Naamsa said the new vehicle sales started 2015 on a “mixed note” but short-to-medium-term prospects had turned increasingly positive.
“Moreover, as expected, export sales of new motor vehicles had started the year on a strong note,” Naamsa said in a statement.
“The January 2015 export sales at 16,708 units reflected a substantial improvement of 2863 vehicles or a gain of 20.7 percent compared to the 13,845 vehicles exported in January last year.”
Sales of light commercials, heavy and extra heavy trucks had recorded noteworthy gains, it said.
Naamsa said that out of the total reported industry sales of 52,306 vehicles — an estimated 81.9 percent, 42,845 units, represented dealer sales, while 11.3 percent represented sales to the vehicle rental industry, four percent to industry corporate fleets and 2.8 percent to government.
“The new car market had experienced some pressure in January 2015 and at 36,982 units reflected a decline of 1392 units or a fall of 3.6 percent compared to the 38,374 new cars sold in January last year,” it said.
“The car rental industry had again made a strong contribution and had accounted for 15.3 percent of new car sales in January, 2015.”
Domestic sales of industry new light commercial vehicles, bakkies and minibuses were 13,460 units during January 2015 and showed a gain of 756 units.
This was a six percent improvement compared to the 12,704 light commercial vehicles sold during January 2014.
Sales of vehicles in the medium and heavy truck segments of the industry at 637 units and 1227 units, respectively, reflected a “mixed picture”, Naamsa said.
“In the case of medium commercial vehicles, reflected a decline of 136 units or 17.6 percent and, in the case of heavy trucks and buses, an improvement of 130 vehicles or a gain of 11.9 percent — compared to the corresponding month last year.”
Industry new vehicle exports during January 2015 had registered strong gains compared to the corresponding month last year.
“Naamsa anticipated that on the back of normalised industry production, exports for 2015 would improve by around 15 percent to a record of about 320,000 vehicles,” it said.
“Domestically, near term prospects for the new vehicle market had improved on the back of a number of recent positive developments.”
Naamsa said that consumer spending was likely to benefit from the substantial decline in fuel prices over the past six months.
The outlook for 2015, in terms of new vehicle sales, had improved over the short to medium term and would be reinforced further by expectations of a higher economic growth rate of around 2.3 percent for the year, it said.
“However, the one major negative factor revolved around the security and stability in electricity supply,” said Naamsa.
Head of Standard Bank Vehicle and Asset Finance: Personal Markets, Nicholas Nkosi, said it was difficult to read too much into the January figures released.
“Whilst difficult to read too much into the January numbers given volatility in Dec/Jan, the trend is generally positive for passenger vehicles and the export market,” he said in a statement.
“New vehicle sales prices will continue to remain at current levels given the exchange rate, whilst we should see the pre-owned/used car market showing strong performance in 2015.”
Head of Absa Vehicle and Asset Finance, Wessel Steffens, said most new vehicles were currently financed over a 72-month period with only the used vehicles marginally impacting the average financing term.
“The main driver behind this is affordability, but it has the downside of an ever-increasing average contract period which will continue to lengthen the replacement cycle,” he said.
Absa experienced an increase in the number of applications received and a slight decrease in the approval rate.
Steffens said that given that many consumers were still highly indebted and finding it difficult to obtain credit for higher priced vehicles, demand for favourably priced entry-level vehicles and good quality used vehicles would remain strong.
He said the factors that impacted on vehicle sales were vehicle prices, household finances, vehicle finance, transport costs and economic performance and vehicle demand and supply.