Red Ink in The First Quarter of 2019 as Car Buyers Hold on to Their Money

  Leo Kok


 1 Apr, 2019

New Vehicle Sales Report March 2019 Naamsa

Monday’s vehicle sales announcement had a whiff of April Fools about it as the official sales statistics revealed further declines in March.

Naamsa, the industry body that aggregates and audits vehicle sales, reported that 47 718 vehicles were sold last month. This is 3,1% or 1 518 units down on the same month last year and it means that the first quarter of 2019 ended in the red.

The biggest decline came from the passenger vehicle market, which dropped to 30 346 vehicles despite being propped up by significant sales to the vehicle rental market.

The light commercial vehicle market showed some signs of growth, improving from 14 719 in March last year to 14 994 this month (1,9%). Medium commercial vehicles grew by 6.2% to 775 units sold and sales in the heavy commercial vehicle market improved by 5.3% to 1 046.

Overall, the market has been in decline since the start of the year. For the first three months of the year the industry sold 134 479 vehicles, compared with 141 269 vehicles in the same quarter last year.

Naamsa and several economists blame the cocktail of bad news and pre-election jitters for the low sales. These include Eskom’s loadshedding trouble and relatively low economic growth that, according to Naamsa, makes people less likely to invest their money in a new vehicle at the moment.

While the reasons for the decline remain speculation, it is clear that the market is performing poor at the moment. This becomes even more evident if you remove the sales to the vehicle rental market – which is often done with deep discounts – and you consider that the last month of a quarter is usually the best month of the three, since dealers try everything to “make target” and earn their quarterly sales bonusses.

Bad news aside, some brands have done really well. Toyota seems to be holding steady at the helm with sales of 11 795 vehicles in March and Nissan had a good month with sales of 5 417 vehicles, within fighting distance of Volkswagen in the number two spot with 6 754 vehicle sales.

Further down the ranking Suzuki came within 12 units of Mazda (1 162 units vs. 1 150 units), possibly their closest ever and Porsche sold 144 units, making them bigger than Peugeot, TATA and Subaru and almost as big as Opel.

This month also saw the first official numbers from GWM’s luxury SUV brand Haval. At the moment Haval only publish an aggregate number, which in March was 631 units. It places them 40 units behind Mahindra (671 units) in fifteenth place overall and means that they are certainly a force to be reckoned with.

Way up in the stratosphere of vehicle sales, the super-luxury brands seem unbothered by the slow pace of the overall market. Bentley sold four cars, Lambo and Ferrari sold six each and Maserati retailed five new cars. Unfortunately, Bentley and Lamborghini, like sister-company Porsche, only report a single sales number, without saying which vehicles were sold.

Ferrari does not seem to worry about reporting which vehicles they sold, stating proudly that they delivered a new 488 Spider, four 812s and a Portofino in March. Maserati in turn sold one Ghibli and four Levantes.

While local sales are predicted to continue struggling, the local vehicle manufacturers are making a killing with export sales. Naamsa reports that the industry is heading for another new record and that it has already exported 89 221 cars and SUVs in the first quarter, compared with 71 819 vehicles in the same period last year.

Of the exporters, Mercedes-Bens is the clear leader. It shipped 11 837 locally produced C Class models abroad in March, followed by Volkswagen with 9 571 Polos. Toyota (5 220 mostly Hilux and Fortuner models), BMW (5 276 X3s) and Ford (4 193 Ranger and Everests) complete the top 5 proudly South African vehicle exporters.

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