According to the latest National Association of Automobile Manufacturers of South Africa (Naamsa) report, new vehicle sales registered strong gains across all segments compared the corresponding period last year. Aggregate industry domestic sales climbed 9 937 units from 43 541 to 53 478 units, compared to March 2010, reflecting a 22,2 per cent increase on new vehicle sales on the first three months of last year.
A number of factors reportedly contributed to the strong recovery in sales of new cars over the past 15 months, including a robust recovery on the consumption side of the South African economy driven by the 6,5 per cent decline in interest rates since December 2008, which improved the financial position of consumers and businesses, and reduced the debt servicing costs of households and companies. This has been further bolstered by aggressive marketing campaigns, as well as concerns regarding future availability of Japanese products affected by the natural disasters in Japan, which may have contributed to some pre-emptive buying in the month.
The aforementioned improvement in economic activity levels also bode well for the new light commercial vehicle, bakkie and minibus segment, which displayed strong growth with 15 736 units sold during March 2011. This reflected an improvement of 2 809 units or 21,7 per cent compared to the 12 927 units sold in the corresponding month last year. Sales of vehicles in the medium and heavy truck segments of the industry, with the exception of the low-volume bus segment, had continued to improve further during March 2011 and, at 884 units and 1 691 units respectively, recorded a gain of 127 units or 16,8 per cent (in the case of medium commercials) and 298 units or 21,4 per cent (in the case of heavy trucks and buses) compared to the corresponding month last year. The ongoing gains in medium and heavy truck sales suggested an improvement in fixed investment sentiment in the economy.
Barring further geo-political shocks, such as the Japanese earthquakes and tsunamis, and the volatile political situation in Lybia, the global economy was expected to grow by about 4,5 per cent in 2011 and South Africa’s growth rate was projected to improve from 2,8 per cent in 2010 to about 3,5 per cent in 2011. This would lend support to domestic and export sales of new motor vehicles. Additional support should come from higher levels of consumer expenditure and public-sector infrastructural investment. The higher projected sales and corresponding production volumes should benefit the component-supplier industry and employment levels. However, rising inflationary pressures, mainly as a result of administrative price and taxation increases, could combine to put upward pressure on interest rates towards the end of 2011 and into 2012. Component and vehicle stock shortages as a result of the disasters in Japan, not to mention the lost working days attributed to the glut of public holidays in April, could take their toll in following months, but hopefully the impact on domestic sales and exports will only be temporary.
Manufacturer comments:
Ford Motor Company South Africa's strong sales in March reflects the positive sentiment in new vehicle sales in South Africa. The company’s strong LCV performance in March contributed to a 33,1 per cent increase on FMCSA’s February 2011 sales and 10,7 per cent up on the same period last year. Its top-three position in the LCV market continued to be supported by strong Ford Ranger sales (930 units).
“Sales in the passenger car segment for FMCSA continue to reflect the demand for entry-level vehicles, with the Figo performing well with sales of 1 204 units in March,” says vice president marketing, sales and service, Dean Stoneley. “The Figo’s recognition as a finalist in theSouth African Car of The Year competition will certainly continue to maintain Ford’s presence as a leader in this highly competitive space,” he says.
Nissan SA: Boosted by a strong performance in the passenger car market, Nissan South Africa’s new vehicle sales for March rose 23,4 per cent over February and were up 7,8 per cent for the first quarter compared to the same period last year. Total industry sales, as reported to Naamsa, improved by 10,7 per cent compared to February and were up 25 per cent over March 2010.
“We had a very good month,” said Johan Kleynhans, Nissan South Africa’s director of marketing, sales and aftersales. “With our passenger cars performing particularly strongly, we find ourselves back on track after a slow start to the year and an improved February. We enjoyed strong sales in individual model ranges, including Qashqai, X-Trail and NP300. Our NP200 light commercial vehicle enjoyed record sales of over 1 264 units.
“We are positive about prospects for continued improvement through the rest of the year and, while the country’s overall economic performance will largely determine the final outcome, we expect overall vehicle sales in 2011 to be well up on last year, with Nissan’s share rising accordingly.”