Latest vehicle sales ‘a hammer blow’ to industry hopes
But while the local market is looking bleak, foreign buyers are snapping up SA vehicles
New-vehicle sales maintained their depressingly familiar downward path in August.
Demand for cars and commercial vehicles fell 5.1% compared with a year earlier, from 47,977 to 44,566. Cars, as so often this year, underperformed the overall market, retreating 7.6% from 31,456 to 29,075.
Ghana Msibi, head of WesBank’s motor business, described the figures, released on Monday by the department of trade & industry, as a “hammer blow” to hopes that the market decline could be slowing. With another fuel hike due this week, the immediate outlook is not about to improve for consumers and fleet buyers.
Mike Mabasa, CEO of the National Association of Automobile Manufacturers of SA, said the Absa purchasing managers’ index reinforced this pessimism. “Worryingly, purchasing managers expect conditions to worsen going forward,” he said.
Cyril Zhungu, Standard Bank’s head of automotive retail finance, said that while consumer demand for vehicles is holding, more buyers are shifting to the cheaper used-car market. This is despite vehicle manufacturers restraining prices on new vehicles.
“They are doing their best to support the market,” he said. “I believe their pricing strategy has been very responsible.”
Sales of commercial vehicles were also disappointing in August. Light commercials improved 0.5% and medium commercials 6.6% but heavier trucks and buses lost a lot of ground from a year earlier.
By the end of August, aggregate industry sales for 2019, at 349,203, were 3.9% behind the 363,243 at the same stage in 2018. Car sales at end-August were 5.7% down, from 239,823 to 226,069.
As usual, it was up to exports to lighten the gloom. The industry exported 44,566 vehicles in August — 37.8% more than 12 months earlier. Volkswagen SA had a bumper month, shipping out 15,659 vehicles, followed by Mercedes-Benz SA (8,869), Ford (7,032) and BMW (6,514). All exported many more vehicles than they sold locally.
To the end of August, aggregate exports of 262,014 were 22.9% ahead of 2018’s 213,261.