Commenting on the new vehicle sales statistics for the month of October, 2017 NAAMSA said market had registered further encouraging gains led by a strong performance in the new car segment.
Commenting on the new vehicle sales statistics for the month of October, 2017 – released for public consumption on the website of the Department of Trade & Industry – the Association said that, for the fifth month in succession, aggregate domestic new vehicle sales had recorded gains. The new vehicle market had registered further encouraging gains led by a strong performance in the new car segment.
The improvement was despite the continued difficult economic environment compounded by political and economic policy uncertainty.
New vehicle exports had been negatively affected by the impact of the recent massive storm on Durban Port operations and on production volumes at the Toyota Durban Plant. In the event, October 2017 aggregate new vehicle sales at 51 037 units had increased by 2 255 units or
4.6% from the 48 782 vehicles sold in October last year. October, 2017 export sales at 28 229 vehicles had registered a decline of 2 544 units or a fall of 8.3% compared to the 30 773 vehicles exported in October last year.
Overall, out of the total reported industry sales of 51 037 vehicles, an estimated 38 309 units or 75.1% represented dealer sales, an estimated 18.9% represented sales to the vehicle rental Industry, 3.1% to Industry corporate fleets and 2.9% to government. The contribution by the car rental sector to sales was increasingly difficult to determine since four companies did not report sales by channel.
The October, 2017 new car market had reflected further upward momentum and at 35 316 units had recorded a gain of 2 594 cars or an improvement of 7.9% compared to the 32 722 new cars sold in October last year. The car rental industry had accounted for an estimated 26.1% of new car sales in October, 2017.
Domestic sales of industry new light commercial vehicles, bakkies and mini buses at 13 376 units during October, 2017 reflected a fall of 227 vehicles or a decline of 1.7% compared to the 13 603 light commercial vehicles sold during the corresponding month last year. This was on top of the improvement in light commercial vehicle sales in recent months.
The medium and heavy truck segments of the Industry reflected marginal declines and at 668 units and 1 677 units, respectively, had recorded a fall of 22 vehicles or a decline of 3.2%, in the case of medium commercial vehicles, and, in the case of heavy trucks and buses, a decline of 90 vehicles or a fall of 5.1% - compared to the corresponding month last year. The figures continued to reflect generally poor
investment sentiment in the economy.
The decline in October vehicle exports was attributable in part to the impact of the recent massive storm which had adversely affected Durban Port operations and which had also contributed to a loss of export production at the Toyota Durban Plant. Hopefully, new vehicle exports would show an improvement in the last two months of calendar 2017 on the back of the normalisation of Durban Port operations and recovery of production by Toyota SA.
Over the past five months, the domestic automotive market segments had held up relatively well despite the challenging economic environment. Sharply reduced new vehicle pricing, at an annualized quarter 3 2017 rate of 3.1% according to TransUnion research down from 9.9% in the third quarter of 2016, the July, 2017 reduction in interest rates and in particular continued highly attractive sales incentives as well
as continued above average demand by car rental companies – had all contributed to improved local sales momentum.
However, the impact of the Medium Term Budget Policy Statement and the subsequent sharply lower exchange rate came too late in October to affect the sales figures. Overall, however, a year on year improvement of around 1.5% for 2017 remained possible. In the case of vehicle
exports, continued positive global economic growth trends should support new vehicle exports over the medium to long term.
Issued by: NAAMSA