Surge in vehicle exports fails to offset domestic gloom
The latest monthly figures pretty much erase hopes of this year's sales beating those of 2017
A monthly record for new-vehicle exports achieved in September was not enough to lift the gloom from a disappointing domestic market.
Volkswagen SA and BMW SA had particularly strong export months, alongside Ford and Mercedes-Benz SA, as the industry shipped out 36,781 vehicles. That beat the previous record of 36,341, achieved in September 2017.
There was no such cause for celebration in the South African market. Even the most optimistic analysts are saying that the full-year market will be lucky to match 2017. After nine months, sales of all new vehicles, at 412,916, are 0.8% down from 2017’s 416,167. Car sales are 0.3% weaker: 272,609 compared with 273,392. The gaps are small, but after early-year forecasts of up to 4% growth, the numbers are disheartening.
Figures released on Monday by the department of trade & industry show that car sales fell 2.6% compared with September 2017, from 33,678 to 32,786. As a result, the total market for cars and commercial vehicles fell 1.9%, from 50,644 to 49,670.
Standard Bank’s Cyril Zhungu is one of those who forecast 2018 growth, but now he expects the market to finish at about the same level as 2017.
The National Association of Automobile Manufacturers of SA (Naamsa) thinks it could fall short.
Zhungu said the picture reflected how the economy and consumer sentiment — at both private and corporate level — had changed in recent months. The imminent rise in fuel prices to record levels would make a difficult situation worse. He said there was still demand but rising vehicle ownership and operating costs were deterring many customers from closing deals.
Like most analysts, he is now cautious about predicting what will happen in 2019.
Naamsa agreed that sales reflected “a difficult and subdued economic environment”.
Director Nico Vermeulen said: “Consumers’ disposable income, already under pressure, will be further impacted by the record increase in fuel prices. Ongoing weakness in purchasing managers’ indices as well as the Reserve Bank’s leading indicator suggests that business conditions and the general trading environment will remain difficult during the next six to nine months.”