According to Naamsa, the national industry body that represents most vehicle importers and manufacturers, the industry sold a combined 40 506 vehicles in May. That is significantly more than in April – with all its holidays, when the manufacturers sold 36 787 vehicles – but less than in May 2018, when they sold 42 950 cars and commercial vehicles.
Compared with May 2018, the passenger vehicle market declined by 1.4% to 26 170, while the light commercial vehicle market dropped by 13% to 12 197 units. Medium commercial vehicles stayed flat (up marginally from 679 units to 681 units) and heavy (down 9.3% to 406) and extra-heavy trucks (down 15.9% to 991 units) and busses (down 27.2% to 59 units).
Naamsa and several industry analysts name the same culprits for the declining sales. The general economy is under pressure, household debt is high and growing, fuel prices are heading north and the whole market held its breath for most of May to find out what would happen with the general elections.
The same analysts will strip out the large volume sales. This is sales to rental companies, to the manufacturers themselves and to the government and its various organs to find out what the real state of the market is. In this case, these volume buyers represent over 12.3% or almost 5 000 units of the total vehicle market.
You could also cut the numbers by brand, which will highlight another trend that is common in a poor performing market – a propensity to buy trusted brands. What this means is that many people are willing to take a risk on a lesser known brand when they feel they have money to spare, but when they feel financially under pressure, they will opt for the well-known brands such as Toyota and Volkswagen.
In May, the top 5 brands were Toyota (and Lexus), Volkswagen (and Audi), Nissan (and Datsun), Ford and Hyundai. Together, these five brands represent 26 445 units of 65% of all the vehicles sold. If you count all the way to 10, the top brands together represent 34 011 vehicles or 83% of all vehicles sold.
This of course means that the smaller brands are having an even more horrid time in these tough times. Brands such as Subaru (86 cars), Tata (82 cars), the Fiat, Chrysler, Jeep, Abarth group (146 cars) and Opel (168 cars) are fighting against the large budgets and sales support from brands such as Toyota (9 772 cars) and Volkswagen (6 333 cars).
A quick note about vehicle exports – this segment has been growing well since last year and it helps to keep the factories buzzing and workers productive, but it too ended in the red in May. Vehicle exports dropped to 29 650 units, which is down by 8.8% over May last year.
Vehicle exports should recover in June, although the industry is readying itself for the next cycle of its three-year wage discussions and if it leads to an industry-wide strike, it will cripple local and export sales significantly.
In the higher stratosphere of vehicle sales, the supercar and super-luxury brands are doing as well as always., Ferrari sold a whopping 13 cars, including three 512s, Bentley retailed 8 cars and SUVs, Lambo 6 units and Maserati another 6. Remember that the VW brands (Bentley and Lamborghini and Porsche) do not break up their sales in different models and only report an aggregate number.
And for those who are keenly watching the Mercedes-Benz / BMW fight, it was won by Merc in May, selling 1 496 cars over BMW’s 1 284 cars.
For the rest of the year, Naamsa and others expect the market to stay in the red. This will be even worse if there is an industry strike, as the lack of production will spill into sales and will be worsened when the component and tyre industry wage talks start after the vehicle wage talks conclude.
For buyers, the picture should give them hope that they have the upper hand, especially with smaller and less-popular brands. If you are in the market for a new car or pick-up, do not be shy to negotiate and even compare dealers of the same brand. Since everyone is desperate to make a sale, they will most likely offer a discount, additional extras or other benefits for the price.