JOHANNESBURG – “April new vehicle sales told an inspiring story of the South African motor industry’s resilience, while also providing a harsh reminder of the bleak outlook experienced a year ago,” says Lebogang Gaoaketse, the head of marketing and communication at WesBank Vehicle and Asset Finance.
With April 2020 sales essentially at a standstill as motor retailers were closed, the rejuvenated picture a year later, while reassuring, remains under pressure, he says.
According to the Automative Business Council (Naamsa), the new vehicle market grew 6.133.3% in April compared to April last year. However, the reality was a little more subdued when considering that April 2021’s 35 779 sales were 17.6% lower than last month – 7 649 units less than March.
“April sales are difficult to interpret within the context of lockdown,” Gaoaketse says. “On balance, April sales lost less against March than March sales had gained against February, meaning the market remains in its state of slow recovery. March sales had increased 18.4% over February.“
FEWER SELLING DAYS IN APRIL
Sales during April will also have been impacted by the numerous public holidays, providing fewer selling days during the month.
“Reassuringly, however, is that sales during the first four months of the year remain 28.3% ahead of the corresponding period last year. This is purely as a result of April volumes measured against the 574 sales recorded in April last year. Within this context, first quarter 2021 sales were 0.9% lower than 2020,” Gaoaketse says.
The passenger car segment sold 22 911 units during April, 86.2% of which were retailed through dealers to consumers. Dealer channel sales were relatively robust and are 27.3% ahead year-to-date. The segment was 13.9% down on March sales.
Light Commercial Vehicles (LCVs) by comparison were 24.3% lower than March, taking a harder knock, although year-to-date sales in the segment are 46.9% higher. Dealer channels sales in the segment accounted for 90% of sales.
USED CARS STILL IN DEMAND
“Demand in the new vehicle market remains high as judged by WesBank’s daily application rate,” says Gaoaketse. “While we continue to finance more than twice the number of pre-owned vehicles than new, there is a marginal shift towards new car sales as experienced during April.”
Affordability remains a key purchase consideration, driving consumers towards the pre-owned market.
“Attractive incentives in the new vehicle market, however, as well as low interest rates, are providing some stimulus to the new vehicle market,” Gaoaketse says.
THE DEALERSHIP PERSPECTIVE
On retail vehicle sales for April 2021, the chairperson of the National Automobile Dealers’ Association (Nada), Mark Dommisse says: “Sales results were better than expected, despite April being the shortest trading month bookended with public holidays and long weekends. There was the added complication of staggered school holidays affecting business too.”
Sales through dealer retail channels in April were estimated at 88.0% of total sales, with the rental industry taking 7.5%, 2.4% of sales going to the government and 2.1% to industry corporate fleets.
“We cannot compare sales with April 2020 as we were in the harshest Level 5 lockdown at this time last year, with only 574 new vehicles being sold that month and only 275 through the dealer network,” Dommisse says. “It’s also difficult to track where we are quarter-on-quarter, but with an average of 36 000 units sold over the first four months of 2021, the new car market is in a relatively healthy state.
“We must be mindful, however, of potential setbacks in coming months. In contrast to 2020. We have customers but a shortage of many models due to an increasing number of global logistical challenges are impacting negatively on the current and future new vehicle stock availability in South Africa. We’re experiencing a global scarcity of microchips, as well as steel, resin, and rubber.
“We now, unfortunately, have the added complication of severe lockdowns in India, limiting production. India is a large source of built-up vehicle imports, particularly in the entry level segment of the market.
“The large-scale vaccination programme in South Africa cannot start fast enough to bring more normality to the country. Kudos to the government for accelerating the supply of vaccines, with more than 300 000 batches arriving early on Monday morning and more expected in the next few weeks.”
Here are South Africa’s Top 6 best-selling vehicles in April 2021
1) Volkswagen Polo – 2 294 sold
2) Volkswagen Polo Vivo – 1 849 sold
3) Toyota Urban Cruiser – 796 sold
Light Commercial Vehicles
1) Toyota Hilux – 3 163 sold
2) Ford Ranger – 1 705 sold
3) Isuzu D-Max – 1 402 sold