The new normal for car dealerships: face masks, social distancing and more online and phone sales. Picture: SUPPLIED
The new normal for car dealerships: face masks, social distancing and more online and phone sales. Picture: SUPPLIED

New vehicles started to trickle out of local showrooms in May after the motor industry was allowed to start building and selling cars under relaxed lockdown conditions.

With about half a month of selling time after dealers opened their doors under strict trading risk-adjusted measures, 27,496 new cars, bakkies and trucks were sold last month.

This was 68% lower than May 2019 but a noteworthy improvement from the April 2020 performance, where new-vehicle sales ground almost to a halt due to the Covid-19 hard lockdown which forced the stoppage of all motor manufacturing and sales.

Vehicle export sales, at 10,819 units, last month also registered a big fall of 19,333 units (64.1%) compared to May last year, but an improvement on April 2020 considering that some local vehicle manufacturers, including Ford and Nissan, only commence full production this month.

Vehicle financier WesBank warned that the motor industry should expect to face reduced levels of vehicle sales for the remainder of the year.

“While we were reassured by the levels of demand from consumers and business judged by volumes of applications for finance during May, we shouldn’t expect sales to return to any form of normality for the remainder of the year,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank.

He pointed out that WesBank applications volumes across new and used vehicles were much higher than actual sales, at between 65% and 70% of the levels experienced during May 2019.

“Industry will be reassured by these initial levels of demand, but buying behaviours will inevitably be changing,” says Gaoaketse.

WesBank data indicated an increase in demand for used cars in terms of vehicle applications, he said, showing a trend for consumers to buy down into the used car market to reduce the size of their car repayments.

The 2.5% reduction in the interest rate since lockdown commenced will provide some relief for consumers and provide stimulus for new deals.

In last month’s new-vehicle sales, 11,289 units (87.3%) represented dealer sales, 7.9% were to government, 2.9% to industry corporate fleets and 1.9% to the vehicle rental industry.

The performance of vehicle exports over the course of 2020 remains linked to the duration of the Covid-19 pandemic and its impact on the global economy, says the National Association of Automobile Manufacturers of SA (Naamsa).

“With all the OEMs gearing up for full production from June 1 2020 onwards and with the domestic automotive industry’s major export destinations starting to ease their lockdown restrictions, vehicle export numbers are anticipated to start gaining momentum again,” it said.

Says Naamsa: “New vehicle sales for May 2020 continue to reflect persistent demand weakness due to the impact of the Covid-19 pandemic as consumer and business sentiment remain severely depressed. The motor industry is currently experiencing unchartered conditions given the current unpredictability in these uncertain times.

“New-vehicle sales are generally linked to the strength of the economy and the anticipated extent of the negative annualised GDP growth in the country therefore does not bode well for the industry over the medium term.

“The impact of Covid-19 on the new-vehicle market and when the level of factory output will return to where it was before the lockdown will only become clearer once the entire motor industry becomes fully operational and prepares itself for the ‘new normal’."

Volkswagen was the top-selling brand last month with 2,749 units locally, ahead of Toyota (1,848), Hyundai (1,368), Ford (811), Mercedes-Benz (795) and Isuzu (723).

Following usual trends, the country’s top-selling model was the Toyota Hilux (796 units) ahead of the VW Polo (668), and Polo Vivo (636).

While used car sales in SA during May 2020 mimicked new car sales and were understandably down on 2019, consumers are demonstrating increasing interest in buying a used car.

About 17,000 used cars were sold on AutoTrader in May 2020, about half the number sold in the same month a year ago. Notably however, 37.7-million vehicle searches took place in May 2020 — a 50% jump over the 25.1-million in the same month last year.

“We have to remember that trading resumed halfway through the month and that licensing departments remain closed — so the sales figures are quite encouraging given the circumstances,” says AutoTrader CEO George Mienie.

“The search results indicate pent-up demand, which is great for the economy and could indicate a returning to normal.”

The cumulative value of used car sales in 2020 shows a dramatic — but understandable — decline compared to 2019. A cumulative selling price of R4.8bn was recorded in 2020 on a year-to-date basis — versus R10.2m over the same period in 2019.

The global automotive industry faces a near 20% fall in volume in 2020 due to the impact of Covid-19, with nearly 16-million fewer new-vehicle sales expected than in 2019, according to GlobalData.


Under phased conditions beginning on May 13, dealers were allowed to reopen with a maximum 30% staff complement, the majority of car sales were done remotely via the internet or e-commerce or telephone, and test drives were conducted by appointment only.

Under phase 2 (from May 25 to June 6), all dealerships and used car outlets are operating with up to 60% of employment; limited customers are allowed to enter the dealership under strict hygiene and social distancing conditions in line with the regulations; and remote vehicle sales continue for those potential customers with access to online services.

Under phase 3 (from June 8 until alert level 4 is lifted) all dealerships and used car outlets may operate with up to 100% of employment. On-site customer contact will be allowed, but kept to a minimum while remote vehicle sales are encouraged. Test drives can be arranged on site by appointment only, and under strict hygiene conditions, including fully sanitised cars.

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