Picture: SUPPLIED
Picture: SUPPLIED

Attractive offers by vehicle manufacturers is one of the reasons for the aggregate year-on-year increase in domestic vehicle sales in the month of September, the fourth successive month in which volumes have risen.

Purchases were made despite the sluggish economy, which slipped into recession during the year, and despite the pressures on household income.

Wesbank head of brand and communication Rudolf Mahoney believed that customers were finding better value in the new car market because manufacturers were offering fantastic marketing deals. He said the results were  positive and indicated a “remarkable recovery” in the market over the past few months, specifically in the passenger and light commercial vehicle segments.

While listed car prices had not been reduced much, Mahoney said manufacturers were pumping money into the market in the form of special deals. This was sufficiently attractive to counteract the negative pressures on household income. The good deals on offer made the new car market more attractive than the used car market.

According to figures released by the Department of Trade and Industry Monday and adjusted by the National Association of Automobile Manufacturers (Naamsa) to correct omissions, aggregate new vehicle sales came in at 50,675 units, up by 3,138 units or 7% from the 47,357 vehicles sold in September 2016. New passenger cars sold came in at 33,669 units, a gain of 1,868 cars or 5.9% compared with the 31,801 new cars sold in September 2016.

Toyota sold the most vehicles (11,123) during the month, followed by Volkswagen (8,012) and then FMC (6,175).

Export sales at 36,359 vehicles had registered an improvement of 3,595 units or a gain of 11% compared with the 32,764 vehicles exported in September 2016.

Naamsa said encouraging gains were led by the new light commercial vehicle and new car segments. New vehicle exports had also registered strong gains.

"The recent sharp increase in the Reserve Bank’s leading indicator and the improvement in the purchasing managers index suggested that further improvement in domestic sales could be expected in the months ahead," the association said. An overall year-on-year improvement of about 1.5% for 2017 was expected.

"Over the past four months, the domestic automotive industry had held up well in the current challenging economic environment. A number of factors had contributed to the improved momentum in local sales and these included reduced new vehicle pricing pressures currently at an annualised rate lower than inflation, the July 2017 reduction in interest rates and continued highly attractive sales incentives," Naamsa said.

Sales during the second half of the year are usually higher than aggregate sales in the first half.

Domestic sales of industry new light commercial vehicles, bakkies and mini buses at 14,523 units during September 2017 reflected a substantial gain of 1,520 vehicles or an improvement of 11.7% compared with the 13,003 light commercial vehicles sold during the corresponding month last year. This was on top of the improvement in light commercial vehicle sales in recent months.

Naamsa said the performance of the medium and heavy truck segments of the industry reflected “a generally poor investment sentiment in the economy”.

The association noted that about 80.2% of total vehicle sales in the industry were made by dealers, an estimated 14% represented sales to the vehicle rental industry, 3% to government and 2.9% to industry corporate fleets.

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