JOHANNESBURG - South Africa’s new vehicle sales slump continues, with February 2021 having seen an overall decline of 13.3 percent versus the same month last year. According to Naamsa, 37 521 vehicles were sold last month, representing a decline of 5775 units.
However, many industry experts are predicting better times ahead as the market stabilises.
Currently it’s the passenger vehicle market that’s feeling the biggest pinch, having fallen by 18.1 percent year on-year, while light commercial vehicles fared better with a 3.2 percent decline versus February last year. But there was some good news on the commercial front, with the heavies seeing a sales gain of 3.1 percent, although the medium commercial vehicles were down 14.8 percent year-on-year.
Top selling vehicles and brands
According to figures released by WesBank, South Africa’s top selling vehicle in February was the Toyota Hilux, with 3031 units sold. It was followed by the Volkswagen Polo Vivo, which accounted for 2543 units.
The Ford Ranger was, as usual, the second best-selling bakkie in the country, with sales of 1858 units, and it was followed by the Isuzu D-Max, which recorded 1315 sales.
The Volkswagen Polo (latest generation) was the second best-selling passenger car in February (1733 units) and it was followed by the Suzuki Swift, which tallied up an impressive 945 sales.
When it came to overall brand sales, Toyota enjoyed a health lead in February, with 8308 sales, putting it ahead of Volkswagen (6652) and Ford Motor Company (3020). Hyundai was fourth with 2792 sales, and the Korean brand was followed by Nissan (2625), Suzuki (2142) and Kia (1601).
Economic challenges continue
84 percent of all South African new vehicle sales took place through the dealer channels, while 10 percent represented sales to the rental industry, as well as 3.4 percent to government and 2.3 percent to corporates.
“The performance of the new vehicle market for the first two months of 2021, compared with the pre-COVID first two months of 2020, continues to reflect the economic and social challenges in South Africa considering that the country’s economy was already in a recession before the outbreak of the global health pandemic,” Naamsa said.
Encouraging signs
However, WesBank marketing head Lebo Gaoaketse felt encouraged by the relative stability that the new vehicle market showed in February.
“Interestingly, the correlation between market activity for WesBank between February 2020 and February 2021 is uncanny in its similarity,” Gaoaketse said.
“Were it not for the seismic shift that came to bear in March last year, any market commentator would have been forgiven for ignoring its normality.”
“The relative stability in the market during the first two months of the year should provide some level of relief for the industry,” Gaoaketse added.
“Month-on-month, February sales show a fairly significant improvement compared to the first month of the year. With consumers better-adapted to the pandemic and living rhythm in the country, low interest rates continuing to assist indebtedness, and economic sectors slowly returning to more regular operations, there is much to be hopeful for the South African motor industry.”
National Automobile Dealers Association chairperson Mark Dommisse also felt positive about last month’s figures.
“Vehicle sales in February were more encouraging than we had expected for a shorter trading month than January. Overall dealer sales across all segments increased by almost 3000 units month-on-month. It was heartening to see that Passenger Vehicle sales increased by almost 1500 units and Light Commercial Vehicle sales improved by close to 2000 units,” Dommisse said.
“A slow start to the year had been expected, as the coronavirus and sluggish local economy have had a negative effect on consumer and business confidence. But February sales figures proved better than we, as the dealer body, had anticipated,” he added.
“Unfortunately, consumers have been hit with a double whammy in the past week with the announcement of an upcoming electricity hike of 15.6 percent in April and another big increase in the price of fuel from Wednesday.
“These are expected to have a negative effect on the market going forward. Some new vehicle dealers are also experiencing a tough time with stock shortages on certain models.” This is due to the current global shortage of semiconductors, Dommisse said.
Export sales also down
February’s export sales amounted to 29 582 units, which represented a decline of 8.0 percent year-on-year, Naamsa reported. However, the association - which now calls itself the Automotive Business Council - added that export volumes have been steadily gaining traction, with year-to-date exports having risen by 3895 units.
Going forward, it is anticipated that the upward momentum will continue for exports, as global economies experience a rebound due to their Covid-19 vaccination campaigns.