The sales statistics for August indicate that “some form of stability” is returning to the new-vehicle market, says WesBank.
August delivered the second-best performing sales month for the year (similar to last year), with 47 420 new-vehicle registrations – 14.2% higher than the same month in 2021.
“It is interesting to note the correlation in market performance this year against 2021,” says WesBank marketing and communications head Lebogang Gaoaketse.
“Last year, August put in the second-best selling month at the time, with March 2021 being the best sales month. Coincidentally, March 2022 sales have also, so far, been this year’s best sales month.”
If this could be defined as a trend, the market prospects for the remainder of the year could hold further promise, notes WesBank, as August 2021 sales were surpassed by September and November volumes last year.
“August sales are also reassuring in the sense that the volume increase comes off a relatively high base,” notes Gaoaketse. “[Also], the interest rate hike in July appears not to have dampened market demand.”
While more interest rate increases are inevitable this year, demand in the new-vehicle market continues to grow.
“Applications for finance continue to show a growing demand for vehicle replacement, with WesBank’s book showing strong double-digit growth, driven by applications for new vehicles,” says Gaoaketse.
National Automobile Dealers’ Association chairperson Mark Dommisse echoes this sentiment, noting that the appetite for new vehicles in South Africa continues to surprise motor industry pundits and forecasters alike, “as buyers show remarkable resilience in the face of tough economic pressures”.
August new-passenger-car sales expanded by 14.6%, to 31 269 units, compared with the same month last year.
Bakkie, van and minibus sales were up 13.1%, to 13 281 units, which was a far better performance than the 9 552 units sold in July.
These numbers were boosted by the Toyota plant in Durban returning to production in August, following flooding in April.
Toyota South Africa Motors (TSAM) notes that it has “started to bounce back” to pre-flood sales figures, posting a total of 11 138 sales for August.
The company’s latest sales are 4 028 units up, compared with July, with August numbers “certainly propped up by the resumption of operations at the Prospecton plant, albeit still in ramp-up phase”.
“The resilience of the Toyota brand in South Africa was put to the test when production ceased for a few months following the devastating floods that caused damage to our plant in Durban,” says TSAM sales and marketing senior VP Leon Theron.
“We are truly pleased to have models such as Hilux, Hiace, Fortuner, Corolla Cross and Quest rolling off the production line again.
“However, we still have an extensive backlog of orders that we have to clear, and we continue to ask for patience on the part of our customers. There is indeed light at the end of the tunnel.”
Year-to-date, total new-vehicle sales in South Africa are up 13.8%, to 344 244 units.
Used-Car Market Waning
“The appeal of the preowned market appears to be waning, likely due to price inflation and the increasingly limited availability of good stock,” says Gaoaketse.
“Where the preowned market has been offering affordability solutions for cost-conscious consumers, the average deal size on a used car has now increased over 10% year-on-year, while the value of finance agreements on new vehicles over the same period is static.”
This will fuel the new-vehicle market as the replacement cycle comes under pressure and motorists require new mobility solutions to combat the rising operating costs of older vehicles.