Reduced bakkie demand a drag on new-vehicle sales
Farmers and the government cut back because of drought and budget constraints
Reduced demand for bakkies from the government and the agricultural sector dragged down the overall new-vehicle market in November.
Figures released on Monday by the department of trade & industry showed that aggregate sales across all vehicle categories fell 5.8% in November compared with November 2018, to 44,738.
Bakkies accounted almost single-handedly for the decline. Sales of light commercial vehicles, which also include vans and minibus taxis, fell 22.1% to 10,679.
Mike Mabasa, CEO of the National Association of Automobile Manufacturers of SA (Naamsa), said budget constraints at national and local government had cut into sales, while difficult farming conditions, including drought, had caused farmers to cut back on purchases.
WesBank’s Lebogang Gaoaketse said: “The poor performance of bakkie sales is concerning, considering they are among the highest volume-selling nameplates in the market and also because they are locally manufactured.”
Sales of heavier trucks also fell in November but by much smaller margins.
Car sales, which have lagged the overall market for most of this year, grew 1.3% to 31,444. Combined car sales for the 11 months to November were down 3.6% to 326,460. The total market, including commercial vehicles, was down 3.4%, to 494,996.
Without the vehicle rental market, which accounted for 15.9% of the new-vehicle market, or almost one in six sales, the November picture would have been even worse. Mabasa expects no immediate sales improvement because of low economic growth and limited household disposable income.
“Conditions in the domestic new-vehicle market are expected to remain under pressure over the short to medium term,” he said.
Gaoaketse said that despite consumer inflation being within the government’s target range, “new-car price inflation remains very real within an affordability-driven marketplace”.
Vehicle exports, which have been running rampant most of this year, hesitated in November, retreating 0.9% to 35,271. However, it seems certain that the industry will beat its 400,000 target for the year. By end-November, 374,215 vehicles had been shipped to overseas customers. That already beats the previous full-year export record of 351,154.