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SA car sales: April holidays takes a heavy toll

2016-04-04 08:06

DROP IN SALES: The used-car market in SA in on the rise. Image: iStock

Johannesburg - Public holidays in March saw a new vehicle sales plummet with 47 631 new vehicles being sold, a drop of 14% compared to the same period in 2015, reports National Association of Automobile Manufacturers of South Africa (Naamsa).

Naamsa reports that March 2016 aggregate new vehicle sales at 47 631 units had registered a decline of 7 758 vehicles or a fall of 14% compared to the 55 389 vehicles sold in March 2015.  

March 2016 export sales at 27 714 units reflected a decline of 6 311 vehicles or a fall of 18.5% compared to the 34 025 vehicles exported in March 2015.

Overall, out of the total reported Industry sales of 47 631 vehicles, an estimated 40 205 units or 84.4% represented dealer sales, 8.7% represented sales to the vehicle rental Industry, 3.6% to Industry corporate fleets and 3.3% to government.

Market under pressure

Affected in part by the Easter holidays (which this year fell during March and last year during April), the new car market had continued to experience pressure during March, 2016 and at 30 702 units registered a decline of 4766 cars or a fall of 13.4% compared to the 35 468 new cars sold in March 2015. The car rental Industry had continued to make a positive contribution and accounted for 12.7% of new car sales during the month. Franchise vehicle dealers were experiencing ongoing pressure on margins.  

Domestic sales of industry new light commercial vehicles, bakkies and mini buses at 14 507 units during March, 2016 reflected a decline of 2 359 units or a fall of 14.0% compared to the 16 866 light commercial vehicles sold during the corresponding month in 2015. Model run-outs and model run-ins had played a role in the lower March sales numbers. 

Dealer, rental, used-car market

Sales through the dealer channel were down 18%, year-on-year. Sales through the rental channel continued to contribute to activity in the new vehicle market and this segment saw year-on-year growth of 220% in March. However this was insufficient to limit the impact of consumers moving to the pre-owned market. Sales of buses, as well as medium, heavy, extra heavy commercial vehicles also fell more than 20%.

Demand for vehicles, as measured through the volume of finance applications received, was also negatively affected. Finance specialist WesBank resorts that hat new vehicle finance applications slid 20%, year-on-year while demand for used vehicles declined 3%. Demand for used vehicles now outstrips new vehicles 2.36:1 – a figure last seen in December 2009.


'Negative impact'

Rudolf Mahoney, Head of Brand and Communications at WesBank, said: "The March public holidays, combined with other economic headwinds, have had a very negative impact on the performance of new vehicle sales. With three fewer business days and consumers going away on holiday there was major disruption for car dealers. However, the public holidays are not solely responsible for these sales figures. The massive decline in commercial vehicle sales is attributed to low business confidence in the prevailing economic climate.”

“It’s safe to say that we’re now in a used market. Although demand softened slightly for used cars, it remains strong when compared to the rest of the market. The used-to-new sales ratio now sits at 1.5:1, indicating that consumers who previously bought new are now taking their budgets to the used market. Those who have cars are also choosing to hold onto them for longer, further affecting vehicle sales.”


Read more on:    wesbank  |  naamsa  |  south africa  |  car sales  |  new models

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