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A look at vehicle sales figures one year since lockdown began.

vuyi on April 6, 2021

As the country observed the first-year anniversary since lockdown commenced, new vehicle sales provided reason for the industry to celebrate.

Twelve months ago, the country reeled to news of the pending lockdown as showrooms prepared to close their doors, consumers headed home, and vehicles were only let out for essential services. In March 2020, the new vehicle market plummeted 29.7% compared to March 2019 to record just 33,545 sales. The grip on the South African motor industry had tightened quickly.

One year later, the resilient industry is fighting a hard recovery. But March 2021 sales put one of their best feet forward.

With interest rates remaining stable at their low levels, a constantly – albeit slowly – improving supply of imported vehicles, and a slightly healthier economy operating within eased levels of restrictions, we expect the market to continue recovering well.
– Lebogang Gaoaketse, Head of Marketing and Communication at WesBank Vehicle and Asset Finance

“Reassuringly, March sales show a 18.4% increase over February this year, a number more indicative of the real strength of the market,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank Vehicle and Asset Finance. “With many of the brands indicating difficulty securing sufficient stock to meet demand, the new vehicle market seems to be well on its way to recovery.”

Passenger car sales were up 23.4% to 27,330 units year-on-year and 13.2% up on February 2021. With some renewed activity in the rental market, the consumer demand was noticeable with dealer sales in the segment up 24.2%.

Light Commercial Vehicles (LCVs) delivered a staggering 52.4% improvement over March last year to sell 14,375 units. This performance means the LCV segment is up 13.2% year-to-date and hopefully represents a surge in business confidence. The majority of activity in the segment remained on the showroom floor with dealers selling 61.1% more bakkies than they did a year ago.

“With interest rates remaining stable at their low levels, a constantly – albeit slowly – improving supply of imported vehicles, and a slightly healthier economy operating within eased levels of restrictions, we expect the market to continue recovering well,” says Gaoaketse. “While we have seen a significant increase in the average deal size financed by WesBank, we don’t expect new vehicle prices to increase dramatically. This will also provide added stimulus to the market and is a positive sign of consumer sentiment and ability to participate in the new vehicle market.”

The strong March performance made an encouraging impact on year-to-date sales. First quarter sales are just 0.9% down on the same period last year with 116,225 sales recorded during the first three months.

Relative stability in new vehicle sales

vuyi on March 1, 2021

February last year was the last normalised sales month before lockdown regulations sent the motor industry spinning.

February last year was the last normalised sales month before lockdown regulations sent the motor industry spinning. Back then, the market declined just 0,7% against 2019, a far cry from the 13,3% decline in sales experienced this February compared to it.

Relatively, that represents some form of stability this year compared to January’s decline of 13,9%. According to Naamsa – The Automotive Business Council, the market sold 37,521 units during the month.

“Interestingly, the correlation between market activity for WesBank between February 2020 and February 2021 is uncanny in its similarity,” says Lebo Gaoaketse, Head of Marketing and Communication at WesBank Vehicle and Asset Finance. “Were it not for the seismic shift that came to bear in March last year, any market commentator would have been forgiven for ignoring its normality.”

WesBank made its highly anticipated market forecast for the year a few weeks ago, calling the market down 15,8% in normalised terms this year. In effect, that would represent a 12% growth compared to last year off the back of the lack of sales during the initial lockdown and the slow recovery for the remainder of last year. “These figures will begin to make more sense from March, but will equally present a skewed picture given the interrupted sales picture of last year,” said Gaoaketse.

Light Commercial Vehicle (LCV) sales continued to buoy the depressed market picture. The segment’s 11,246 sales were 3,2% lower than February last year. Even more reassuringly, dealer sales in this segment showed a 1,1% increase in activity, accounting for 10,080 of those sales.

Passenger cars by comparison declined 18,1% to 24,270 units. While the rental market remained subdued, down 27,8%, the vast majority of its purchases were passenger cars: down 28,9%; but with 3,498 units injected into the market volume.

“The relative stability in the market during the first two months of the year should provide some level of relief for the industry,” said Gaoaketse. “Month-on-month, February sales show a fairly significant improvement compared to the first month of the year. With consumers better-adapted to the pandemic and living rhythm in the country, low interest rates continuing to assist indebtedness, and economic sectors slowly returning to more regular operations, there is much to be hopeful for the South African motor industry,” says Gaoaketse.

New Car Sales Establishing New Roots

vuyi on October 7, 2020

New vehicle sales continued to establish firmer ground, recording the third consecutive month of growth since lockdown.

The slow resurgence of sales comes off the back of reduced lockdown level regulations as the country entered Level One during September. Year-on-year results for the past three months have shifted from 29,6% in July, through 26,3% in August, to a market down 23,9% in September. According to the National Association of Automobile Manufacturers of South Africa (Naamsa), 37,403 new vehicles were sold during September, up 3,888 units from August.

“Some momentum is gathering as economic stimuli slowly return,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank Vehicle and Asset Finance. “The month-on-month increase in sales is more reassuring in real terms than the gradual improvement in year-on-year performance over the past three months. There are clear signs of recovery, although there remains a long road to full recovery.”

In contrast to actual sales activity, WesBank Vehicle and Asset Finance data indicates an increase in applications compared to September last year

As much as those nearly 4,000 additional units of volume will have been welcomed by dealers and brands, the harsh reality remains a market 11,737 units less than September last year. “Relatively, September sales down 23,9% compare favourably to the year-to-date performance, which is now 33,4% down from the same period last year,” says Gaoaketse. “That’s a very sobering 132,878 units less so far this year than pre Covid-19 levels of market activity.”

In contrast to actual sales activity, WesBank Vehicle and Asset Finance data indicates an increase in applications compared to September last year. “Whether it remains pent-up demand or merely more consumer and business optimism in the market, there are reassuring levels of demand,” says Gaoaketse. “While this isn’t currently translating into sales, it bodes well for the continued recovery of the market as affordability slowly improves.”

WesBank Vehicle and Asset Finance has also experienced an increase in its average deal duration, indicating the knock-on effects of lockdown delaying purchase decisions, as well as the continued stress on household incomes that is translating into current market performance.

Passenger car sales took the largest knock in September and accounted for the majority of the volume decrease year-on-year

Passenger car sales took the largest knock in September and accounted for the majority of the volume decrease year-on-year. At 31,2% down compared to September last year, the 22,798 sales meant 10,322 fewer passenger cars were sold in September than a year ago.

By comparison, Light Commercial Vehicle (LCV) sales were relatively buoyant at 12,267 units, down 8,9% or 1,202 sales compared to September 2019. Both segments did, however, sell more units than in August.

“Seemingly the long road to recovery for the automotive industry has begun,” says Gaoaketse. “Stimulating conditions to accelerate the return of new vehicle sales is welcome, including aggressive marketing campaigns, but – in particular – the low interest rate environment. Just how long these conditions will remain, will play an important part in how quickly the industry recovers.”

New record for Suzuki dealers in first full month of post-lockdown sales

vuyi on July 13, 2020

Suzuki Auto South Africa has surprised the market with a stellar sales performance in June, with sales figures returning to pre-lockdown levels and its dealer network breaking all existing records.

The S-Presso seems to be the perfect vehicle for cash-strapped South Africans looking for a reliable new car
– André Venter, divisional manager sales and marketing – Suzuki Auto South Africa

“All credit goes to our national dealer network, which worked very hard to reopen all their dealership floors, while meeting government and Suzuki standards for sanitation and safety. Their rapid action allowed us to meet the pent-up demand for good quality, affordable vehicles such as our new S-Presso and popular Swift,” says André Venter, divisional manager for sales and marketing at Suzuki Auto South Africa.

According to the National Association of Automobile Manufacturers (Naamsa), Suzuki Auto SA has leapt up the sales charts by selling 1 433 units, with all but one unit sold through the dealer network. This not only ranks Suzuki 7th overall in the sales rankings but gives it a 4.49% share of the total vehicle market and a 7.17% share of the passenger vehicle market.

We will support our dealers as they continue to trade under difficult circumstances
– ANDRÉ VENTER, DIVISIONAL MANAGER SALES AND MARKETING – SUZUKI AUTO SOUTH AFRICA

The S-Presso has proven to be a very popular new model, with a massive 555 new units finding new homes in June. This is the model’s first full month of sales, after Suzuki cancelled its in-person launch and launched it digitally shortly before of the start of South Africa’s national lockdown.

“With a starting price of only R139 900, a service plan and 5-year warranty included, the S-Presso seems to be the perfect vehicle for cash-strapped South Africans looking for a reliable new car. Its design as a compact SUV, with more interior space and high ground clearance, certainly helps,” says Venter.

Other Suzuki models that have proven popular after sales restarted, include the Suzuki Swift (297 units), the Ignis (86 units) and the Jimny 4×4 (249 units).

…we have been forced to increase our support staff and available parts storage
– ANDRÉ VENTER, DIVISIONAL MANAGER SALES AND MARKETING – SUZUKI AUTO SOUTH AFRICA

While the entire automotive market has not recovered in step with Suzuki, it is heartening to see a return of general sales activity. Naamsa reports that 31 867 vehicles were sold in June, which is significantly up from the 12 874 vehicles sold in May. It remains well below the 45 953 units sold in June last year and it is a full 105 054 vehicles fewer than in the first six months of 2019.

(Photo by Cornel van Heerden) www.cornelvanheerden.com

“It was impossible to predict the COVID-19 pandemic and subsequent lockdown or to fully gauge its impact on dealer health, but based on June’s sales it looks like there is a glimmer of hope for the auto industry. We will support our dealers as they continue to trade under difficult circumstances and will fully support the industry, which remains a very significant investor and employer in South Africa,” says Venter.

(Photo by Cornel van Heerden)
(Photo by Cornel van Heerden)
(Photo by Cornel van Heerden)
(Photo by Cornel van Heerden)

Suzuki last year celebrated its first ten years in South Africa with a new all-time sales record for the year and the introduction of exciting new models such as the Swift and Swift Sport. This year, it hopes to maintain this momentum by moving into new corporate offices, with adjacent parts storage.

“With the growth in our car parc and dealer network, we have been forced to increase our support staff and available parts storage. We have already identified a new corporate head office and warehouse facility in Johannesburg and will move as soon as it is safe to do so,” says Venter.