The cars South Africans are buying right now

South Africa’s vehicle market remains buoyant despite economic headwinds, with the positive growth in heavy commercial and passenger vehicles in June a sign of steady consumer and corporate demand.

This follows the release of National Association of Automobile Manufacturers of SA (Naamsa) statistics on Monday (2 July) showing new vehicle sales up 3% from this time last year to 46,768 – well above the 42,950 sales seen in May.

According to Cyril Zhungu, head of dealer automotive retail at Standard Bank, growth was driven by passenger vehicles, which registered sales of 29,886 (up 4.4% from June 2017) and heavy commercial vehicle sales of 553 (18.9%) from the year before.

Within the passenger segment, most sales appear to have been supported by new models and on-going manufacturer sales incentives, he said.

“While the sales in the year to date are a little behind the curve, the data this month signals a steady trend, with the main support levels coming from the passenger and commercial markets. The expectation for the second half of the year remains positive, with an expectation of growth to remain around 2%,” he said.

He added that there is a clear on-going strong demand pattern through the dealer channel to the general buying public, represented by the fact that over 82.5% of vehicle sales are through dealers.

Budgeting pressures

According to Standard Bank’s application numbers, continued growth in applications was noted, resulting in positive vehicle replacement trends by customers.

Zhungu added that June typically represents a quarterly close out period for most retailers – which is often supported by on-going manufacturers’ sales incentives.

“Despite the positive outcome of the vehicle sales numbers in June, there appears to be some motoring budgeting pressures expected from recent increases in fuel prices,” he said.

“Such upward price adjustments are not expected to significantly influence purchasing behaviour, but possibly shift buying behaviour towards smaller segments, which appears to still comprise most of the passenger car sales as reflected in the June numbers.

“The impact to the South African market is unfortunately beyond its control given a tricky combination of a weak rand against the dollar as well as the rising oil price,” he said.

Standard Bank’s data showed that the new and used ratio remains the same with more customers seeking to purchase used vehicles despite the lower vehicle price inflation on new vehicle.

“There is no doubt, however, that consumers will continue to take advantage of the lower inflation in new vehicle pricing to replace their vehicles,” said Zhungu.

Below are the 10 bestselling passenger cars for June 2018, according to Naamsa:

Rank Car Sold
1 Volkswagen Polo Vivo 2 285
2 Volkswagen Polo 1 844
3 Toyota Corolla/Auris/Quest 1 226
4 Toyota Fortuner 1 190
5 Renault Kwid 1 023
6 Toyota Etios 977
7 Renault Sandero 937
8 Hyundai Grand i10 933
9 Toyota Yaris 885
10 Kia Picanto 764

Read: Here’s what a R1 million bakkie looks like

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