Exports rise but SA vehicle sales slump
Domestic sales continued to decline – largely due to weakened economy
Export vehicle sales showed significant improvement year on-year for March 2019, but domestic sales continued to decline – largely due to the weakened economy and increased pressure on disposable income.
The declining trend in the new vehicle market since the beginning of 2019 continued in March, according to the National Association of Automobile Manufacturers of SA (Naamsa).
Naamsa said load-shedding, higher fuel and food costs as well as a weaker exchange rate continued to further decrease already low levels of business and consumer confidence, weighing on vehicle demand.
“Lower passenger car sales, however, have again been offset by fairly strong commercial vehicle sales numbers.”
Aggregate domestic sales were at 47,718 units, showing a decrease of 1,512 units (-3.1%) compared with the 49,230 vehicles sold in March 2018.
But export sales had shown strong growth at 37,296 units, reflecting an increase of 7,135 units (+23.7%), compared with the 30,161 vehicles exported in the same month in 2018.
“The momentum of vehicle exports over the course of 2019 should increase further and industry export sales for the year could reach close to 400,000 units compared with the record 351,139 vehicles exported last year,” Naamsa said.
Overall, out of the total reported industry sales of 47,718 vehicles, 41,235 (86.4%) represented dealer sales, 3,149 (6.6%) represented the vehicle rental industry, 2,052 (4.3%) to government and 1,288 (2.7%) to industry corporate fleets.
“The new-vehicle market continues to perform within our expectations of a downward trend, as consumers find themselves increasingly under pressure,” National Automobile Dealers’ Association (Nada) chair Mark Dommisse said.
Nada represents franchised car and commercial vehicle retailers in SA.
“Many dealer principals within the Nada network have commented on noticeably slower foot traffic on showroom floors.
“This is clearly a sign of economic pressures on household budgets,” he said.
The March new passenger car market had, for the third consecutive month, been weak and, at 30,348 units, showed a decline of 1,805 (-5.6%) compared with the 32,153 new cars sold in March 2018.
“The new car sales figures confirmed that consumers generally were under pressure and lacked a willingness to invest and purchase,” Naamsa said.
SA’s top five best-selling new vehicles for March 2019 were:
1 Toyota at 11,795 units;
2 VWSA at 6,754 units;
3 Nissan at 5,417 units;
4 Ford at 4,961 units, and
5 Hyundai at 2,885 units.
Mercedes-Benz had the largest number of exports at 11,837 units, with VWSA coming in second at 9,571 units.
Vehicles and components manufactured in SA are exported to about 149 international markets.
Ford Motor Company SA said on Tuesday it would be expanding its export operations by adopting a multi-port strategy, with the first shipment of 1,000 locally assembled Ford Rangers from Port Elizabeth to markets in Europe.
“We are experiencing unprecedented demand for the Ford Ranger around the world, and have invested over R3bn in the recent expansion of production capacity in our SA operations to fulfil these orders,” FMSA vice-president of operations Ockert Berry said.
Naamsa said the SA Reserve Bank’s decision not to increase interest rates as well as Moody’s decision to postpone its review of SA’s credit rating were a welcome reprieve.