South Africa’s new vehicle industry continued to show resilience during May in the face of market conditions containing more and more challenges.
With fuel prices rising overnight to record highs, a substantial increase of 0.5% in prime lending rates during the month, and the latest spate of flooding in KwaZulu Natal (KZN), new vehicle sales also continue to face the ongoing challenges of general economic pressure amid the wake of the pandemic. Yet, sales managed to achieve a small margin of growth during May as the market forges ahead with its slow recovery outlook.
According to naamsa | the Automotive Business Council, new vehicle sales grew 2.1% during May to 39,177 units compared to the same period last year. This represented just short of 2,000 more units than were sold last month.
“In uncertain times where volatility is a recurring theme, May presented unnecessary additional challenges to the market but fought bravely for recovery,” said Lebogang Gaoaketse, Head of Marketing and Communications at WesBank. “Supply constraints were also amplified by the impact of the floods in KZN on one of the market’s largest producers, not to mention the continued disruptions in logistics.”
Once again, the passenger car market took the majority of the limelight, with segment sales up 13.8% year-on-year to 27,437 cars. “This is likely due to the significant restraints in the supply of volumes of locally manufactured Light Commercial Vehicles (LCV), which continue to skew market performance,” said Gaoaketse.
LCV sales slumped 22.6% to record just 9,221, although this was only marginally less than the units sold during April.
The rental market showed a decline in sales of 6.5%, but retailers fared better with sales through the dealer channel up 4.5%.
Dealer performance in both the passenger car and LCV segments out-performed the market, with growth of 18.9% and -21.1% respectively. “It continues to be reassuring for the market that demand remains in the consumer space,” said Gaoaketse.
“This demand is displayed in WesBank’s own data, with applications increasing 9.7% year-on-year,” said Gaoaketse. “The pre-owned vehicle market remains robust, with more than double the volume of applications in the used vehicle market than new, as consumers continue to combat availability of stock and affordability.”
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