Vehicle sales start to climb as economy resume

Toyota South Africa Motors and the rest of the local auto industry and the local economy could never predict what has unfolded over the last months in South Africa. And although sales have been steadily climbing as normal economic activities resume, the recorded figures for the first six months of the year is certainly not what Toyota or even the local auto industry and local economy envisaged for 2020.

Prior to the national lockdown measures imposed at the end of March, the local sales in the automotive sector were already under pressure and although for two months retail has been halted, the month of June has brought a glimmer of hope with sales starting to increase.

“The impact of COVID-19 and the lockdown have left Toyota approximately 24% short of where we would have like to be on our annual sales plan. This has mainly been driven by the intermission in car rental space, compounded by restricted trade during the lockdown and dwindling consumer confidence,” Leon Theron, Senior Vice President, Sales and Marketing, Toyota South Africa Motors (TSAM).

“Although we expected challenges in our first month out of full lockdown, we can see that the pro-active preparation by our dealerships has given us the edge in achieving more than we initially expected. We do however remain cautiously optimistic as to what July, and the rest of the year, may offer the industry as the situation remains capricious due to the increase in COVID-19 cases across the country,” Theron continued.

The impact of the struggling economy and consumer’s slow return to dealerships as a result of the national lockdown was reflected in the domestic sales as it only represented 30.7 per cent of sales recorded in the same month last year. According to The National Association of Automobile Manufacturers of South Africa (NAAMSA), 91.3 per cent or 29 100 units sold in the month of June came from dealer sales whereas only 4.6 per cent can be attributed to government purchases, 3.7 per cent came from industry corporate fleets and an estimated 0.4 per cent from the vehicle rental industry.

Even with the lower sales figures of 8 442 units, Toyota South Africa retained a 26.5 per cent market share in the month of June. The total units sold were comprised of 3 749 were passenger vehicles, 4 444 Light Commercial Vehicles, 144 Medium Commercial Vehicles (MCV) and Heavy Commercial (HCV) and Extra Heavy Commercial Vehicles segments accounting for 105 units.

These numbers can also be attributed to specific models with the Hilux raking in 3 131 sales, the Hiace 908 units whereas the Fortuner led the passenger segment with 961 units and Corolla Quest close behind with 718 units finding new homes. Further contributing to Toyota South Africa Motors’ operations is its parts’ distribution business which kept the vehicle servicing sectors for the Toyota, Hino and Lexus brands continue without fail.

“The market has experienced a severe decline and we expect a large amount of sales stimulus to create some economic activity in the sector. As TSAM, we have also adjusted our sales targets to suit this outlook, trusting in our diverse product line-up as well as the incredibly strong dealer network that has always been the cornerstone of our business. Despite having revised our annual targets due to lockdown, we have nonetheless set the bar high for our dealers in terms of the sales numbers. We strongly believe that our dealer network can get to these numbers and are excited to see them take on this challenge,” concludes Theron.