Vehicle sales last month saw a very modest improvement over June’s numbers, with overall volumes rising.
SOUTH African vehicle sales last month saw a very modest improvement over June’s numbers, with overall volumes rising from 31 867 units to 32 396, according to the National Association of Automobile Manufacturers of SA (Naamsa).
However, overall sales figures are still 29.6 percent down on the same month last year, which is also a very modest improvement over June’s year-on-year comparison.
The passenger car market was by far the most severely hit in July 2020, registering a 35.8 percent year-on-year decline, and something that could be partly attributed to the steep decline in demand for rental cars as the tourism industry reels from the Covid-19 pandemic and its associated travel restrictions. The rental industry accounted for just 1.4 percent of car sales last month.
Light commercial vehicles were down by 19.7 percent versus July last year, while medium and heavy commercial vehicles registered respective declines of 12.9 percent and 13.3 percent.
Mirroring the domestic market situation, South Africa’s vehicle exports also declined by just under 30 percent, although this was a welcome improvement over the previous month.
Toyota still on top
Toyota once again topped the local sales charts in July, with 7 464 units sold.
It was followed by Volkswagen (5 075 units), Ford (3 194), Hyundai (2 520) and Nissan (2 132).
Rounding out the top 10 were Isuzu (1 671), Mercedes-Benz (1 367), Renault (1 333), Suzuki (1 213) and Kia (905).
Naamsa did not release sales figures for individual model ranges during the month of July.
Recovery could take years
Mark Dommisse, chairperson of the National Automobile Dealers’ Association (Nada), warned that the market could take more than a year to recover.
“July was a very difficult trading month and we don’t see a quick recovery from this new reality any time soon. In fact, we’re looking at a minimum of one to two years before we see any significant improvement in new vehicle sales,” Dommisse added.
“Consumers are still under massive pressure to meet their monthly household expenses, and cautious when making big-ticket vehicle purchases and committing to large financial payments.
“While there is some reprieve from recent interest rate cuts, rising fuel prices and general inflation will continue to pinch wallets into the foreseeable future,” Dommisse added.
Interesting new finance trend
There are some interesting trends emerging on the vehicle finance front, as WesBank’s Lebogang Gaoaketse pointed out that there was a shift towards earlier settlements of deals in July.
“We might have considered this as a result of consumers making affordability decisions in terms of monthly instalments, except that the bank’s average deal size is between 10 percent and 15 percent higher year-on-year across new and used,” Gaoaketse said.
“We will require more data before we can fully understand how buyer behaviour is changing.”