Car rental industry could rescue sales in new-vehicle market
One in eight new vehicles — 12.5% — sold in August went to the industry. In the car market, it was 17%, or one in six
The vehicle rental industry may yet save the blushes of motor industry analysts who have predicted 2%-3% growth in the new-vehicle market, Standard Bank’s Derick de Vries says.
Latest sales figure show that after a disappointing August the market in 2018 trails 2017 by 0.6%. In the first eight months of 2017, 365,534 cars and commercial vehicles were sold compared to 363,233 in 2018.
That does not leave much time for the forecast second-half recovery to take effect.
However, De Vries, head of Standard Bank’s vehicle and asset finance division, said increased purchases by rental companies could save the day.
One in eight new vehicles — 12.5% — sold in August went to the industry. In the car market, it was 17%, or one in six.
“There is a lot of rental replacement in the offing,” said De Vries.
“Some companies also need to boost their fleet numbers.”
Steep fuel price hikes have been blamed as one of the reasons for the market’s lacklustre performance in 2018, but De Vries said the government’s decision to hack September’s planned price rises would have no immediate effect on sales.
Instead of the anticipated 23c-25c, petrol will rise by 5c per litre and diesel will be unchanged.
De Vries said the damage had already been done in preceding months. “It’s a little relief but it won’t contribute to more sales,” he said.
New-car sales retreated 2.2% in August but year-to-date they are marginally ahead of 2017: 239,816 against 239,714. Commercial vehicles are in arrears in 2018 but there was good news for medium and heavy trucks in August, when they increased sales against 2017 for the second month in a row.
Vehicle exports improved 7.7% in August from a year earlier. After eight months, however, they are 3.1% behind: 213,163 against 219,887.