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NADA Comment: South African vehicle sales change up a gear

NADA Comment: South African vehicle sales change up a gear

“Stronger retail sales in the South African vehicle market in March are most encouraging, and this year may be better than expected for the local motor industry,” commented Mark Dommisse, Chairperson of the National Automobile Dealers’ Association (NADA).

“It is evident that the delayed replacement cycle is starting to catch up, helped by interest rates remaining low. The used vehicle market is also strong, which is good for the overall health of all sectors of the industry. Two months after a semi-hard lockdown, consumer confidence is improving. Potential buyers were wary in January, cautious in February and, now that the second wave has passed, and the country’s economy is stabilising, people are looking to buy new vehicles again.

“The rate at which the commercial vehicle market is growing is also good news, as this signifies improvements in the general economy with the promise of an increasing number of infrastructure projects. This project pipeline will certainly boost the all-important commercial sector of the market,” added Dommisse.

“We cannot accurately compare sales in March 2021 with those in the same month last year. In March 2020 sales were heavily impacted by trepidation about impending restrictions and the Level 5 hard lockdown which was announced on March 26.”

Sales reported by Naamsa last month totalled 44 217 units, which reflected a substantial 31.8% increase over March 2020. An estimated 85% of the total represented retail sales through dealer channels. The rental industry, which is belatedly re-fleeting after cutting back drastically on fleets in 2020, took up 8.7%. Rental sales accounted for 12.3% of the passenger segment in March. Government took 3.7% of total sales and corporate fleets accounted for the remaining 2.6%.

At 27 330 units the passenger car market was up 23.4% on sales in March last year. Domestic sales of commercial vehicles are also increasing, with light commercial vehicles improving by a substantial 52.4%, medium truck sales by 11.6% and heavy trucks and buses up 35.2% compared to the corresponding month last year.

“Looking ahead we believe there will continue to be a shortage of certain new models, with an ongoing global shortage of semi-conductors, or computer chips. Hefty increases in fuel prices coming next week, will be another factor on vehicle sales going forward as this puts more strain on household budgets,” added Dommisse.

“Much will depend on the effect of the COVID-19 pandemic which is still negatively impacting many of the countries that supply built-up vehicles and components to South Africa,” concluded the NADA Chairperson.

NADA is a proud constituent association of the Retail Motor Industry Organisation (RMI).