Domestic new-vehicle sales in May jumped by 10.1%, to 43 060 units, compared with the same month last year.
The new-passenger-car market reached 27 401 units last month – a mere 0.1% up on May last year.
Sales of new bakkies, vans and minibus taxis, however, were up 38.5%, to 12 825 units.
May medium-truck sales grew by 2.7%, reaching 580 units, while heavy-truck and bus sales expanded by 19.3%, to 2 254 units.
Out of the total reported industry sales, 90.2% represent dealer sales, 4.9% vehicle rental sales, 2.7% corporate fleet sales, and 2.2% government sales.
For the year-to-date, domestic new-vehicle sales are up 3%, to 218869 units.
May export sales, at 31 437 units, showed a 67.5% gain, compared with the same month last year.
Export sales in May 2022 were, however, heavily impacted on by flooding in KwaZulu-Natal.
Year-to-date export sales, at 146 985 units, are up 9.3%, compared with last year.
Unexpected Upswing
There was a general expectation in the automotive industry that new-vehicle sales would slow in May as many consumers turned their attention to investing in solar panels and inverters, instead of new cars, while businesses had to contend with increased loadshedding, as well as a tenth consecutive interest rate hike.
“The retail motor industry is, naturally, delighted at the unexpected extent of the upswing, with dealers responsible for selling 90.2% of the total volume,” says National Automobile Dealers’ Association (Nada) director Gary McCraw.
“Certain dealers focused on sales before the interest rate announcement to allow customers to take advantage of lower rates.
“This activity, early in the month, certainly benefited sales volumes during May.
“However, purchase consideration didn’t deteriorate after the rate increase, driven by the ongoing trend towards smaller, more affordable vehicles,” notes McCraw.
“Prior to the release of these rather buoyant figures, prospects seemed rather bleak, with the latest interest-rate escalations making it difficult for consumers to make repayments on bonds and car finance that had been doable a year ago.
“A contributing factor to the better-than-expected sales is that several brands started offering incentives to encourage new-vehicle buyers.
This is something we haven’t seen much of since the pandemic.
“Another factor could be that many dealers have accumulated stock and were concerned about being left with excessive inventory if the market took a downturn,” says McCraw.
“As a result, they turned to more aggressive marketing strategies on new models.”
Going forward, it will be interesting to see if the market can continue at this pace in an environment where sales growth is seen as “being somewhat against the odds”, says McCraw.