DAVID FURLONGER: Swiftly, swiftly, catchee Polo?
New-vehicle market digs in for an ‘erratic’ few months
Which came first, the chicken or the egg? Or, in this case, the Swift or the Polo?
Figures published this week state that the little Suzuki Swift outsold all its car competitors in April. Its 1,621 total — of which almost 40% went to car rental companies — gave it a 74 advantage over the Volkswagen (VW) Polo Vivo and exactly 100 over the Toyota Corolla Cross.
According to Naamsa/the Automotive Business Council, which released the numbers, fourth place was occupied by the hatchback version of the “real” Polo (the Vivo derivative is based on a pre-2018 model), which sold 1,320 units. Its twin, the Polo sedan, languished in 15th place, with 558 sales.
The hatch and sedan may be styled differently, but are they really different cars? Should double-cab bakkies be counted differently from single-cabs? Motor companies traditionally lump together model variants for volume bragging rights.
WesBank prefers it that way. In its analysis of the April figures, the finance house has combined Polo hatch and sedan sales figures into a single number — 1,878 — and declared Polo the runaway winner of the car market.
Of course, this being SA, neither car can claim outright market victory. As so often, that boast belongs to Toyota’s Hilux bakkie, which sold 2,788 units in April. That leadership will come under pressure later this year with the launch of Ford’s next-generation Ranger bakkie.
Whether or not Swift is top of the car heap, Suzuki has plenty to celebrate. April was the fourth successive month in which it had record sales. At 3,696, it was third in the car market, behind only Toyota and VW.
While Suzuki was celebrating, the industry as a whole breathed a sigh of relief. Total new-vehicle sales growth in April may have slowed dramatically from previous months, but that was to be expected.
Public holidays and long weekends created a stop-start marketing environment. More importantly, devastating floods brought Durban harbour, the motor industry’s main import-export hub, to a temporary halt, damaged rail links to the rest of the country, and forced Durban-based Toyota SA and some components suppliers to suspend production. Toyota also reportedly had to scrap thousands of completed vehicles damaged by floodwater.
The effects of the floods are likely to felt in the market for some time to come.
As SA’s automotive volumes are predominantly driven by export demand, the industry is highly vulnerable to changes in demand in export marketsMikel Mabasa
Naamsa reports that the industry sold 37,107 new cars and commercial vehicles in April. That was almost 30% fewer than March’s 50,465 but 4.3% better than the 35,591 of April 2021.
It was the latter comparison that brought hope as it continued the industry’s post-Covid sales recovery, Year-on-year growth in the previous three months was 17.9%. April’s slower pace brought the rolling total to 173,299 — 14.9% more than the 151,022 after four months of 2021. Naamsa CEO Mikel Mabasa is grateful that the market remains “in positive territory”.
WesBank marketing head Lebogang Gaoaketse says no-one should be “dismayed” at the sudden drop in sales. “Volatility is the only constant within the market, especially impacted by erratic supply beyond manufacturers’ control. April’s volumes remain on the high end of last year’s performance and therefore shouldn’t be cause for any alarm.”
Erratic supply? Besides the local floods, there’s the small matter of Covid, which has plunged huge swathes of China into lockdown and disrupted the manufacture of vehicles and components; the continuing shortage of semiconductors, a core part of automotive technology; and the war in Ukraine. All these are causing vehicle assembly plants around the world to cut production and disrupting vehicle availability and distribution.
No wonder National Automobile Dealers Association head Mark Dommisse says SA’s April sales were achieved “against all odds”. Gaoaketse says: “The market is expected to continue its erratic recovery throughout the year.”
Car sales remain the market’s mainstay. They improved by 12.9% from the previous April, from 22,729 to 25,653. For the year so far, the aggregate car total is 119,297, which is 22.7% ahead of last year’s 97,204.
Sales of light commercial vehicles, mainly bakkies and minibuses, fell 11.9% in April from a year earlier and are 0.6% behind for the year so far. Heavy trucks, 29.6% ahead in the first four months, are the only bright spot in the commercial vehicle sector.
New-vehicle exports grew 16% in April from a year earlier, from 26,540 to 30,788. That lifted the four-months aggregate to 119,151 — 2.7% ahead of 2021. Here, too, further growth is expected but not confidently so — a concern for a local industry that exports over 60% of production.
Mabasa says: “The economic damage from the conflict between Russia and the Ukraine will contribute to a significant slowdown in global growth in 2022 and add to inflation. As SA’s automotive volumes are predominantly driven by export demand, the industry is highly vulnerable to changes in demand in export markets, in particular Europe and the UK.”
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