September vehicle sales a ray of hope for better days to come
New units sold hit monthly record for year so far
New-vehicle sales hit their highest monthly level of 2019 in September, raising hopes that a prolonged period of market misery could finally be coming to an end.
Whether one month of relative stability signifies a turnaround, however, remains to be seen.
Figures released on Tuesday by the department of trade & industry show that new-vehicle sales fell 0.9% in September from a year earlier. That’s a quarter of the aggregate decline so far this year. By the end of September, the motor industry had sold 398,341 vehicles — 3.5% lower than in 2018 at the same stage. Car sales were down 4.9%, from 272,604 to 259,135.
September’s sales total of 49,191 vehicles included 33,139 cars, of which 27% were bought by the car rental industry. The total may have fallen just short of 12 months earlier but it was the best month of 2019 so far.
Ghana Msibi, WesBank’s executive head of the motor division, said that even dealers still “bleating” about miserable market conditions must feel some relief.
ECONOMIC TRENDS SUCH AS GDP GROWTH, STABLE INTEREST RATES AND CPI FIGURES COULD ALL STIMULATE CONFIDENCE
He said the industry at large should be pleased by the numbers and hope they are the start of a trend. Economic trends such as GDP growth, stable interest rates and CPI figures within the target range could all stimulate consumer and business confidence.
“If the country can sustain these conditions, the motor industry should enjoy some relief to the end of the year.”
Only once in 2019, in April, did vehicle sales exceed those of 2018 — and that was followed immediately by a 5.7% year-on-year drop in May. But in a market where the monthly collapse has been as big as 13.3%, relief at September’s performance is understandable.
However, Mike Mabasa, CEO of the National Association of Automobile Manufacturers of SA, urges caution.
“Consumers and businesses will continue to delay purchasing decisions on big items such as new vehicles until there is greater economic stability all around and they are more optimistic about their economic future. Though the economy grew in the second quarter of the year off the first quarter’s very low base, the underlying pace of activity remains weak,” he said.