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naamsa Responds To The National Budget Speech

vuyi on February 24, 2023

The auto industry welcomes the balanced pronouncements made by the Minister of Finance, but has expressed concern over the lack of support for New Energy Vehicles.

The Automotive Business Council has welcomed Minister Enoch Godongwana’s highly anticipated budget speech which addressed several important national topics affecting the country today.

As a responsible corporate citizen, the auto sector understands and welcomes the focus given to the energy crisis, tax cuts for households and businesses, increases in various social services, including health, education, and social grants, and the R903 billion earmarked for infrastructure spending.

Minister of Finance, Mr Enoch Godongwana

As it relates to the automotive industry, naamsa welcomed the announcement of a 25% tax rebate, up to R15,000.00 for residential solar installations and the rebate guarantee scheme for businesses that have been hit hard by ongoing power outages and rising energy costs. This relief bodes well for the energy needs of many local auto specific businesses who are impacted negatively by the systemic energy supply challenges.

However, while the Minister was progressive in his announcements generally, the automotive industry was particularly disappointed that no solid commitment was made on the support programme for the manufacturing of NEVs and NEV components in the country.

The Minister did not provide any policy guarantees for the South African automotive industry’s inevitable transition to New Energy Vehicles notwithstanding South Africa’s commitments to transition and decarbonisation strategies covered by the $8,5 billion allocation. The industry further reiterated that the delays with the promulgation of the NEV White Paper continues to pose as one of its biggest risk towards investment and retention of jobs in many of our local production lines.

As outlined in the recently released naamsa Thought Leadership Paper, the country’s policy makers must demonstrate tangible and deliberate intent to create and stimulate a competitive environment for the NEV market through various government support schemes for NEV production in order for the South African automotive industry to remain globally relevant, competitive and strong.

Isuzu boldly launches its all new 7th generation ISUZI D-MAX bakkie

vuyi on March 11, 2022

By H&H Admin

The first locally engineered and produced 7th generation ISUZU D-MAX bakkie rolled off the production line today.

The first locally engineered and produced 7th generation ISUZU D-MAX bakkie rolled off the production line today.

This signifies the beginning of Isuzu Motors South Africa’s (IMSAf) mass production of their soon-to-be-launched bakkie. High-ranking officials, led by the Premier of the Eastern Cape, Oscar Mabuyane, and Naamsa CEO, Mikel Mabasa, attended the proceedings at the OEM’s manufacturing plant in Gqeberha. 

Premier of the Eastern Cape: Oscar Mabuyane, President and CEO: Billy Tom

This is a key milestone for ISUZU as this 7th generation bakkie is the culmination of a R1.2 billion investment the business announced in 2019. 

“ISUZU’s Struandale plant and the new generation ISUZU D-MAX programme is crucial to the communities in the Nelson Mandela Bay metro and the livelihoods of thousands in South Africa and Africa,” said Billy Tom, President and CEO of ISUZU Motors South Africa. “We are delighted to see our significant investment in the motor industry come to fruition, and to secure the jobs of so many citizens while simultaneously bringing a vehicle re-engineered for African conditions to market.”

Image Credit: @billy.tom (Instagram

The investment was also crucial in ensuring the plant is upgraded to include state-of-the-art manufacturing equipment. The ISUZU manufacturing plant in Struandale now boasts a new body shop at the Struandale Manufacturing Plant, a new chassis assembly line at Isuzu’s Kempston Road facility, significant modifications to the paint shop and general assembly areas.

“The new vehicle programme is dependent on more sophisticated tooling, technologies and increased automation, in line with technological advancements and improved efficiencies,” said Dominic Rimmer, IMSAf Senior Vice President Technical Operations. “We have had to make significant changes to our facilities to accommodate new manufacturing techniques where we have invested in complete new machinery and equipment in both our body shop and chassis assembly line.

Image Credit: @billy.tom (Instagram

In addition to preparing new facilities for the assembly of the new ISUZU D-MAX, ISUZU engineers have been hard at work doing validation, homologation, and durability testing in preparation for the new bakkie’s introduction to the South African and Rest of Africa (ROFA) markets.

ISUZU Motors South Africa will officially launch the ISUZU D-MAX on the 7th April 2022 at the Nelson Mandela Bay Stadium in Gqeberha. Dubbed the ISUZU City, the OEM has appointed the services of local suppliers to ensure the launch benefits surrounding businesses.

Image Credit: @billy.tom (Instagram

The new ISUZU D-MAX is the seventh generation ISUZU light commercial vehicle to be produced in Port Elizabeth over a period of 42 years. 

February 2022 sales best in almost a year

vuyi on March 3, 2022

By H&H Admin

The new vehicle market continued to surge ahead during February, recording its best sales month since March last year.

According to naamsa | the Automotive Business Council, February new vehicle sales grew 18.4% compared to February 2021 to 44,229 units, a performance approaching volumes realised during the second half of 2019. 

“Despite the traditionally short February selling month and in the face of interest rate hikes and fuel price increases, new vehicle sales performed reassuringly well during the month,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank. “Consumer demand was strong during February, particularly for new vehicles as opposed to used, borne out by WesBank’s 14.2% increase in finance applications for new vehicles alone.”

That activity was particularly strong on the passenger car dealer floor, sales through that channel growing 27.9% during February, well ahead of market growth. Overall passenger car sales grew 22.4% to 29,563 units with a slightly flatter performance from the rental market this month.

Light Commercial Vehicles were up 9.4% to 12,290 units compared to February last year.

“Although year-on-year growth during February looked inspiring, passenger car sales were actually marginally (463 units) down on January sales,” says Gaoaketse. “Light Commercial Vehicle sales during February, however, were 2,666 units or 27.7% ahead of January, likely as a result of erratic supply continuing to hamper the market.”

The market has further headwinds to face as fuel prices will exceed R21 per litre inland during March and are destined to rise further amidst tensions in Ukraine. Industry could also face additional complications over and above microchips as supply and manufacture is potentially disrupted in the region and Russia. 

“The situation could amplify the divide between consumer and business demand and the market’s already hampered ability to supply,” says Gaoaketse. 

“This increasing amount of pent-up demand may only be balanced by affordability considerations thanks to increased running costs, and household incomes, which remain under pressure.”

It’s a far better situation to be in than weak economic activity and the market is rejoicing thanks to increased activity in sales with the consequent ripple effect throughout the value chain. 

The new vehicle market is already 18.8% up to 85,559 units during the first two months of the year compared to the year-to-date performance of 2021, outrunning many forecasts already made for the market this year.

“This bodes well for the continued recovery of the new vehicle market,” concludes Gaoaketse.

Good start to the new year with impressive January car sales figures

vuyi on February 2, 2022

By H&H Admin

An increase in the cost of living at the start of 2022 did not discourage South Africans from buying new vehicles during January.

South Africans were faced with fuel price hikes and another increase in interest rates as the new year started, but that didn’t deter them from buying new vehicles during January.

According to naamsa | the Automotive Business Council, January new vehicle sales increased 19.5% to 41,382 units compared to the start of 2021, creating a solid start to the year and the market’s continued recovery.

“January new vehicle sales kicked off the year at similar levels to the momentum created during the second half of 2021,” says Lebogang Gaoaketse, Head of Marketing and Communications at WesBank, referring to four months of sales in the period exceeding 41,000 units. “While some purchase decisions may have been deferred out of December into the new year, January sales provide a solid start to the year, raising the hopes of manufacturers and dealers for ongoing market improvement.”

While year-on-year comparisons remain difficult to interpret because of differing pandemic circumstances, WesBank remained positive for a continued slow recovery of the market during 2022.

Both passenger cars and light commercial vehicles (LCVs) started the year positively, increasing 26.6% and 3.8% respectively. Dealer sales in the passenger car space out-stripped the overall market, increasing 33.7%, a very positive sign of consumer demand.

Sales into the rental market also indicate an increase in business confidence and a more positive outlook to tourism with sales in the channel up 21% during January.

“While gradual interest rate hikes are inevitable over the course of the year from their record lows, their impact should be considered within purchase decisions and affordability,” says Gaoaketse. “Rising costs of living amidst more slowly recovering earnings are expected to continue placing pressure on household incomes and the wherewithal for consumers to afford new vehicles during 2022. But price inflation in the pre-owned market and necessary replacement cycles some two years after the onset of the pandemic should be expected to fuel demand.”

SA Vehicle Sales Figures End 2021 On A Relatively High Note

vuyi on December 2, 2021

Press Release: Wesbank

South Africa’s new vehicle market has been faced with numerous challenges over the course of this year but sale seem to be on the rise.

South Africa’s new vehicle market has faced many challenges over the course of 2021.  However, the first interest rate hike in three years, consecutive fuel price hikes, a new variation on the pandemic theme and the return of load shedding didn’t deter sales too much.

The market’s resilience continued, recording 41,588 sales during November according to naamsa | the Automotive Business Council. This represents a 6.6% growth over the same period last year and a marginal improvement (553 units) over October.

“While it remains difficult to compare data over periods given the uncertainty of the pandemic for the past two years, a more certain sign of market improvement can be seen in a broader view of sales performance,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank. “During 2020, just two months of the year exceeded 40,000 units and those were the first two months, prior to lockdown regulations being put in place; five months of 2021 have recorded sales of more than 40,000 units, including the past four months consecutively. Market conditions are certainly improving.”

Year-to-date, the market has recorded 428,131 sales, up 24.8% on 2020’s 342,956.

The Passenger Car market increased 9.4% to 27,828 units. Dealer sales in the segment grew similarly by 9%, injecting much-needed confidence into the retail network’s sustainability as well as an indication of consumer confidence.

The Light Commercial Vehicle segment declined marginally (-0.8%) to 11,156 units with dealer channel sales slightly higher (0.2%) than November last year. 

The rental market once again provided a robust 4,771 sales across both segments, the current travel bans are likely to have an impact on this sector going into the new year.

“While the market is experiencing certain signs of continued recovery, the realities of rising interest rates and fuel prices is expected to impact affordability as household budgets still play catch-up from the ravages of the pandemic,” says Gaoaketse. “These factors are economically inevitable, but will certainly apply pressure to consumers.

Here are the sales figures for October 2021

vuyi on November 4, 2021

Press Release: WesBank

Stock shortages continued to thwart South Africa’s new vehicle market during October. However, the market continued to show a robust performance, despite the volumes being lower than September.

According to naamsa | the Automotive Business Council, 41,035 new vehicles were sold during October, an increase of 6.1% over the same month last year. Although September sales were the second-best volume month this year, October sales were 4.9% slower than last month. It is also important to note the context of October sales within the four months this year that have sold more than 40,000 units.

“The new vehicle market appears to be recovering strongly, demand out-stripping current supply constraints,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank. “The second half of the year has performed strongly since the mid-year lockdown restrictions, with the market trading above 40,000 units a month for the past three months.”

WesBank’s own data indicates a resurgence in the South African motor industry. “While we have seen high demand for pre-owned vehicles over the last two years, a slow shift back towards new vehicles may be currently underway,” says Gaoaketse. “Compared to a year ago, applications for to WesBank for new car deals rose 1.8% during October, while applications for pre-owned deals declined 5.9%. In addition, the bank’s used-to-new ratio has shifted over the 12-month period from 2.25 used vehicles financed for every new vehicle a year ago, to 2.08.”

However, the issue of supply is a global factor that skews the overall market picture. “Until global manufacturing stabilises off the back of the pandemic and resolves its micro-chip shortages, consumer and business purchase decisions will be swayed by availability and necessity,” says Gaoaketse. “The good news is that South African car dealers are in a much more sustainable position than a year ago.”

South Africa’s new passenger car market was up 3.1% to 27,496 units, displaying a robust consistency throughout the year. The Light Commercial Vehicle (LCV) market remains far more volatile. While it was down 10.9% in September, the segment bounced back to increase 15.9% during October to 11,188 sales.

A similar trend played out in the dealer space with passenger car and LCV volumes up 2.7% and 16.5% respectively. The market once again benefited from a sizeable volume of rental sales, with 5,002 passenger cars and 730 LCVs selling into fleets.

“Although the market looks in better shape, affordability continues to be a major consideration,” says Gaoaketse. “Significant fuel price hikes this month and the prospect of interest rates potentially increasing with the return of inflation are factors for consumers to consider when purchasing their next vehicle.” 

Toyota Wins the Most Awards in SA Car of the Year Competition

vuyi on October 8, 2021

Toyota South Africa Motors (TSAM) is proud to have won three categories in the 2021 South African Guild of Mobility Journalists (SAGMJ) Car of the Year competition.

In the Budget classification, Starlet came out tops, with the legendary Land Cruiser Prado scoring the number-one spot in the Adventure SUV category while SA’s favourite bakkie – Hilux – won Double Cab of the year. The latter also claimed second place overall, beating 21 other finalists across the nine categories.

 

The competition was open to vehicles that were launched in South Africa between November 2019 and April 2021.  Due to COVID-19 related restrictions, it was also the first time that the scoring was done completely electronically (there were no official test days in which all the finalists could be evaluated at the same facility by the jurors). The scoring was based on the jurors’ experiences testing the vehicles throughout the year.

The fact that we have won three categories with vastly different models is testament to our diverse offering.

– Leon Theron, Senior Vice President of Sales and Marketing at TSAM

According to Toyota South Africa, it’s category winners –  Prado, Starlet and Hilux –  have been performing remarkably well on the local sales charts. The Prado has been averaging around 90 units a month while the Starlet and Hilux have cumulatively sold more than 6 000 and 25 000 units respectively since the beginning of the year.

“We are truly grateful for the recognition received from the local media. The fact that we have won three categories with vastly different models is testament to our diverse offering –  providing our customers with as many options as possible,” said Leon Theron, Senior Vice President of Sales and Marketing at TSAM.

Photo Cred: Cornell van Heedern

New Vehicle Sales Recovery Back On Track

vuyi on October 6, 2021

The new vehicle market continued to recover some momentum during September following the disruptions experienced in the economy during July. Building on August sales successes, September sales continued to capture reassuring consumer demand and provided some reassurance for a stronger final quarter.

According to naamsa | the Automotive Business Council, September new vehicle sales increased 15.8% to 43,130 units compared to the same month last year. More reflective of actual performance, the month’s sales were up 4% relative to August sales, which was the second-best sales month this year prior to September’s performance.

Although new vehicle sales are 30.1% up year-to-date to 345,172 units compared to the same pandemic-impacted period last year, WesBank continues to finance well over two used vehicles for every new vehicle.

While demand in the pre-owned market remains very strong, used car price inflation may begin impacting this momentum.

Lebogang Gaoaketse, Head of Marketing and Communication at WesBank.

The sales mix across new and pre-owned is an interesting factor impacting the sustainability of the motor retail sector during the pandemic.

“While the manufacturers are naturally focused on selling new vehicles, the pre-owned market influences brand affinity. However, on a retail level, sales are sales, whether new or used, providing mobility solutions to customers and cashflow for dealers,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank.

There’s no denying that the motor industry is facing unusual times. What has been prevalent throughout, however, is the sector’s unfailing resilience to prevail.

“While demand in the pre-owned market remains very strong, used car price inflation may begin impacting this momentum. That demand may become more about preferential specification than affordability in a time when the trade is paying a premium on certain pre-owned models,” says Gaoaketse.

“While stock availability in the new vehicle market remains stressed, forcing some consumers into the pre-owned market, the sheer demand remains encouraging for the industry once global stock shortages are alleviated,” Gaoaketse continued.

Most impacted by that stock situation is the Light Commercial Vehicle (LCV) market. LCV sales declined 10.9% during September compared to September 2020 to record 10,943 sales. This is 802 units or 6.8% less than last month. While dealer channel sales in this segment were less affected (down 7.2%), there is a noticeable lack of Government volume (down 64%) impacting the segment.

Driving the market growth was the 30.5% gain in passenger car sales year-on-year. September’s passenger car volume of 29,538 units was bolstered by 4,951 sales into the rental market and was 8.5% ahead of last month’s market. Dealer sales also swelled 17.3%, providing that much-need sustainability injection into the retail space.

“The Reserve Bank’s decision last month to maintain interest rates will continue to provide stimulus to the market, whether new or used with both sectors’ sales ultimately contributing to the overall recovery of the South African motor industry,” Gaoaketse concluded.

July 2021 Car Sales Figures Take a Knock

vuyi on August 3, 2021

Civil unrest and adjusted Level 4 lockdown had a negative effect on car sales during the month of July 2021. Lebogang Gaoaketse, Head of Marketing and Communication at WesBank gives us the break down

The momentum being gathered in South Africa’s new vehicle sales recovery was given a harsh blow during July as civil protests tore through large parts of the country. In addition, the majority of the sales month was spent in adjusted Level 4 lockdown and the ongoing impact of stock shortages was exacerbated by disruptions in the logistics chain at ports.

July brought the fragility of the motor industry back into stark focus.

– Lebogang Gaoaketse, Head of Marketing and Communication at WesBank

“July brought the fragility of the motor industry back into stark focus,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank. “Not only did the month bring physical impacts, but the resulting consequences in business and consumer confidence will continue to challenge the industry’s recovery for months to come. Once again, the industry’s resilience is being put to the test.”

WesBank remains optimistic, however, for the industry’s continued recovery. “Rejuvenation of rental fleets, progress in the country’s vaccination rollout programme and revitalisation of the economy in general will all contribute towards building the South African motor industry,” says Gaoaketse. “The industry needs to remain focused on delivery and the inevitable demand that will rise in the medium term.”

Although July sales recorded 1.7% growth year-on-year to 32,949 units according to naamsa | the Automotive Business Council, the month declined 13.6% compared to June sales. WesBank says the market experience was reflected in demand, with the bank’s application rate comparatively slower.

While the country encountered yet another speed bump during July, there are many reasons to believe in the continued recovery of the market.

– – LEBOGANG GAOAKETSE, HEAD OF MARKETING AND COMMUNICATION AT WESBANK

The passenger car segment grew 9.1% year-on-year to 20,575 units but that was a far cry from the 24,497 units sold in June. The real effects of consumer confidence can be seen in the dealer channel sales, down 1.1% year-on-year and significantly worse off (-15.8%) than June.

Light Commercial Vehicle (LCV) sales hurt even more, down 8.1% at 10,266 compared to 11,165 in July last year. Sales through the showroom floor also got dealt a 9.8% knock and the picture compared to last month’s sales, was significantly worse.

“While the country encountered yet another speed bump during July, there are many reasons to believe in the continued recovery of the market,” says Gaoaketse. “Low interest rates, the return of adjusted Level 3 lockdown regulations, and some improvement to civil stability will provide a good basis for the industry’s determination to once again shine through.”

Challenges and opportunities for recovering new vehicle sales in SA – May 2021

vuyi on June 1, 2021

As the country adapts to adjusted Level 2 lockdown regulations, the impact of the pandemic remains high on the motor industry’s agenda.

A year ago, retailers were resuming sales under Alert Level 4 and the market mustered 12,874 sales during May 2020. One year later and the picture remains subdued, albeit with more stability as the market recovery continues to gain some momentum.

The market continues its slow recovery in the face of several challenges and opportunities

– Lebogang Gaoaketse, Head of Marketing and Communication at WesBank

According to naamsa, the Automotive Business Council, the new vehicle market sold 38,337 units during May this year. While unfair to compare this against May 2020 (up 197.8%), it is noteworthy that this represents a 7.6% growth over last month’s sales.

“The market continues its slow recovery in the face of several challenges and opportunities,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank. “Interest rates remain at historical lows, providing some of the most affordable finance and consequently opportunities to purchase a new vehicle. However, price inflation against the backdrop of a subdued economy continues to be a barrier for many purchase decisions.”

Compared to a year ago, new vehicle finance agreements through our books are averaging a deal size of R356,313, up 11,2%

– LEBOGANG GAOAKETSE, HEAD OF MARKETING AND COMMUNICATION AT WESBANK

According to the latest Vehicle Pricing Index (VPI) released by TransUnion in May, new vehicle prices in South Africa rose at nearly three times the general inflation rate during the first quarter of 2021. “

When measured against WesBank’s average deal size, we can see a similar trend in the amount of finance to access these vehicle purchases,” says Gaoaketse. “Compared to a year ago, new vehicle finance agreements through our books are averaging a deal size of R356,313, up 11,2%, while pre-owned deals average R253,537, an increase of 10,6%.”

Demand for vehicle finance continues to be reassuring, however. “Attractive deals on the showroom floor and a growing need for replacement as that cycle increased over lockdown are contributing towards the market’s recovery,” says Gaoaketse.

While May’s sales growth over April is welcomed, it should be noted that April sales were down on March figures

Supporting this demand, the passenger car segment sold 24,122 units during May, 85,1% of which were retailed through dealers to consumers. Dealer channel sales remain relatively robust and are 41,7% ahead year-to-date, for which retailers will be grateful. This segment was 7,1% ahead of April sales.

The Light Commercial Vehicles (LCVs) segment sold 11,930 units during May, 10% more than in April, improving the segment’s position significantly. Year-to-date sales in the segment are 68,5% higher than for the same period last year. Dealer channel sales in the segment accounted for 91,4% of sales.

“While May’s sales growth over April is welcomed, it should be noted that April sales were down on March figures,” says Gaoaketse. “This is indicative of the market’s slow recovery, but reassuring, nonetheless. As the industry prepares for the implementation of the Guidelines for Competition in the South African Automotive Aftermarket on 01 July, the motor industry has many opportunities to continue its significant contribution to the South African economy.”