Heels & Horsepower Magazine

New Car Sales Establishing New Roots

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

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.

 

“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.

 

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.