New vehicle sales start year on a low as exports rise

South Africa’s new vehicle sales remained on the downwards trajectory in January by starting the new year in the red despite exports turning the other corner.

According to National Association of Automobile Manufacturers of South Africa (NAAMSA), sales dropped by 13.9% from January 2020’s 40 413 to 34 784. Individual segments were however mixed with passenger vehicles posting a drop of eighteen percent from 29 073 to 23 863, and light commercial vehicles a loss of 4.9% from 9 780 to 9 301.

As was often the case last year, medium and heavy duty commercial vehicle sales ended the month in the black with the former remaining unchanged at 431 units and the latter increasing by 6.6% to 1 133. For the second month in a row, exports came out on top with an increase of 39.7% from 16 303 to 22 771.

“For the first quarter of 2021 trading conditions in the new vehicle market are expected to remain challenging due to slow demand compared with the pre-Covid-19 first quarter comparison, exchange rate volatility and the negative impact on household expenditure by fuel and electricity price increases,” NAAMSA said in a statement.

“However, considering the close correlation between new-vehicle sales and the country’s GDP growth rate, the Reserve Bank’s forecast of a domestic economic growth rate of 3.6% for 2021 presents a favourable scenario for a sound rebound of the new vehicle market in 2021, from the exceptional low base in 2020”.

It however added that, “although the current low interest rates, coupled with low inflation, could be regarded as building blocks to stimulate the new vehicle market, a full recovery to pre-Covid-19 new vehicle sales levels could take around three years”.

Out of the best performing manufacturers, Toyota remained on top with sales of 9 033 units, followed by Volkswagen (5 867), Ford (2 687), Hyundai (2 622), Nissan (2 038), Suzuki (1 861), Renault (1 400), Mercedes-Benz (1 300), Kia (1 256) and Isuzu (1 098).

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