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In amplification of the new vehicle sales statistics for the month of April, 2016 – released today for public consumption on the website of the Department of Trade & Industry – the Association commented that new vehicle sales had shown further weakness during the month, however, light commercial vehicle sales had held up well. In contrast, as expected, new vehicle exports had rebounded sharply during the month.
In the event, April 2016 aggregate new vehicle sales at 40 390 units had registered a decline of 4 079 vehicles or a fall of 9,2% compared to the 44 469 vehicles sold in April last year. The April, 2016 export sales at 32 856 units reflected a gain of 9 254 vehicles or an improvement of 39,2% compared to the 23 602 vehicles exported in April last year.
Overall, out of the total reported Industry sales of 40 390 vehicles, an estimated 36 798 units or 91,1% represented dealer sales, 4% represented Industry corporate fleets sales, 3,1% represented sales to the vehicle rental Industry and 1,8% to government.
As had been the case since the end of last year, the new car market had continued to experience pressure during April, 2016 and at 26 077 units registered a decline of 3 949 cars or a fall of 13,2% compared to the 30 026 new cars sold in April last year.
Domestic sales of industry new light commercial vehicles, bakkies and mini buses at 12 192 units during April, 2016 reflected a marginal decline of 18 units or a fall of 0,1% compared to the 12 210 light commercial vehicles sold during the corresponding month last year.
Sales of vehicles in the medium and heavy truck segments of the Industry at 588 units and 1 533 units, respectively, had registered declines and, in the case of medium commercial vehicles, represented a sharp fall of 189 units or 24,3% and, in the case of heavy trucks and buses, a more modest decline of 77 vehicles or a fall of 5,3% compared to the corresponding month last year.
Industry new vehicle exports during April, 2016 had registered a substantial improvement rising by 9 254 vehicles or 39,2% from 23 602 vehicles exported in April last year to 32 856 exports in April this year. The momentum of new vehicle exports was expected to remain at or above current higher levels over the balance of 2016. With further reductions in vehicle imports in response to lower domestic sales and the expected strong growth in vehicle exports – the industry should continue to contribute positively to South Africa’s current account of the balance of payments.
Based on the industry’s general outlook and prevailing macro-economic conditions, the balance of 2016 was likely to continue to be characterised by subdued economic growth and pressure on consumer disposable incomes. The likelihood of double digit new vehicle price increases in response to earlier Rand weakness and the possibility of further interest rate hikes would combine to further pressurise consumers and businesses at a time of rising retrenchments across a number of sectors. Above-inflation new vehicle price increases, estimated at between 12% and 15% plus for the year, would put further downward pressure on sales of new motor vehicles. Despite the short term unfavorable outlook, a major source of encouragement emanated from the further substantial improvement, for the third month in a row, in the Purchasing Manager’s Index which at 54,9 signalled an expected improvement in business activity levels and manufacturing output over the medium term.
New vehicle industry production would continue to benefit from projected higher export numbers with 2016 export sales expected to expand to around 360 000 units.
