The replenishment of car fleets in both the private and public sectors has provided a strong underpin to new vehicle sales in July, though export sales disappointed on the month, says Standard Bank Vehicle and Asset Finance.
National Association of Automobile Manufacturers of SA (Naamsa) statistics yesterday showed new vehicle sales increased 2.6% in July from the same time last year to 47,881 units. This is also well above the 46,663 sales seen in June this year.
The July 2018 new car market at 32,108 units was up 4.3% from July last year, with the car rental industry contributing an estimated 18.8% of new car sales during the month.
Derick de Vries, Head of VAF and fleet management at Standard Bank, says this was largely as a result of fleet companies replacing their fleets, together with incentives from original equipment manufacturers.
“Some rental companies replace their fleets from July through to October, which creates demand and so we will continue to see uptake due to these seasonal factors. Public sector departments are also spending relative to their Budgets and this, in turn, drives demand,” says De Vries.
He adds that original equipment manufacturers continue to subsidize deals by providing incentives from a trading or discount perspective.
More positive business sentiment, meanwhile, is also providing support for the medium and heavy commercial market, according to De Vries.
The July data showed decided increases were recorded for heavy commercial vehicles and medium commercial vehicles, which increased 27.9% and 15.9% when compared with July 2017 data.
Despite the strong momentum shown generally in July, aggregate export vehicle sales at 28,063 vehicles reflected a substantial decline of 6,657 units or a fall of 19.2% compared to the very high base of 34,720 vehicles exported in July last year.