Naamsa: New car sales revving


Naamsa: New car sales revving to best sign of recovery yet

The data from Naamsa showed that new vehicle sales continued to increase for the fifth consecutive month.

Naamsa: New car sales revving


New vehicle sales recorded their best post-lockdown performance in November, providing positive signs of a slow rehabilitation of the country’s motor industry, according to sales data from the National Association of Automobile Manufacturers of South Africa (Naamsa).

And although the overall new car sales market is down 30.6% year-to-date, November’s figures of 39,315 new units sold shows signs of resurgent consumer demand and relief for motor retailers as volumes continue to increase, Naamsa said.

Big news, according to Naamsa, was the 5.3% growth in Light Commercial Vehicle (LCV) sales to 11,243 units. This is a significant 1,590 more units than October and is the first positive growth sales number since lockdown began.

Sales climbing

The data from Naamsa showed that vehicle sales continued to increase for the fifth consecutive month. Compared with October 2020, 563 more vehicles were sold in November 2020.

A total of 39,315 vehicles were sold in stark contrast to November 2019 where 44,670 vehicles were sold. This represents an annual decline of 12% which is the closest the market has come to last year’s sales figures since March 2020.

Top-Selling Car Brands in South Africa for November 2020

  1. Toyota – 9 441 units
  2. Volkswagen – 6 950 units 
  3. Ford – 3 895 units 
  4. Nissan – 2 744 units
  5. Hyundai – 2 609 units

The increase in market performance was mirrored by the ongoing growth in consumer demand, as measured by applications at WesBank.

“Generally, we have recovered to about 70% of pre-COVID-19 volumes,” said Lebogang Gaoaketse, WesBank Vehicle and Asset Finance head of marketing and communication. 

“While it would be unrealistic to expect the market to return to 100% in the short to medium-term, the industry has adapted quickly to the new levels of demand to remain sustainable and continue contributing towards economic recovery.”

Hybrid work contracts impact sales

WesBank CEO, Chris de Kock says new hybrid working arrangements have reduced the demand for consumers to own cars. 

“For those who do, it is likely that their annual mileage will reduce considerably, increasing the time between replacement cycles. The South African economy will simply not be able to support a market of 500,000 vehicles per year.”

Passenger car sales were 18,1% lower than November 2019, recording 25,707 unit sales.

This is 5,696 units less than November last year and 989 units less than last month, potentially indicating shifts in the market in terms of demand.

Dealers will have been relieved to only see a 5,9% decline in consumer demand in the sector as consumers continue to show renewed appetite for vehicle purchases, Naamsa said.

Top-Selling Vehicles in South Africa for November 2020

  1. Toyota Hilux – 2 913 units
  2. VW Polo Vivo – 2 234 units
  3. Ford Ranger – 2 100 units
  4. VW Polo – 1 815 units
  5. Toyota Fortuner – 1 488 units

The affordability factor

De Kock said that the shift in market demand is the result of two significant trends, both centred around affordability. 

“The evidence of this can be seen in the market growth of the new car segment offering lower priced vehicles where customers seem willing to substitute high profile brands for more practical and affordable options.”

“The other trend is the shift towards the used car market, again driven mostly by the buydown effect,” said De Kock.

Year-to-date sales reached 343,276 units at the end of November, down 30,6% on the same period last year.

“The low-interest rate environment is expected to stay for quite some time, allowing consumers an ideal opportunity to combat affordability and many are taking the opportunity to fix their rates in their finance agreements,” says Gaoaketse. 

“A vehicle remains a big-ticket purchase consideration for any household budget and is consequently a key indication of confidence in the market. November sales show a more positive picture of that confidence slowly returning.”

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