SA new vehicle sales down more than 3% in August – WesBank reports
According to the latest figures released by the Automotive Business Council, or Naamsa, SA’s new vehicle sales fell 3.1% in August to 45,679 units, the biggest year-on-year decline in sales since December 2021.
In compiling the relative data, WesBank reported that new vehicle sales stumbled in August, showing the first potential signs of strain amidst economic headwinds. The market has performed resiliently despite tightening household budgets, low business and consumer confidence, and the impact of the energy crisis, among other factors, it noted.
“August’s negative growth shouldn’t dismay completely,” said Lebo Gaoaketse, Head of Marketing and Communication at WesBank. “Although August sales experienced their biggest decline in 21 months, this volume is still 5.2% ahead of July sales. In addition, August 2022 sales were among the best-performing sales months last year,” he said.
According to Gaoaketse, the broader scope of July sales is cause for concern; however, a single month’s performance does not indicate a trend.
He added: “New vehicle sales have defied the odds in their slow recovery since the pandemic. Given the tough economic conditions, consumers have been under immense budget pressure since 2020. Consequently, two major trends impacted car purchasing behaviour; the pre-owned market boomed in the face of affordability, or consumers held onto their cars for longer rather than upgrading.”
Accordingly, within this context, new vehicle sales continued to recover after the pandemic, more recently impacted by replacement cycles finally becoming unavoidable and the subsequent softening of the pre-owned market – by lower stock levels and a lower appetite for inflated prices.
“As a result, despite being 3.1% lower than a year ago, August sales are not poor,” asserted Gaoaketse. “They are the third-best performing sales month this year, as were August 2022 sales up to that point.”
According to Naamsa, passenger car sales were down 6.7% (compared to -9.7%) in July to 28,951. It stated that dealers would be concerned that “fewer of those vehicles would be retailed off showroom floors,” adding that dealer channel sales were down 12.4% (year-on-year), indicating that 80.2% of passenger cars were consumer sales.
“The dealers fared better in the Light Commercial Vehicle (LCV) market, nonetheless. Moreover, dealer sales were up 9.8% in a segment that grew 2.7% to 13,652, showing the continued appeal of these vehicles for the South African market. Year-to-date sales have softened off the back of the August performance, down 1% to show overall market growth of 3.4% year-on-year. Total sales volume for the year to August is 355,246,” the association noted.
August sales are a mixed result that “should be viewed with caution,” Gaoaketse warned. “While its real-term performance remains relatively strong, there is no room for complacency in a market faced with ongoing challenges.”
