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The South African new car industry appears to be picking up according to figures recently released by the National Automobile Association of South Africa (NAAMSA). Sales for April 2019 , according to NAAMSA, rose 0.7 per cent compared to April 2018. This is the first increase in sales this year and brings a slowly declining trend in sales to a halt ahead of this May’s elections.
However, the April figures fell short of sales record for March and stakeholders are not convinced yet, with some warning that all may not be well , at least, for now.
Reacting to the April sales figures, WesBank Executive Head of Motor, Ghana Msibi, warned that “While the market will no doubt be reassured by this good news, it should not grasp at any major turn-around just yet,” saying, “The April market total of 36,794 units was still way behind March sales of 47,687.”
While April sales are traditionally slower due to fewer selling days and the Easter holiday season, the marginal increase remains valid compared to similar trading conditions last year.
“Dealers, in particular, will have found some solace in the satisfaction of a 1.3 per cent increase in sales through the showroom floor and the market swung in favour of passenger cars,” Msibi said.
Passenger car sales rose 3.9 per cent to 24,989 units while Light Commercial Vehicle (LCV) sales declined 8.1 per cent to 9,810 sales during April compared to the same month last year. Dealers accounted for a wider spread in the split of sales with passenger cars increasing 6.9 per cent and LCVs down 11.5 per cent. This is in contrast to recent dealer channel performance where LCVs have out-performed passenger cars.
“Household budgets are continuing to remain under pressure and consecutive months of petrol price increases will no doubt begin to take their toll,” said Msibi. “Combined with the natural uncertainty ahead of May elections, the April sales performance becomes even more reassuring as these conditions could easily have resulted in the continuing decline trend.”
WesBank had forecast first half sales to be slow, improving in the second half.
“This April stability could be a sign of an earlier onset of improved trading, but it is early days to label it as such – the market can remain hopeful,” said Msibi.
Total market sales year-to-date are down 3.7 per cent compared to 2018, passenger cars accounting for a 6.2 per cent decline while LCVs are up 0.7 per cent.
“The April sales performance remains good news for the industry. We expect May sales to remain under pressure due to the elections and given whatever certainty from their results, South Africans will begin making informed vehicle purchase decisions during the second half,” Msibi maintained.
