Pressure persists in the motor vehicle industry, some brands are running out of gas – experts
As pressure persists in the motor vehicle industry, certain brands have either reduced or halted their importation in 2018, Junior Analyst at Simonis Storms Securities, Indileni Nanghonga said.
Nanghonga said that in particular, Chevrolet moved from 160 units in 2017 (January to -July) to zero during the same period in 2018. In addition, BMW and Audi have reduced from above 19 units in 2014 to as low as 5 and 8 units respectively, in July 2018, clearly indicating pressure.
“We continue to see price reductions on high value vehicles coupled with other incentives such as payment holidays and below prime rate offerings,” Nanghonga added.
Meanwhile, vehicle sales increased by 5.2% in July 2018 following a 23.5% growth rate in the prior month. However, on an annual basis, vehicle sales contracted by 10.1% to 1 194 units in July 2018.
Moreover, four out of 58 brands make up 78.2% of the total vehicle sales. Toyota, which accounts for 44.1%, registered a decline of 13.7% to 527 units in July 2018. This is below the four year simple average of 574 units. Furthermore, Volkswagen, the second largest brand (14.5% market share), increased by 35.2% m-o-m to 173 units in July 2018.
Nanghonga explained that the monthly upsurge is attributed to a 30.5%, 19.2% and 40.0% growth rate in passenger vehicles, medium commercial vehicles and heavy commercial vehicles, respectively.
“The annual contraction was fueled by light commercial and extra heavy vehicles which contracted by 31.9% and 15.4%, respectively, in July 2018,” Nanghonga noted.
Caption: Chevrolet moved from 160 units in 2017 (January to -July) to zero during the same period in 2018.