Decline in vehicle sales continues in September
Commenting on the new vehicle sales statistics for the month of September, 2016 – released today for public consumption on the website of the Department of Trade & Industry – the Association commented that current conditions in the automotive industry reflected sharp falls in domestic new vehicle sales. The recession in the domestic new vehicle market had accelerated significantly during September, 2016 with all major segments reflecting double digit or near double digit declines. Given the present difficult economic environment in South Africa, the negative trend was expected to continue over the medium term. Surprisingly, export sales of new motor vehicles had also reflected a year on year decline.
September, 2016 aggregate new vehicle sales at 47 399 units had registered a substantial decline of 7 904 vehicles or a fall of 14.3% compared to the 55 303 vehicles sold in September last year. Aggregate industry export sales at 32 876 vehicles for September, 2016 reflected, somewhat surprisingly, a decline of 2 278 vehicles or a fall of 6.5% compared to the 35 154 vehicles exported in September last year.
Overall, out of the total reported Industry sales of 47 399 vehicles, an estimated 38 342 units or 80.9% represented dealer sales, 14.3% represented sales to the vehicle rental industry, 3.4% represented industry corporate fleet sales and 1.4% sales to government.
The consumer dependent new car market had remained under severe pressure during September, 2016 and at 31 957 units reflected a decline of 5 368 cars or a fall of 14.4% compared to the 37 325 new cars sold in September last year. This was again despite a strong contribution by the car rental industry which had accounted for 19.9% of new cars sold during the month. Margins at franchise dealer level remained under severe pressure.
Domestic sales of industry new light commercial vehicles, bakkies and mini buses at 12 879 units during September, 2016 had also turned sharply weaker reflecting a decline of 2 243 units or a fall of 14.8% compared to the 15 122 light commercial vehicles sold during the corresponding month last year.
Sales of vehicles in the medium and heavy truck segments of the Industry at 783 units and 1 780 units, respectively, had also registered substantial falls and, in the case of medium commercial vehicles, reflected a decline of 77 units or 9.0% and in the case of heavy trucks and buses, a decline of 216 vehicles or a fall of 10.8% compared to the corresponding month last year.
Industry new vehicle exports during September, 2016 had registered a decline of 2 278 vehicles or a fall of 6.5% compared to the high base of 35 154 vehicles exported in September last year (which represented the record for vehicle exports in a single month). The momentum of new vehicle exports was still anticipated to improve further over the balance of 2016. For the year and into 2017, new vehicle exports should contribute positively to South Africa’s current account of the balance of payments reinforced by lower vehicle imports on the back of declines in the domestic market.
Domestically, the short to medium term outlook remained unfavorable. Double digit new vehicle price increases, low levels of consumer and business confidence and relatively high interest rates would continue to pressurize sales of new motor vehicles, particularly new cars.
The lower levels of new vehicle sales represented a reflection of current difficult economic conditions in South Africa. One key economic indicator which provided some basis for optimism was the reassuring recovery in South Africa’s Purchasing Manager’s Index in September, 2016 which had recorded an impressive rise of 3.2 points to 49.5 in September – just below the key benchmark of 50. Other major international Purchasing Manager’s indices had also registered welcome improvement.
Also view:
Vehicle Finance, Car Insurance and Road Safety
Buying and Selling a Vehicle – Informed decisions and the Vehicle Retailer
Vehicle Buying, Auctions and the Auction Facilitator
Related Posts
« Man hit-and-killed by car on Shamrock Road in Benoni. Pedestrian critical after collision in Strubens Valley, west of Johannesburg. »
