The downward trend in vehicle sales in South Africa has been reversed at last, but the improvement is still comparatively small as business and consumer confidence is still feeling the effects of the financial meltdown of last year.
Besides the cautious confidence inspired by the increasing sales, the SA motor industry was given a substantial fillip with the recent announcement of a number of important local manufacturing and export projects.
These include the new generation VW Polo, Polo Vivo (replacing the long-running CitiGolf), new Isuzu KB pick-up and half-tonner (sourced from GM-Daewoo and badged Chevrolet?) from General Motors, a new one-ton pick-up from Ford and the possibility of the next C-Class Mercedes-Benz continuing to be built locally. In fact, SA motor manufacturers are set to almost double their 2009 capital investment this year, lifting it to R4,62-billion.
However, what is interesting is the way the passenger car buying pattern has changed in the past year, when one compares the National Association of Automobile Manufacturers of SA (Naamsa) for the first quarter of 2010 with the same period a year ago. The total market in the three month period has grown by 16,5 per cent, from 60 043 units to 69 951, but the various buyer sectors are completely different.
Significant growth in sales to the rental companies occurred, as expected, with unit sales to these businesses jumping by 88,9 per cent as they fleet up for the expected high demand during the World Cup in June and July. The jump in rental sales of 4 426 units was a major contributor to the improvement in the overall car market of 9 908 units. This rental sales increase was, in fact, responsible for 45 per cent of the growth
Importantly, dealers, who are the lifeblood of the local motor industry, have also benefitted from the swing in sales trends, with an improvement of 14,6 per cent in their car sales, while sales to the government shrank substantially in the first quarter, going down by 17,9 per cent. Single unit sales to motor manufacturers and retailers fell 19 per cent as an indication that they are still feeling the effects of the tight financial situation.
Another factor in the sales for the first quarter of 2010 that attracted one’s attention was the very strong performance by the imported brands in the Associated Motor Holdings (AMH) stable. Its share of the total three-month market of 120 948 units was 11,8 per cent, which was an impressive 3.4 per cent up on the situation a year previously; 14 258 units sold in the first quarter of 2010 versus 8 596 during the same period last year.
The impressive statistics from AMH are probably due to the success of the Hyundai and Kia brands, both of which are rocketing up the sales charts world wide – particularly in the United States. It is just a pity their local performance is kept under wraps by secretive AMH and one wonders how these brands would fare if they were not only under the control of AMH.
This all added up to growth of 18,7 per cent in the total market when non-reporters to Naamsa (mainly AMH) are included and only 14,4 per cent without this group.
The comparative year-to-date situation in the various segments – including non-reporters – was: cars up 23 per cent, light commercials up 12,8 per cent, medium commercials dropping 16.4 per cent (remember the truck market held up longer than cars and LCVs as the economy turned downwards last year and now it is taking longer to recover), heavy trucks falling 11.2 per cent, extra-heavy trucks moving up by 9,9 per cent and large buses jumping by 111,2 per cent on the back of bulk deliveries for World Cup 2010.
TOTAL VEHICLE MARKET
It was interesting to note that despite the economic turmoil and the big changes in the local motor industry, particularly on the retail side, the status quo was virtually retained in terms of the top 10 sellers in the first quarter of 2010 compared to the situation a year ago. The only change came at the bottom of the pecking order where Renault moved up from 10th to ninth and in so doing displaced the Jaguar/Land Rover duo.
Toyota, which completed 30 years of local market dominance at the end of last year, continues to lead the way with penetration of 24,5 per cent. However, this was 1.6 per cent below the figure at the end of the first quarter of 2009, which was virtually identical to the growth of 1,5 per cent by Volkswagen, a company that is certainly not hiding the fact that it is intent on overtaking Toyota as the global industry leader sooner rather than later than its target of 2015.
Toyota not only has introduced little in the way of major new models in the past year, but it is no doubt also suffering backwash from the ongoing negative publicity arising from the millions of vehicles being recalled for safety-related repairs and claims that some of its vehicles are unsafe.
General Motors SA (GMSA) continues to hold a lead of around 1 000 units over rival Ford as these two fight out third and fourth positions. However, Mercedes-Benz SA (MBSA) is closing in on these two protagonists and was only 365 units behind Ford at the end of the quarter, buoyed by the strong-selling C-Class that is now the third most popular new car in the country.
Another big winner in this analysis was BMW, which saw its volume jump 42 per cent and share grow by 1,3 per cent as it chased after sixth-placed Nissan, which had also improved its position, moving up 0,6 per cent to 7,9 per cent.
Honda had a disappointing quarter, losing 1,6 per cent as it slid to only 119 units ahead of Renault, which grew its volume by 94 per cent and penetration by 0,8 per cent.
PASSENGER CARS
Volkswagen/Audi took a big stride forward in its aim for dominance of the SA passenger car market in the first three months of 2010, raising its share by 2 per cent to 23.3 per cent, while former champion Toyota slipped 2,6 per cent to 19,1 per cent.
At the end of the first quarter of 2009 the gap between VW and Toyota had been 255 units in Toyota’s favour, but has now swung to 2 958 units in VW’s favour. And this was before the launch of the CitiGolf successor, the Polo Vivo, which is proving an instant winner in the entry level segment where Toyota no longer has an entrant.
Mercedes-Benz, due to its very popular C-Class, improved its hold on third position in the car segment with market share growth of 0,9 per cent to 11,5 per cent, while BMW overtook Ford for fourth spot with an excellent penetration improvement of 1,8 per cent. Meanwhile Ford lost 1,6 per cent, some of which it blames on insufficient supply of popular models like the Fiesta.
GMSA was another company to show growth in the car segment, remaining in sixth spot, but its increase of 1,4 per cent in share narrowed the gap to Ford considerably, from 2 419 units at the end of the first quarter of 2009 to only 752 a year later.
There was a switch in places between the seventh- and eighth-placed brands, with Nissan moving ahead of Honda, although both lost share – Nissan down by 1,2 per cent and Honda faring even worse as it fell 2,5 per cent.
Chrysler SA, which had been ninth at this stage last year, has dropped out of the top 10 in sales, with Renault moving up from 10th to ninth and Jaguar/Land Rover slipping into 10th.
In terms of individual models it is the Polo that is clearly the country’s favourite car, with market share up 2,1 per cent to 11 per cent and there is a growing gap between it and the long-time market leader, the Toyota Corolla, which lost 0,8 per cent in share and fell to 7,5 per cent. The Mercedes-Benz C-Class continues to amaze and this time shifted up from fourth to third, despite a small drop in share, with its rival, the BMW 3-Series, going from fifth to fourth with a 1,1 per cent improvement in penetration.
Fifth position is now filled by the Toyota Yaris, which had the biggest fall of any major new car model range, dropping 3,8 per cent to 3,9 per cent and going from third to fifth on the Top 10 chart. In fact, Yaris was only 228 units ahead of its stable companion, the Fortuner SUV, which had jumped from being out of the top 10 a year ago to sixth spot now.
The Ford Fiesta, evidently due to a lack of availability, dropped from sixth to seventh, with the VW Golf 6, which was introduced in the second half of 2009, coming in at eight, just ahead of the Polo Vivo, which moved straight into ninth position on the basis of only one month’s sales! Last position in the Top 10 was filled by the Chevrolet Aveo.
Last year the Opel Corsa had been eighth, the Toyota Avanza ninth and the Nissan Livina 10th, to underscore the vagaries of the SA buying public.
LIGHT COMMERCIAL VEHICLES
Toyota continues to rule the roost in the light commercial vehicle sector with 1,4 per cent growth in share lifting it to a very dominant 38,6 per cent and its volume for the first three months of 2010, at 12 173 units, was almost double that of second-placed GMSA on 6 312 units, with the latter having lost 3,6 per cent in share as it prepares to renew its LCV offerings.
Nissan surprised by moving up from fourth to third with 5 per cent growth in share and going up to 18 per cent, due mainly to the strong performance of its Renault Logan-based NP200 half-ton pick-up. Ford slipped back into fourth position despite penetration improving by 1,5 per cent to 16 per cent.
Mercedes-Benz, which is finding sales slow for its Mitsubishi Triton pick-up range, stayed fifth, but shed 2,4 per cent in share, while Volkswagen completed the Top 6 with 504 units sold and a 1,6 per cent share (down 0,2 per cent).
It will be interesting to see how the Uitenhage-based manufacturer fares when its Amarok one-ton bakkie arrives later this year. This news model is getting rave media reviews and the media are tipping it to be a strong challenger to Hilux. What they forget is that VW shed most of its rural dealers about 10 years ago and this is where Toyota is still well represented.
The performance of Hilux in the first quarter of 2010 underlined how entrenched this bakkie is in South Africa, with market share jumping an impressive 3,8 per cent to 25,2 per cent, with volume of 7 937 units, which made it the top selling individual model range in South Africa for the quarter, 263 units ahead of the VW Polo. This is also not the first time that Hilux has been the most popular vehicle in SA.
Toyota’s other strong contender among the LCV ranges, the Quantum, lost its runner-up position this quarter as its market share fell 2,1 per cent. It is also said to be coming up against some “Quantum lookalikes” from China in the near future, which could further deflate sales of a vehicle that is the new standard for the minibus taxi industry, a position that was long held by its predecessor, the Hi-Ace.
The Corsa half-tonner moved back to runner-up position, despite losing 0.9 per cent in share. The extended life Nissan Hardbody improved its position from fifth to fourth with a 2 per cent improvement in penetration, so overtaking the Isuzu KB, which is due for a full model change and lost 2,7 per cent in share.
The Nissan NP200 jumped up from eighth to sixth, overtaking one of its half-ton rivals, the Ford Bantam, as well as the one-ton Ford Ranger, with the Bantam now in eighth and the Ranger in seventh. Ranger’s stable mate, the Mazda BT-50, shifted up from 10th to ninth, while the Nissan Navara took 10th spot at the expense of the Triton, which is really struggling, having lost 1,4 per cent in share and 38 per cent in volume compared to the situation a year ago.
MEDIUM COMMERCIAL VEHICLES (3 501KG – 8 500KG GVM)
The medium commercial market for the first three months of 2010 saw the two top protagonists, Hino and Mercedes-Benz Sprinter, locked in a tie at the top of the table on 389 units, with the former having shed 2,1 per cent in share, while the MB product gained 3,2 per cent. Actually these rivals compete in different sectors of this segment, with most Sprinters being sold as vans or buses, while the Hinos are sold as freight carriers or chassis-cabs.
Isuzu, which is really going places in the local truck market, remains in third place, but has strengthened its position with a 2,4 per cent gain in share. VW’s Crafter, which shares many major components with the Sprinter, continues to improve its position and grew 0,8 per cent to 11,6 per cent as it stayed in fourth spot, ahead of Tata and Iveco.
Missing from the top rank is UD Trucks (formerly Nissan Diesel) which has just launched a new MCV range. It had been fifth at the end of the first quarter of 2009, but was a lowly eighth a year later.
HEAVY TRUCKS (8 501-16 500KG GVM)
The local heavy truck market is basically a four-horse race between the Japanese manufacturers. Isuzu, which had been top of the pile at the end of the first quarter of 2009, dropped to second with a fall of 9,7 per cent in share as its previous F-Series range was run out and the new models introduced on a scale seldom seen from a truck maker.
Hino, which has led the way in this market for the past few years, slipped from second to third as share dropped 0,6 per cent. These moves let UD Trucks jump from third to first with an impressive 4 per cent increase in share. Mitsubishi Fuso also performed well in a depressed market, growing its share by 9.4 per cent, while the European makers, Mercedes-Benz, MAN and Iveco VW continuing to battle for sales VW has withdrawn from this market following its merger with MAN.
EXTRA-HEAVY TRUCKS (OVER 16 500KG GVM)
There have been some shake-ups in the XHCV market too, although Mercedes-Benz remains a clear segment leader on 19.6 per cent, which was 0.6 per cent down on the figure at the end of the first quarter of 2009.
The big shock is the fall of UD Trucks (formerly Nissan Diesel), from second to fifth as share dropped 2,4 per cent despite having a new product line-up in the form of the Quon. MAN has moved back into second from third with a 3 per cent improvement in its share, with Freightliner moving into third.
Volvo jumped from sixth to fourth as share improved by 3,4 per cent and volume almost doubled in a fairly static market. International moved up marginally from seventh to sixth, behind UD Trucks.
Scania was the big loser, dropping 3,5 per cent after having been a shining star in the tough times of 2009, as its loss in volume then was far less than the overall segment. It went down 3,5 per cent to 6,9 per cent in the first quarter of 2010 and from fifth to seventh on the rankings.
LARGE BUSES (OVER 8 500KG GVM)
The bus market, of which great things had been expected in 2010 with World Cup football, became a one-horse race this year, with Mercedes-Benz selling 355 units and taking a 72,2 per cent share – up 56,7 per cent on the situation a year ago – on the back of bulk orders. The only other significant players this year have been MAN (96 units sold) and Scania (35), while the Volksbus sold only six units (down from 46 a year ago) and Iveco sold none (down from 55). Volvo and VDL also reported no sales in the quarter.
LOOKING AHEAD
Naamsa, in its commentary on the state of the local motor industry after the first quarter of 2010, says domestic sales could continue to gain momentum as economic activity levels improved further in the medium term. The domestic market is also expected to receive support from further improvements in business and consumer confidence as well as lower inflation and the positive effect of interest rate reduction. Naamsa expects sales projections to be revised upwards to reflect growth of around 12 per cent for 2010, compared to last year.
