SALES' DROP: November 2016 saw a further decline in new vehicle sales. Image: iStock
Pretoria - Commenting on the new vehicle sales statistics for the month of November 2016, the National Association of Automobile Manufacturers of South Africa (Naamsa) commented that conditions in the new vehicle market, with the exception of the light commercial vehicle segment, has remained extremely challenging characterised by double digit year on year declines in most segments.
In contrast, export sales of new motor vehicles had reflected a noteworthy year on year improvement and remained on target for a new annual record.
Local sales takes a slump
November 2016 aggregate new vehicle sales at 46 413 units had registered a decline of 4925 vehicles or a fall of 9.6% compared to the 51 338 vehicles sold in November 2015.
Aggregate industry export sales at 31 508 vehicles for November 2016 reflected an increase of 3395 vehicles or an improvement of 12.1% compared to the 28 113 vehicles exported in November last year.
Overall, out of the total reported Industry sales of 46 413 vehicles, an estimated 38 557 units or 83.1% represented dealer sales, 8.5% represented sales to the vehicle rental industry, 4.8% sales to government and 3.6% represented industry corporate fleet sales.
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Despite attractive cash incentives on offer by a number of automotive companies, the consumer driven new car market had remained under pressure during November 2016 and at 28 334 units reflected a decline of 4548 cars or a fall of 13.8% compared to the 32 882 new cars sold in November last year, says Naamsa.
The contribution by the car rental industry accounted for 13.3% of all new cars sold during the month, however, the percentage was lower than the monthly car rental sales since the beginning of the year and could be attributed to the runout of the refleeting cycle.
Domestic sales of industry new light commercial vehicles, bakkies and mini buses at 15 632 units during November, 2016 reflected a noteworthy increase of 148 units or an improvement of 1.0% compared to the 15 484 light commercial vehicles sold during the corresponding month last year.
INCREASE IN SALES: The light commercial market (LCV) saw a slight increase in sales compared to November 2015. Image: Wheels24 / Charlen Raymond
Signs of hope
As anticipated, industry new vehicle exports during November 2016 had improved by 3395 vehicles or a gain of 12.1% compared to the 28 113 vehicles exported in November last year. The upward momentum in new vehicle exports was expected to continue into 2017 and export sales should contribute positively to South Africa’s current account of the balance of payments in the year ahead.
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Naamsa says: “Domestically, the short to medium term outlook for new vehicle sales remained extremely challenging. Double digit new vehicle price inflation, pressure on household disposable incomes, low levels of consumer and business confidence and relatively high interest rates represented a negative environment for new vehicle sales.
"On the other hand and in sharp contrast, automotive industry vehicle production remained on a relatively solid footing on the back of higher new vehicle exports.
“One reason for optimism revolved around recent increases in the leading indicator of the Reserve Bank which had registered positive growth for two consecutive months - suggesting the possibility of a modest improvement in the economy over the next 12 to 18 months. On the assumption that the economy would register growth in 2017, in real terms, of around 1.0% - new vehicle sales could grow next year by between 3.0% and 4.0%.”