April new vehicle sales reflect lockdown effects
As is to be expected, new vehicle sales in April were almost non-existent when compared with what was seen in previous months.
With dealerships closed, consumers having very little need for cars along with other economic challenges, the last thing on many minds during the five-week national lockdown was purchasing a new car.
The market recorded total sales of 574 units, down 98.4% according to the National Association of Automobile Manufacturers of South Africa (NAAMSA). Some 105 units were passenger cars and 318 were light commercial vehicles, impacting the year-to-date volumes of those segments downwards to 28.1% and 38.5% respectively. The industry total is 32.1% down year-to-date.
“In this unprecedented time, the motor industry is experiencing unchartered conditions and grappling with the solutions to address it,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank.
The motor industry has been significantly impacted over the past two months. It will have learnt and adapted just as the rest of the world has, and as this pandemic emerges, there is nothing to define what the right or wrong way is to deal with it. But it will be eager to return to operation, whether manufacturing or retail.
“While government’s risk-adjusted and phased approach to unlocking economic activity is broadly supported, the motor industry will be looking to start operations sooner rather than later,” says Gaoaketse.
Numerous factors exist to stimulate the slow resumption of activity. “The extremely low-interest-rate environment, thanks to a 2% cut over the past month will help stimulate general economic activity, not least vehicle sales,” says Gaoaketse. “Indebted consumers will also be gaining some relief as a result. Significantly lower fuel prices will also contribute to household budgets, which – in some cases – will also be benefiting from work-from-home opportunities.”
Gaoaketse doesn’t expect any form of normality to return soon. “There are simply too many unknowns, from both a pandemic and economic perspective,” says Gaoaketse. “We should expect consumers to be slow in their return to the car market as they adapt to social distancing measures and remain cautious about their own budgets given the uncertainty,” she concluded.
