We built and exported more cars than before, but we sold less. Our market is under some pressure, in line with the general economy, and vehicle rental sales propped up the market to some degree.
Naamsa, the industry body that reports on vehicle sales and industry issues, reported on Tuesday that the industry sold 39 984 vehicles in December. Of this, 26 547 units were passenger vehicles, with a further 11 218 in light commercials (bakkies, panel vans and similar). The remainder was split between medium, heavy and extra heavy trucks and busses.
Vehicle sales are down 1.9% on December 2017, when 40 751 vehicles were sold, and down a round 1% on the full year figures for 2017. While 1% is not a significant drop in sales from the last year, it is part of a downward trend in vehicle sales over the past few years.
The industry sold 552 190 vehicles in 2018, compared to 557 703 in 2017. For reference, the industry’s best market to date was in 2006, when 714 315 new vehicles were sold. As recently as 2015, the vehicle sales market still notched up 617 648 new vehicle sales, which is significantly higher than in 2018 or than the market forecast of 558 000 vehicles for 2019.
In contrast to the lacklustre local vehicle sales, the industry recorded a massive improvement in export sales. Naamsa reports that the industry exported a record 351 154 vehicles in 2018, which Mercedes-Benz (C-Class) and Ford (Ranger, Everest) contributing the largest portion of these exports. In total, the South African vehicle manufacturers built an estimated 610 000 vehicles in the past year for both the local and export markets.
According to several market analysts, the last few months of 2018 saw a decline in demand from the private buyers, due to a small increase in interest rates and general pressure on their disposable income. Vehicle rental companies increased their purchases before the holiday season and so counteracted some of this decline.
These same analysts expect the same pressure on disposable income and general economic malaise to impact on vehicle sales in 2019, with only a small increase from 552 190 vehicles to 558 000 vehicles expected in the new year.
Looking at general vehicle sales in December, some brands performed very well. Renault appeared out of nowhere and sold 2 934 units to pip Hyundai to a place in the top 5 vehicle brands. Toyota again led the market with 9 038 units, followed by Volkswagen (6 594). Nissan (3 906 vehicles) beat Ford (3 467) to the third spot.
In the upper end of the market Bentley had a good Christmas with 13 vehicles sold, of which 8 were Bentayga. Ferrari and Maserti each sold four cars and Porsche ended the year with 112 vehicles sold in December.
Interestingly, Jaguar reported the sale of four I-PACE models. This all-electric SUV is expected in South Africa in the first quarter of 2019 and this first sale probably represents the first models for local testing and marketing.
For 2019, one should keep an eye on the brands just below the Top 5. Hyundai introduced several new products, and more are planned for 2019, so they should see a further improvement in vehicle sales. Suzuki is officially part of the Top 10, thanks to good pricing and new models, such as the new Swift and Jimny and rumour has it that their turbo-charged Suzuki Swift Sport is due around mid-2019.
One should also keep an eye on the ever-growing SUV market. This market has grown significantly in popularity and product offerings. For some brands, like Toyota, Ford and Volvo, over 50% of their total passenger vehicle sales are now SUVs.
There is significant growth in the small SUV segment with the new Ford Ecosport, Toyota CH-R and others, and there are even more models on the way, such as the new Mahindra XUV300 and Volkswagen T-Roc. Meanwhile other market segments will also see the introduction of SUV models. These include the luxury (Porsche Macan, BMW X7, Audi Q8) and ultra-luxury (Rolls Royce Cullinan) markets.