McCarthy Limited chief executive Brand Pretorius says South Africa’s new vehicle sales figures for July offer evidence that the downward trend in new vehicle sales has been arrested. We bring you a round-up of industry reaction to the latest figures as supplied by Naamsa.Total new vehicle sales of 34 503 units reported to the National Association of Automobile Manufacturers of South Africa (Naamsa) and Associated Motor Holdings (AMH) showed an encouraging 4,3 per cent increase on sales recorded during June 2009.
Pretorius said feedback from the retail group’s dealer network indicated that some companies in the fleet sector of the market had lifted the ban on capital expenditure, with the result that a number of vehicle fleets were in the process of being renewed. In fact, passenger car sales were being underpinned by demand from car rental companies that were fleeting up.
Compared with the year-to-date decline in total new vehicle sales of 32,7 per cent, sales during the month of July showed a lower decline of 25,9 per cent on figures from the corresponding month last year.
It was estimated that sales to car rental companies accounted for almost 15 per cent of all the reported passenger vehicle sales last month. “Unfortunately demand from private individuals remains subdued, as potential customers remain cautious with regard to taking on new debt.” Pretorius added.
Light Commercial Vehicle sales declined by 23 per cent compared with the same month last year – but combined commercial vehicle sales in July improved by 5,7 per cent over June, providing further evidence of the increase in fleet buying.
“The increase in demand for commercials is to be expected, as it is in line with the modest increase in the leading indicator namely business confidence, which was announced last month,” he added.
Meanwhile, Renault SA achieved a 2,64 per cent market share in July 2009. Up 1,7 per cent on July last year – and it reflected the French marque’s best result since June 2007.
“We have enjoyed a consistent increase in sales since the beginning of the year and are confident that, with more models to be launched before the end of this year, the trend will continue and even amplify,” said Régis Fricotte, Vice-President of Marketing at Renault South Africa.
Although the Ford Motor Company of Southern Africa (FMCSA) sales declined by 10,1 per cent versus June’s figures, FMCSA vice president for sales and marketing, Jacques Brent noted “the market was beginning to show signs of stability near the bottom of this difficult cycle”.
Fiesta remained the firm’s best-performing passenger model, while Ranger reflected a 7 per cent increase in sales. This decrease was largely due to supply constraints around new Fiesta and low market participation in the government and rental channels, the company commented.
“While we cannot expect a turn-around in the near term, it is reassuring for retailers that volumes are less volatile, and on a marginally positive trend currently, which will assist them greatly in their planning,” Brent concluded.
“July was GMSA’s second best month this year, with 4 109 units sold resulting in a share achievement of 13,4 per cent,” said Malcolm Gauld, GMSA’s vice president for sales and marketing. He added that the Opel Corsa Utility had continued its run as the best selling sub-one ton pick-up in South Africa for the 52nd consecutive month. .
“Given the additional selling days in July, it’s too early to say the industry has stopped the roller coaster ride downwards, but we are encouraged by the performance of the commercial segments. August month will be an indicator,” Gauld was quoted as saying.
Toyota SA president and chief executive Johan van Zyl said the Prospecton-based company believed “the market may have been stronger than was evident. Strike action during the last week of July will have impacted negatively on new vehicle registrations and constrained volumes to some extent. (However) our dealers are reporting an increase in showroom traffic. Interest rate cuts usually take quite some time to translate into market activity. At last, the aggressive rate cutting cycle seems to be having a positive impact.
“The latest inflation data is positive and could provide scope for further interest rate reductions. We are also entering time in the year when there is typically an increase in fleet activity so there are positive indicators for the market in the months ahead, at least for stability in sales,” Dr Van Zyl predicted.
VWSA secured a 22,7 per cent market share in July and consolidated its number one position in the passenger car segment, but Mike Glendinning, the manufacturer’s director of sales and marketing, noted that “despite the demand from rental car companies, the selling rate of total new passenger cars per day fell by 4,2 per cent compared with that of June.”
“The turning point in the cycle will probably still take some months to materialise having been delayed by the level of increases in new car prices that have occurred so far in 2009. This has been exacerbated by inordinately strict bank lending criteria that have significantly reduced access to finance for prospective new car buyers.”
“In these circumstances, while the new car sales cycle may bottom out in coming months the rate of recovery will undoubtedly be muted and the market for the full year of 2009 is likely to end up more than 25 per cent down on 2008,” concluded Glendinning.
Download a summary of the latest new vehicle sales statistics as supplied by Naamsa.
