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"Industry domestic sales ended 2018 on a weak note with aggregate industry new vehicle sales for December 2018," reports Naamsa. At 39 984 units, December 2018 shows a decline of 767 vehicles or -1.9% compared to the 40 751 units sold during the corresponding month of December 2017.
The December 2018 new passenger car market and light commercial vehicle (LCV) market reflected year-on-year volume declines of 0.2% in the case of new cars and a substantial decrease in the case of light commercial vehicles of 7.0%.
Huge improvement
Sales of medium commercial vehicles had also been weak, declining by 10.1%. On the other hand, sales of heavy commercial vehicles had improved 13.8% year on year.
SEE: Good news for SA car sales - 'highest monthly total in the past three years' - Naamsa
In contrast, export sales had recorded a massive improvement in December 2018 at 31 437 units, an increase of 11 330 vehicles or a remarkable gain of 56.3% compared to the 20 107 vehicles exported during December 2017. Naamsa: "The strong December industry export performance had contributed to a record annual export sales figure for the industry."
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Overall, out of the total reported Industry sales of 39 984 vehicles, an estimated 34 012 units or 85.0% represented dealer sales, an estimated 9.3% represented sales to the vehicle rental industry, 3.2% to government and 2.5% to industry corporate fleets.
Naamsa said: "As a major sector contributing around 7.7% to South Africa’s Gross Domestic Product (GDP), the automotive industry experienced contrasting fortunes during 2018 with domestic new vehicle sales and revenue in respect of new and used vehicles, as well as aftermarket parts and accessories, recording declines in real terms. In contrast, industry export business registered modest gains."
Following the modest improvement in new vehicle sales of 1.9%, in volume terms, in 2017 – new vehicle sales declined by 1.0% from 552 190 units in 2018 compared to the total of 557 703 units in 2017.
Challenging year
Naamsa said: "The annual decline reflected the weak macro-economic environment, pressure on consumers’ disposable income and fragile business and consumer confidence. The November 2018 0.25% increase in interest rates would also have impacted on new vehicle financing and sales.
"The fall in new car and light commercial vehicle sales occurred despite the strong contribution by the car rental sector during the year, attractive sales incentives by automotive companies and improvement in new vehicle affordability in real terms.
"Current market conditions in the two sectors continued to be characterised by a buying down trend with sales of entry-level vehicles, small utility vehicles and crossovers performing well in relative terms. The premium car segment had continued to experience significant pressure."
The following table summarises annual aggregate industry sales by sector since 2014:
Naamsa adds: "The annual sales should be viewed in context. Twelve years ago (2006) the domestic market recorded an all-time high sales figure of 714 315 vehicles of which the new car market had represented 481 558 units. In 2006 South Africa’s economic growth rate had been 5.6% compared to the 2018 expected growth rate of less than 1.0%.
"Interestingly, 2018 sales of medium and heavy commercial vehicles had recorded further improvement, in line with the trend over the second half of 2018, and the stronger sales suggested an improvement in capital investment sentiment in South Africa.
"2018 Vehicle exports had registered an annual record industry export figure and total vehicle exports at 351 154 units reflected an improvement of 13 058 vehicle exports or a gain of 3.9% compared to the 338 096 vehicles exported in 2017. Exports of light commercial vehicles and heavy trucks, in particular, had registered substantial gains, in volume terms, of 20.9% and 17.6%, respectively."
The following table reflects the industry’s export sales performance over the past few years:
Naamsa said: "The momentum of export sales had increased over the second half of last year and, based on relatively strong order books reported by most vehicle exporters, exports were expected to reflect further growth in 2019 and subsequent years. The projection for industry export sales for 2019 was currently at 385 000 export units."
