03 Aug July new-car sales in mixed performance
New-vehicle sales continued their 2023 contortions in July, performing better than expected in some sectors and disappointing utterly in others.
Exports, particularly, continued their extreme acrobatics. This time round, the impetus was definitely up.
The local motor industry shipped 37,064 cars and bakkies to markets around the world in July. That was a 47.3% improvement on the 25,168 of July 2022. This was due mainly to a ridiculous 242.7% increase in bakkie exports — courtesy, in part, of the fact that in July last year, Toyota SA was not producing Hiluxes because of flood damage to its Durban assembly plant.
Figures released on Tuesday by Naamsa/the Automotive Business Council revealed that after seven months of 2023, aggregate SA vehicle exports totalled 209,900 — 10% more than the 190,871 at the same stage last year.
Bakkies are also powering growth in the domestic market — aided and abetted by minibus taxis, which were also almost out of stock in mid-2022 because of Toyota’s woes. In July, light commercial vehicles, which encompass bakkies and taxis, outsold July 2022 by 32.6%. After seven months of the year, they were 21.9% ahead. Heavier trucks are also supporting market growth.
Cars, by contrast, continue to have a tough time. Sales in July fell by 9.7% from a year earlier, from 30,824 to 27,839. After seven months of 2023, they trailed last year by 2.5%.
Total domestic sales of cars and commercial vehicles, including trucks, totalled 43,389 new units in July — 1.3% more than the 42,822 of a year earlier. For the year to date, the aggregate domestic market of 309,359 vehicles is 4.4% better than the 296,362 of January-July 2022.
Brandon Cohen, new chair of the National Automobile Dealers’ Association, rued the fact that franchised dealers’ share of overall sales was below usual levels, at 81.8%, but welcomed strong demand from the vehicle-rental industry, which accounted for 14.1%. Corporate fleets took up 2.3% and government fleets 1.7%.
He was also concerned that high levels of consumer interest on websites and digital platforms were not translating into actual sales.
That is not surprising, in view of research by WesBank, marketing head Lebo Gaoaketse said the average value of debt financed by WesBank this year had increased at more than twice the rate of inflation. “There is only so much affordability consumers can find in the new vehicle market by opting for lower-priced alternatives,” he said. “The base cost of entry is now at a level that begins to make an impact on the type of customer the industry can attract.”
Naamsa CEO Mikel Mabasa, however, remained optimistic for improved conditions for the rest of 2023. He was encouraged by the Reserve Bank’s decision not to raise the prime lending rate again in July.
He said this, plus reductions in the consumer price index, inflation and the fuel-price index, “bode well for the car market as the second-largest household investment cost for many South African consumers”.
Article sourced from David Furlonger: https://www.businesslive.co.za/bd/economy/2023-08-01-july-new-car-sales-in-mixed-performance/