Vehicle exports in October fell 30 percent to 23 685 units in October compared with the same month last year, after the industry was affected by the three-week strike in the steel and engineering sector and an acute load shedding programme, but local vehicle sales continued to improve, albeit slower.
Naamsa, the Automotive Business Council said yesterday that domestic new vehicle sales in October at 41 035 units increased by 6.1 percent from those sold in October last year.
Stock shortages continued to thwart South Africa’s new vehicle market during October, but the market continued to show a robust performance, despite volumes being lower than September,” said Wesbank head of marketing and communication Lebogang Gaoaketse.
The new vehicle market appeared to be recovering well, with demand outstripping supply constraints. “The second half of the year has performed strongly since mid-year lockdown restrictions, trading above 40 000 units a month for the past three months,” he said.
Overall, out of the total reported industry sales, 82.5 percent represented dealer sales, an estimated 14 percent were sales to the vehicle rental industry, 2.1 percent to the government, and 1.4 percent to industry corporate fleets.
The October 2021 new passenger car market at 27.496 units represented a 3.1 percent gain compared to the 26 681 new cars sold in October 2020, supported by the car rental industry, which bought 18.2 percent of the cars sold in the month.
Domestic new light commercial vehicles, bakkies and mini-buses at 11.188 units increased by 1 535 units, or 15.9 percent, from the 9 653 light commercial vehicles sold in October a year before.
Year-to-date, vehicle exports were still 12 percent ahead of the same period last year.
Naamsa said the sigh of relief with the country’s move to adjusted alert level 1 from 1 October 2021 was short-lived due to adverse events during the month, including the three-week strike as well as businesses having to endure several days of rolling blackouts.
In addition to Covid-19 supply chain disruptions resulting vessel and container shortages consequently causing higher logistics costs, also remained an area of concern impacting on the ability of the industry to plan and grow.
Vehicle exports had continued their four-month downward trajectory during the month which could be linked to the three-week strike in the steel and engineering sector impacting on vehicle production as well as new model introductions normally taking time to ramp up to full production.
On the upside, the domestic automotive industry would benefit from the strong rebound in global economic activity and the favourable conditions abroad.
Neale Hill, recently appointed President of Ford Motor Company Africa, was elected unopposed as the new Naamsa president for a two-year term. Hill serves on the boards of Ford Motor Company of Southern Africa, and Ford Financial Services South Africa. Hill is succeeding Andrew Kirby, president and CEO of Toyota South Africa Motors as Naamsa president.
WesBank’s own data indicated that while there had been high demand for pre-owned vehicles over the last two years, a slow shift back toward new vehicles may be underway.
“Compared to a year ago, WesBank’s new applications rose 1.8 percent during October, while applications for pre-owned deals declined 5.9 percent. In addition, the bank’s used-to-new ratio has shifted over the 12-month period from 2.25 used vehicles financed for every new vehicle a year ago, to 2.08,” said Gaoaketse.
BUSINESS REPORT ONLINE