New vehicle sales weather the storm of floods and fuel hikes
Local sales grow 2.1% compared to May last year, but bakkie sales take a big hit due to Toyota's flooded factory
Last month’s new vehicle sales in SA weathered the storms of record fuel price hikes, a 0.5% increase in the prime rate, and the continued affects of the KwaZulu-Natal floods.
According to Naamsa, new vehicle sales grew 2.1% during May to 39,177 units compared to the same period last year, with a month-on-month growth of 2,009 units compared to April 2022.
Last month’s sales were led by the passenger car market which increased 13.8% year on year to 27,437 units, but light commercials slumped 22.6% to 9,221 units. The latter was largely caused by the supply shortage of SA’s most popular vehicle, the Hilux bakkie, due to the closure of Toyota’s flood-damaged factory near Durban almost two months ago.
Toyota held on to its market leader position with sales of 6,664 units despite the temporary closure of its plant which has caused stock shortages. Supplies of the locally-produced Hiace Ses’fikile, Fortuner, Corolla Quest and Corolla Cross have also been severely affected as the factory undergoes repair, but imported Toyotas like the Urban Cruiser and Rumion achieved good sales to keep the brand in the top position.
Behind Toyota was Volkswagen with 4,778 sales in May, followed by Suzuki Auto (4,331), Hyundai (3,039), Ford (2,447), Renault (2,442), Nissan (2,299), Kia (1,971), Haval (1,936), Isuzu (1,507) rounding out the top ten.
“New-car buyers who held off purchases during the pandemic over the past two years are now renewing their vehicles thanks to somewhat normalised retail environments,” said Alex Boavida, vice-chair of the National Automobile Dealers’ Association (NADA).
She noted a trend in the age of vehicles being traded in on new ones.
“Historically, the average age of vehicles exchanged for new models is around three or four years in line with normal ownership cycles. In recent months, however, dealers have seen this age increase to five or six years which indicates some pent-up demand during the pandemic is finally being satisfied after delayed renewals,” she said.
“It’s encouraging to see the market performing so well despite the numerous setbacks the motor industry is facing both globally and locally. With interest rate hikes and rising fuel prices, consumers are being hit from all angles with burdens on budgets, but appetite for new cars remains remarkably strong,” continued Boavida.
“Brands offering more affordable product ranges are providing a crutch to the overall industry with aggressive pricing and the ability to deliver thanks to more robust supply levels. Many customers who normally buy in mid and premium segments are now buying downrange, not only to preserve budgets, but because this is where the greatest variety can be found.”
She said the global semiconductor and general parts supply shortages are still wreaking havoc on the industry and suffocating showroom stock levels around the world — particularly in the premium segment. It is difficult to predict when these constraints will ease, but the general industry view is from 2023 onward, she added.
The Suzuki Swift was SA’s best selling passenger car in May with 1,764 units, and the Ford Ranger was the most popular bakkie with 1,548 sales.
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