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New vehicle sales ended 2014 on a strong note with aggregate Industry new vehicle sales at 51 461 units recording an improvement of 4 979 vehicles or a gain of 10,7% compared to the total new vehicle sales of 46 482 units during the corresponding month of December, 2013. The December, 2014 new passenger car market and light commercial vehicle market reflected a year on year volume improvement of 9,3% and 14,7% respectively. Sales of extra heavy commercial vehicles rose by 29,9% year on year. Export sales had recorded a marginal decline in December, 2014 and at 21 833 units reflected a fall of 357 vehicles or 1,6 % compared to the 22 190 vehicles exported during December, 2013.
Following four successive years of growth in new vehicle sales (2010 – 2013) – 2014 new vehicle sales in South Africa recorded a slight year on year decline. The slowdown in the economy, two interest rate increases and above new vehicle average price inflation contributed to a fall in domestic sales volumes of 0,7% for the year. In the event, the marginal decline in aggregate sales during 2014 of 0,7 % in volume terms compares to annual growth in total sales of 24,7 % year on year in 2010, 16,1% in 2011, 10,2% in 2012 and 2,9% in 2013.
Aggregate annual industry sales by sector, over the past six years, were as follows:
|
Sector
|
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2014 / 2013 % Change |
| Cars |
258 129 |
337 130 |
396 292 |
442 604 |
450 296 |
439 179 |
-2.5% |
| Light Commercials |
118 159 |
133 756 |
149 301 |
160 174 |
167 996 |
173 790 |
+3.4% |
| Medium Commercials |
7 229 |
7 557 |
9 218 |
10 104 |
11 584 |
11 021 |
-4.9% |
| Heavy, Extra Heavy Commercials, Buses |
11 705 |
14 464 |
17 438 |
17 737 |
19 340 |
20 533 |
+6.2% |
| Total Vehicles |
395 222 |
492 907 |
572 249 |
630 619 |
649 216 |
644 523 |
-0.7% |
On balance, 2014 turned out to be a difficult year for the South African automotive industry with domestic new vehicle sales under pressure, particularly at dealer level, despite attractive incentives and a strong contribution by the car rental sector which accounted for an estimated 14,0% of new car sales during the year. Sales of heavy and extra heavy commercial vehicles performed relatively well and recorded noteworthy year on year gains. Industry trading conditions remained intensely competitive with over 60 brands and about 2 962 model derivatives, in the new car and light commercial vehicle sectors, competing for consumers’ franchise. Preliminary estimates indicate that motor industry new vehicle related sales turnover had grown by about 9,0%, based on sales volumes and a weighted average estimated increase of about 10,0% in new vehicle prices, during 2013 to reach about R224 billion for the year. Industry new vehicle export sales were estimated to have added a further R65 billion to total Industry 2014 revenue.
The outlook for 2015 remains uninspiring with the best case scenario, at this stage, one of marginal volume growth in domestic sales. NAAMSA projections are based on expectations of an improvement in South Africa’s economic growth rate to between 2,0% and 2,5% in 2015, relative stability in automotive industry industrial relations, stable interest rates and credit ratings as well as prospects for moderating consumer price inflation.
These expected positive factors will be offset to some extent by higher than inflation new vehicle price increases as a result of the weakness in the Rand for most of 2013 and during 2014 against major international currencies. The depreciation in the exchange rate resulted in significant cost pressures in respect of imported content, used in the production of locally manufactured vehicles, and more particularly, in the case of imported built up vehicles.
Provided the expectations materialised, aggregate new vehicle sales volume growth during 2015 could improve by around 4,0%. This would represent a commendable performance in relation to the fairly high sales base established over the past few years. Furthermore, demand by the car rental industry was expected to remain strong during 2015 and should continue to make a positive contribution on the back of further growth in tourism and business travel.
Internationally and domestically, vehicle manufacturers would continue to focus on new models and products through sustained investment in new technologies. In South Africa, the industry continued to view the need for more environmentally friendly fuels and vehicles as important.
Source: NAAMSA
