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Pretoria - New car sales registered a further substantial fall in August 2016 while new light commercial vehicle as well as heavy truck sales improved, reports the South African Department of Trade & Industry.
Largely attributable to ongoing weakness in the new car market, a total of 46 146 new passenger cars were sold in August 2016, a fairly substantial decline of 4839 units (-9.5%) compared to 50 985 vehicles sold in the same period in 2015.
Aggregate industry export sales at 35 620 vehicles reflected, as expected, a huge improvement of 7508 (+26.7%) vehicles compared to the 28 112 vehicles exported in August 2015.
Read: New vehicle sales: Top-selling bakkies in SA
Overall, out of the total reported Industry sales of 46 146 vehicles, an estimated 37 345 units or 80.9% represented dealer sales, 15.0% represented sales to the vehicle rental industry, 3.1% represented industry corporate fleet sales and 0.9% sales to government.
The National Association of Automobile Manufacturers of South Africa (Naamsa) reports: "For the year and into 2017, new vehicle exports should contribute positively to South Africa’s current account of the balance of payments reinforced by lower vehicle imports on the back of declines in the domestic market."
Read: SA vehicle sales: 10 best-selling cars in August
In 2016, South Africa celebrates 120 years since the first car arrived in the country.
The five top-selling locally-built cars were:
1 VW Vivo
2 VW Polo
3 Toyota Hilux
4 Ford Ranger
5 Isuzu KB
BEST-SELLERS: The top-selling locally built cars in SA (from top left): Ford Ranger, Toyota Hilux, Isuzu KB, Volkswagen Polo and VW Polo Vivo. Image: Wesbank
New car market under pressure
The consumer driven new car market had continued to experience severe pressure during August, 2016 and at 30 356 units reflected a decline of 4 567 cars or a fall of 13.1% compared to the 34 923 new cars sold in August 2015, reports National Association of Automobile Manufacturers of South Africa (Naamsa).
This was despite a strong contribution by the car rental industry which had accounted for 21.6% of new cars sold during the month. Margins at auto industry retail/dealer level remained under significant pressure.
Click here for the full August vehicle sales report
Domestic sales of industry new light commercial vehicles, bakkies and mini buses at 13 542 units during August, 2016 had held up relatively well and only reflected a decline of 140 units or a fall of 1.0% compared to the 13 682 light commercial vehicles sold during the corresponding month in 2015.
Sales of vehicles in the medium and heavy truck segments of the Industry at 759 units and 1 489 units, respectively, reflected a mixed picture and, in the case of medium commercial vehicles, had registered a decline of 123 units or 13.9% and, whilst, in the case of heavy trucks and buses, a marginal decline of 9 vehicles or a fall of 0.6% compared to the corresponding month last year.
Market forecast
Naamsa said: "Domestically, the short to medium term outlook was one of low economic growth and further pressure on consumers’ disposable income. Double digit new vehicle price increases, as a result of exchange rate weakness and vehicle production inflation of 14.8% for the first seven months of 2016, relatively high interest rates, low levels of consumer and business confidence – would combine to further pressurize sales of new motor vehicles, particularly new cars.
"The lower levels of new vehicle sales represented a reflection of current difficult economic conditions in South Africa. The fairly substantial decline in the latest Purchasing Managers’ Index did not augur well for short to medium term prospects. In contrast, however, the Reserve Bank leading indicator for 2016 provided some grounds for optimism of a possible future turnaround in economic activity levels.
"The SA automotive industry, in particular, remained exposed to exchange rate weakness and current low confidence levels. Naamsa believees that the public and private sectors had a responsibility to calm current tensions in South Africa and to restore confidence through renewed commitment to sound macro-economic policy, continued fiscal discipline and stability."
Vehicle finance specialists Wesbank comments: "WesBank advises consumers to be sensible when it comes to structuring vehicle finance contracts, and not overextend themselves financially. Paying bigger deposits will help reduce monthly installments, while shorter contract terms will help buyers reach their contract’s breakeven point sooner – thus avoiding having to delay their new car purchase until it becomes a financial actuality."
