicle market.
A completely new high-tech body shop has been constructed at the Ford Motor Company of Southern Africa’s plant as part of the company’s R15.8 billion investment in its assembly plant operations in Silverton, Pretoria.
Production has resumed on virtually all the production lines at Toyota South Africa Motors’ (TSAM) manufacturing plant in Prospecton in Durban.