Tough trading offset by dealer resilience in June

The new-vehicle market’s sales performance was inspiring in June 2022 considering ever-increasing challenging market conditions, says automotive business council, naamsa.

Absa June 2022

Sales figures released on Friday revealed that aggregate domestic new vehicle sales increased by 7.6% to 41 019 units last month from the 38 131 vehicles sold in June 2021.

Of these sales, an estimated 85.2% or 34 935 vehicles represented dealer sales, with the vehicle rental industry accounting for 8.6% of overall sales, industry corporate fleets 5.0% and sales to government 1.2%.

naamsa CEO, Mikel Mabasa, said the new-vehicle market delivered an upbeat performance last month considering several upside risks to the economy and the inflation outlook.

However, Mabasa warned that the spillover effect of reduced disposable income will increasingly result in lower demand for non-essentials as consumers start to feel the effect of rising food and fuel prices, together with higher interest rates, on their cost of living.

“In a further blow to the economy resulting in escalating business and consumer anxiety, Stage 6 load-shedding was implemented during the month for only the second time since 2019,” he said.

Mabasa added that Stage 6 load-shedding will cost the South African economy dearly at a time when it is already facing a myriad of headwinds and battling to recover from COVID-19 and the impact of the devastating floods in KwaZulu-Natal.

Sales of new passenger cars increased last month by 20.6% to 29 545 units from the 24 497 new cars sold in June 2021.

The car rental industry accounted for 11.2% of car sales in June 2022.

However, sales of new light commercial vehicles, bakkies and minibuses slumped by 20.8% or 2 329 units in June 2022 to 8 877 units from the 11 206 light commercial vehicles sold during June 2021.

This decline is likely as a result of production still being suspended at Toyota South Africa Motors’ manufacturing plant in Prospecton near Durban because of significant damage to the plant during the recent floods in KwaZulu-Natal.

Sales of medium commercial vehicles increased last month by 1.3% year-on-year to 697 units, while heavy truck and bus sales rose by 9.2% to 1 900 units.

Exports of South African produced vehicles grew by 18% to 33 054 units in June 2022 from the 28 010 vehicles exported in the corresponding month in 2021.

Mabasa said passenger car exports performed well during the month, but light commercial vehicle exports lagged because of the knock-on effects of the KwaZulu-Natal floods and the ongoing shortage of semiconductors impacting on vehicle production.

“Although the ongoing war in Ukraine, supply chain disruptions and the risk of stagflation are hampering global growth and will weigh on the domestic industry’s export potential, prospects for 2022 remain optimistic on the back of further new locally manufactured models being introduced during the year,” he said.

Download an interesting infographic on the sales here: Absa Vehicle and Asset Finance - June 2022

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