New car sales data from the National Association of Automobile Manufacturers of South Africa (Naamsa) shows that 36,346 units were sold in April, up 3.6% year on year, while also showing a dramatic month on month decline of 26.2%.
“Irregularity in new vehicle sales numbers continues to contribute to market uncertainty,” said lender Wesbank in a statement.
“It’s important to not read too much into these figures as the overall picture is skewed by the dip in sales observed in April 2017 as a result of the country’s downgrade to junk status at the time,” said Rudolf Mahoney, WesBank’s head of brand and communications.
“As a result, the 3.6% increase in sales in April is not as positive a picture as it may seem,” he said.
Looking at the month to month decline, Wesbank said that this is a result of the stronger sales in March, thanks to consumers opting to avoid an increase in VAT and ad valorem which came into effect on 1 April. “A more practical indication of the market’s performance this year is the year-to-date decline of 2.6%,” Mahoney said.
Passenger cars showed an improvement of 6.4% with 23,928 units sold in April versus 22,490 in the corresponding month last year. Light commercial vehicles, however, were down 1.2% with 10,580 units sold. Dealer sales accounted for 86.6% of the total market, while rental, corporate and government fleets represented 7%, 5.1% and 1.3% respectively.
“It’s encouraging to note that dealer channel sales have been up for the first four months of the year,” said Wesbank’s Mahoney. “The slow performance of the rental segment, particularly over the first three months of the year, has weighed heavily on the overall market performance,” he added.
The three top selling passenger vehicles included: Polo Vivo (2,143), Polo (1,907), and the Grand i10 (1,013), while bakkies continued to do well through the Hilux, with 2,679 units, followed by the Ranger (2,372), and the Isuzu KB (1,071).
New versus used vehicle applicants showed 36,143 and 86,755 respectively in April, while the average value of a new car financed jumped nearly R4,000 over the same period last year, to R300,354 (R296,448).
WesBank’s forecast of 0.75% growth is still possible, but the market will need to perform better going forward, the lender stated. Sales in May should start to normalise thanks to a full sales month and the second half of the year is expected to be more positive following a similar trend as 2017, it said.