Spare a thought for the team at the National Association of Automobile Manufacturers of SA (Naamsa), who just released the sales statistics for February 2020. They reported that the overall market remains in the red, with a decline of 0.7% compared with February last year and, surprisingly, a decline of 8.4% in vehicle exports in the same month.
In numbers, that means that the industry sold 43 485 vehicles in February and exported 30 832 vehicles compared with 43 805 vehicles sold in February last year and exports of 33 675 vehicles. Naamsa is watching the overall vehicle market continue its decline, which started in 2013 (with a small uptick in 2017) and it has to contend with a growing number of non-reporters, which now include Mercedes-Benz, BMW, Bentley, Porsche and Lamborghini. At best, these manufacturers only report an aggregate number and at worst they do not report sales figures at all.
According to Naamsa, BMW and Merc have decided to only report their aggregate sales numbers every quarter. This means that their monthly sales (1 831 for Merc and 1 059 for BMW in February 2020) are guestimates and the sales for the other non-reporters are accurate, but not split by model. Naamsa adds that these non-reporters are following orders from their global parent companies, but some believe it to be a market tactic. If you are charging premium rates, you do not want to show your competitors or the market in general that you are losing sales or market share.
For instance, it would be hard to convince the market that a Mercedes-Benz X-Class is a force to be reckoned with if monthly sales are in the low teens, which some dealers have reported to be the case. Now, this and other model figures are rolled into an aggregate monthly number and only reported on a quarterly basis. Whatever the reason for the raft of non-reporters, their inclusion in February (as aggregates or estimated numbers), makes a direct comparison with January 2020 very difficult. Keep in mind that in January this year, BMW’s figures were missing completely.
That said, February’s sales figures improved from 40 234 in January to 43 485 in February, a healthy improvement. In contrast, the market declined by 0.7% from February last year to February this year. Further evidence that the inclusion of estimated numbers for BMW, and now also Merc, is skewing statistics is seen in the fact that the passenger vehicle segment grew by 2.6% over January and a whopping 7.6% over February last year.
In other segments, the market for light commercials declined by 17.7% over February last year to 11 625, while the sales of medium, heavy, extra heavy trucks and busses improved by 3.7% to 2 195 units. Among the well-known brands, Toyota retains its crown, which it has held for the last 40 consecutive years, with 9 374 vehicles sold in February. Volkswagen follows with 7 674 units sold, of which most are passenger vehicles, making it the passenger vehicle leader. Interestingly, Volkswagen also significantly outperformed the other manufacturers with vehicle exports, building and shipping 10 409 Polo models for markets abroad.
Looking ahead, Naamsa and several market commentators expect the market
to continue shrinking, with further pressure put on individuals and
businesses with the increased fuel levy, an increase in CO2 tax and a
lowering of the threshold for taxing emissions and higher tax on double
The Ford Motor Corporation remains firmly in third place with 4 375 sales, followed by Nissan (3 493). Nissan has shown a marked improvement from a poor January, where it came within a whisker of being overtaken by Hyundai, which was in fifth place in February with sales of 2 926 units. Further down the sales ladder, Suzuki once again broke its own sales record and sold 1 696 units, while Peugeot Citroën improved significantly from a slow start in January to sell 258 units. It would perhaps make business sense to have these brands absorb Opel, which it now owns globally, to combine forces and help this German brand improve from its current sales slump (82 units in February).
Other notable performers include Haval, now a regular player in the top 10 best sellers with sales of 1 072 units in February, and Mahindra, which ended its best month yet with 767 new vehicles sold. Lastly, in the upper stratosphere of exclusive cars, Maserati took the lead in February with sales of 7 units, followed by Bentley (3 units), Lamborghini (2 units) and Ferrari (1 sale). Porsche, with its wider range of products, sold 120 units.
Looking ahead, Naamsa and several market commentators expect the market to continue shrinking, with further pressure put on individuals and businesses with the increased fuel levy, an increase in CO2 tax and a lowering of the threshold for taxing emissions and higher tax on double cab pick-ups. Interestingly, the CO2 taxes and tax threshold are already a lot more punitive in South Africa than it is in a country like Germany, where the fuel quality is much higher and emissions can therefore safely be lowered. In effect, South Africans are being taxed for something they can do nothing about.
One good indicator that supports this shrinking expectation is the Absa Purchasing Managers Index, which has dropped to its lowest point since 2009. This index, which is referenced in Naamsa’s market report, is a barometer of businesses’ expectation of future market activity. At such a low point, it shows that businesses are expecting the market to decline and business to slow down in the next six months.