Tanking 2019 new vehicle sales offset by December gains

South Africa’s new vehicle sales ended 2019 on a high with the National Association of Automobile Manufacturers of South Africa (NAAMSA) recording a 4.2% increase in December from 40 020 units in 2018, to 41 698.

Unlike in the first eleven months of the year, no individual segment sales were divulged with the association reporting a 9.1% gain in the sales of new passenger vehicle, while light commercial vehicles ended the year in the red with an overall decline of 6.7%.

Star performers throughout the year, medium and heavy-duty commercial vehicles finished the year in the black with respective gains of 19.0% and 18.8%. Exports however ended 2019 on a shock low with a decline of 57.7% from 18 124 to 13 298, although total figures for the year reflected a 10.2% increase from 351 139 in 2018, to a record setting 386 863.

In spite of the uptake in exports, overall domestic sales for 2019, with the exception of medium commercial vehicles climbing by 10.5% to 8 719 units, all ended on a disappointing note with passenger vehicles down 2.7% to 355 384, light commercial dropping by four percent to 153 189 and heavy-duty commercials declining by 1.2% to 19 334. With sales of 536 626 new vehicles throughout 2019, the market had declined by 2.5% from the 552 227 sales made in 2018.

“Domestic new vehicle sales in 2019 again had been affected by the subdued macro-economic environment, pressure on consumers’ disposable income and fragile business and consumer confidence. The lowering of the interest rate by 25 basis points during July 2019 has also not lent any significant support to the new vehicle market,” NAAMSA said in its annual report.

It added that the decline in passenger vehicle sales occurred despite strong rental deals and presence of more affordable offerings, while the “growth in the medium commercial vehicle segment could be an indication that customers are buying down into smaller vehicles due to the prevailing challenging economic conditions in the country”.

In tabling its predictions for this year, the association stated that current market conditions point to a two percent overall increase for a projected total of 549 000 vehicles based on the forecasted one percent growth in the local economy.

The association however also warned that, “downside risks for 2020 include the continuing load shedding crisis by Eskom with ripple effects on the economy, Moody’s pending decision on South Africa’s investment rating as well as a continuing weak domestic economic growth outlook. On the positive side, however, the country’s inflation has declined to well within the target range of between 3% and 6% and the industry’s exceptional export performance is set to continue”.

DECEMBER TOP 100 BEST SELLERS

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