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The National Association of Automobile Manufacturers of South Africa (Naamsa) said aggregate domestic new vehicle sales “continued the declining trend” into February 2020.
Naamsa confirmed aggregate domestic sales at 43 485 units showed a decline of 320 units or 0,7 percent from the 43 805 vehicles sold in February 2019. Export sales at 30 832 units, meanwhile, registered a fall of 2 843 units or a decline of 8,4 percent compared with the 33 675 vehicles exported in February last year.
Overall, out of the total reported industry sales of 43 485 vehicles, an estimated 34 956 units or 80,4 percent represented dealer sales, an estimated 11,4 percent represented sales to the vehicle rental industry, 4,3 percent to government and 3,9 percent to industry corporate fleets.
The February 2020 new passenger car market had registered an increase of 2 098 cars or a gain of 7,6 percent to 29 665 units compared with the 27 567 new cars sold in February 2019, said Naamsa. The car rental industry’s contribution accounted for a sizeable 16,0 percent of new car sales in February 2020.
Domestic sales of new light commercial vehicles, bakkies and mini-buses at 11 625 units during February 2020 recorded a “substantial decline” of 2 497 units or a fall of 17,7 percent from the 14 122 light commercial vehicles sold during the corresponding month last year.
Sales in the medium- and heavy truck segments of the industry performed “relatively well”, said Naamsa, and at 686 units and 1 509 units respectively, reflected an increase of 25 vehicles or a gain of 3,8 percent in the case of medium commercial vehicles, and, in the case of heavy trucks and buses an increase of 54 vehicles or a gain of 3,7 percent compared with the corresponding month last year.
February 2020 export sales performed weaker with export sales at 30 832 vehicles reflecting a decline of 2 843 units or a fall of 8,4 percent compared with the 33 675 vehicles exported in the same month last year. The momentum of vehicle exports over the course of 2020, however, should increase further, said Naamsa, and industry export sales for the year could reach around 390 000 units compared with the record 387 125 vehicles exported last year, it added.
Naamsa pointed out new vehicle sales continue to mirror the deteriorating economic outlook in the country. The unexpected tax relief for individual taxpayers in the Budget 2020, aimed at not further slowing down the already sluggish economy, was welcomed by the Association. However, the CO2 emissions tax increase and the lowering of the threshold on passenger cars as well as the increase in the tax on double-cab bakkies effectively mean a price increase on vehicles during a sustained period of market decline, especially now also covering smaller vehicles comprising the major portion of sales in the domestic market.
Eskom’s announcement of a high likelihood of load-shedding during the next 18 months contributed to the further deterioration in sentiment regarding business conditions going forward. This was confirmed by the ABSA purchasing managers index (PMI) tracking expected business conditions in six months’ time, which fell to its lowest level since 2009.
Although vehicle exports declined in February, Naamsa anticipated the upward momentum on the export side would continue into 2020.
“The strong growth of vehicle exports in recent years continues to underpin the key role that the South African automotive industry plays in the country’s economy, despite the challenges,” it said.
That said, the impact of the coronavirus outbreak and potential to impact supply chains and disrupt manufacturing operations around the world are increasing daily and developments are monitored closely, Naamsa said.
The Association furthermore pointed out BMW South Africa and Mercedes-Benz SA would, “effective immediately, report sales information quarterly”.
Original article from Car