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NAAMSA comment on the November, 2017 industry new vehicle sales statistics

NAAMSA comment on the November, 2017 industry new vehicle sales statistics

Commenting on the new vehicle sales statistics for the month of November, 2017 – released today for public consumption via the website of the Department of Trade & Industry – the Association said that, on the back of a further positive performance of the new car market, aggregate domestic new vehicle sales had recorded an improvement for the sixth month in succession. Led by a strong performance in the new car segment, the overall market had registered encouraging gains of 7.2% - despite the continued difficult economic environment characterised by political and economic policy uncertainty. For the second month in succession, new vehicle exports had been affected by the impact of recent inclement weather on Durban Port operations as well as the model runout and impending new model introduction of the Volkswagen Polo range.

In the event, November 2017 aggregate new vehicle sales at 49 754 units had increased by 3 357 units or 7.2% from the 46 397 vehicles sold in November last year. November, 2017 export sales at 27 178 vehicles had registered a substantial decline of 4 315 units or a fall of 13.7% compared to the 31 493 vehicles exported in November last year.

Overall, out of the total reported Industry sales of 49 754 vehicles, an estimated 38 986 units or 78.4% represented dealer sales, an estimated 14.0% represented sales to the vehicle rental Industry, 4.6% to government and 3.0% to industry corporate fleets. The contribution by the car rental sector to sales was difficult to determine exactly since four companies presently did not report sales by channel.

Supported by attractive sales incentives, the November, 2017 new car market had shown upward momentum and at 32 821 units had recorded a gain of 4 614 cars or an improvement of 16.4% compared to the 28 207 new cars sold in November last year. The car rental Industry had again made a major contribution accounting for about 19.8% of new car sales in November, 2017 – meaning that one in every five new cars sold during the month represented a car rental sale.

Weighed down by poor investment sentiment and the prevailing difficult business environment, domestic sales of new light commercial vehicles, bakkies and mini buses at 14 587 units during November, 2017 reflected a fall of 1 160 vehicles or a decline of 7.4% compared to the 15 747 light commercial vehicles sold during the corresponding month last year. However, light commercials for November did record an improvement on sales of the previous month in October, 2017.

Sales in the low volume medium and heavy truck segments of the Industry reflected a mixed performance and at 688 units and 1 658 units, respectively, had recorded a fall of 128 vehicles or a decline of 15.7%, in the case of medium commercial vehicles, and, in the case of heavy trucks and buses, an improvement of 31 vehicles or a gain of 1.9% - compared to the corresponding month last year. The figures continued to reflect subdued investment sentiment in the economy.

Based on the latest export figures, it was clear that industry export numbers for 2017 would come in below original expectations. The decline in November vehicle exports could be attributed to the lagged effect of inclement weather which had affected Durban Port operations and production at the Durban Toyota SA Plant. Additionally, the Volkswagen SA Plant was gearing up for the production of new Polo models to be launched early next year.   The model runout of the previous Polo had contributed to lower export units.

Over the past six months, the domestic car market had performed relatively positively in a challenging economic environment. The major contributing factors had been the continuation of highly attractive sales incentives, sharply lower new vehicle price inflation, stable interest rates and the ongoing above average demand by car rental companies. Overall, a year on year improvement in aggregate domestic sales of around 2.0% for 2017 was anticipated. Going into 2018 new vehicle exports were expected to recover on the back of positive global economic growth prospects.

NAAMSA expects to be able to release the December, 2017 and calendar 2017 sales figures on 9th January, 2018.

Best wishes for the festive season and the New Year.

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