Vehicle Sales Drop in November, Industry Expected to End Year in the Red

  Carshop.co.za

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 4 Dec, 2018



New Vehicle Sales November 2018

After a buoyant October, Naamsa, the national association of vehicle manufacturers of South Africa, reported a rather large decline of 4.6% over November 2017, with both passenger vehicles and light commercial vehicles (bakkies) taking a knock. Industry pundits and experts expect the turbulent year to end in the red.

It looks like the South African new vehicle market will end the turbulent 2018 in the red, with market analysts expecting a full year decline from the 557 586 vehicles sold in 2017.

Naamsa, the national association of vehicle manufacturers of South Africa, reported a rather large decline of 4.6% over November 2017, with both passenger vehicles and light commercial vehicles (bakkies) taking a knock.

According to the official figures, which do not include non-reporters like BAIC, the industry sold 47 486 new cars, bakkies and trucks in November. Toyota (10 904 vehicles), Volkswagen (8 503 vehicles), Ford (5 729), Nissan (5 054) and Hyundai (2 508) were the top five best-selling companies.

The sales figures show that passenger vehicles declined by 5.4% to 31 054 units and that the vehicle rental industry bought nearly a quarter (23.9%) of all the cars sold. Bakkies and other light commercials declined by 6.1% to 13 695 units.

Earlier this year, WesBank predicted an increase in vehicle sales of around 0.75% for 2018. This small increase looks unlikely, as year-to-date sales tally up to 516 952 and it is very unlikely that the industry will sell the 44 801 vehicles required in December to reach the bank’s predicted sales number for the year, especially in the relatively weak holiday month.

Vehicle sales have been in decline since 2013, when 649 216 vehicles were sold. The only year that bucked the trend was 2017, when the market increased by 1.8% over 2016. The best year ever for vehicle sales was in 2006, when the industry sold a combined 702 610 new cars.

Naamsa reports that the overall economic environment remains difficult and that private consumers are facing increasing pressure on their disposable income. They also blame the “surprising” increase in interest rates for this pressure. In the past, economists have said that an increase in interest rates can take several months before its impact is seen in vehicle sales. More recently, the impact has been felt a lot faster, given the general pressure on consumer spending.

A couple of brands bucked the general downward trend. Ferrari sold a whopping 11 cars, including five Portofinos. Datsun also had a cracker of a month, selling 701 units of the GO and GO+, which it facelifted during the month.

Mahindra, who facelifted the KUV, sold 156 units of this entry-segment vehicle to help it sell 506 vehicles, pushing it ever closer to Honda. On the other side of the coin Peugeot Citroën dropped below 60 units for the month nationally.

On a more positive note, vehicle exports increased for the month and are up very slightly over the same period last year. BMW has picked up speed with X3 sales and exported 7 207 vehicles, while Volkswagen (7 952 exports), Ford (6 262 exports) and Mercedes (8 306 exports) are leading the export charge.



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