Naamsa commented that new vehicle sales had lost considerable momentum during the month due to the negative impact strike action had on production of locally manufactured cars and light commercial vehicles.
Aggregate industry sales at 41 875 units had registered an improvement of 5 960 vehicles or 16,6 per cent compared to the 35 915 vehicles sold during September 2009. The year-on-year monthly growth figure of 16,6 per cent was down substantially on the year-on-year improvement of 36,9 per cent registered during the previous month of August 2010. Aggregate export sales, as a result of the loss of production resulting from the aforementioned industrial action in the automotive sector, had declined in volume terms by 10,3 per cent compared to the corresponding month last year and reflected a massive fall of 36,0 per cent on the previous month of August 2010.
Overall, out of the total Naamsa reported industry sales of 35 097 vehicles, 79,1 per cent or 27 746 units represented dealer / retail sales, 13,9 per cent represented sales to the car rental industry, 3,7 per cent industry corporate fleet sales and 3,3 per cent represented sales to government.
Volkswagen South Africa, one of the manufacturers hardest-hit by industrial actions this year, still managed to accrue 1 939 sales in the entry-level segment thanks to the Polo Vivo – although Mike Glendinning, Volkswagen Group South Africa Sales and Marketing Director, noted that “while down on what was an exceptionally buoyant month of new passenger car sales in August, the September new passenger car market performed well, supported by seasonally strong demand from rental car companies.”
Malcolm Gauld, General Motors South Africa’s Vice President Sales and Marketing also noted the negative impact of the recent industrial actions had on September sales adding, “This action, together with a degree of pre-emptive purchasing ahead of the introduction of the emissions tax on the 1st of September placed pressure on the inventory mix available to vehicle buyers and will have resulted in sales being held over. Much like Volkswagen South Africa, GMSA also saw a strong performance in the entry-level segment thanks to 1 390 units of the Chevrolet Spark being purchased.
Aggregate industry new car sales during September, 2010 had received support by continued strong demand from the car rental industry. September 2010 new car sales at 29 993 units reflected an improvement of 6 191 cars or 26,0 per cent compared to the 23 802 new cars sold by the industry during September, 2009. However, total industry September new car sales reflected a decline of 10,5 per cent on the previous month of August, 2010 during which 33 525 new cars had been sold.
Sales of industry new light commercial vehicles, bakkies and minibuses at 9 916 units during September, 2010 reflected a fall of 608 units or 5,8 per cent compared to the 10 524 units sold during the corresponding month last year. New light commercial vehicle sales were also down by 8,1 per cent on the previous month of August, 2010, principally due to the impact of strike action. Conversely, the medium and heavy truck segment had registered gains and at 618 units and 1 348 units, respectively, had recorded an increase of 73 units or 13,4 per cent, in the case of medium commercials, and a gain of 304 units or 29,1 per cent, in the case of heavy trucks and buses – compared to the corresponding month last year.
Export sales of South African produced vehicles during September, 2010 at 12 530 vehicles showed a decline of 1 443 units or a fall 10,3 per cent compared to the 13 973 vehicles exported during September last year. However, September, 2010 export sales showed a decline of 7 075 vehicles or a sharp fall 36,1 percent from the 19 605 vehicles exported during the previous month of August, 2010. The decline was attributable to the strike action at the industry’s assembly plants during the second half of August, 2010, compounded by the strike in the automotive component industry during September, 2010.
McCarthy CEO Brand Pretorius highlighted another important trend in the market at present and this is the subdued demand for used vehicles. “One of the key reasons for this situation is the narrowing price gap between new and used cars, with the strong Rand and intense competition inhibiting new vehicle price increases while a growing number of low-priced entry level cars are proving an attractive proposition to buying a used car.
“New cars are, therefore, offering particularly good value for money at this point in time and finance also appears to be more readily available.
“Unfortunately the shortage of locally manufactured cars and light commercials will continue to constrain sales over the next quarter, despite the best efforts of the vehicle and component manufacturers to catch up. The backlog in production is affecting the important export markets as well as local dealers and this will be exacerbated with the compulsory plant shut down periods which are now only two and a half months away.
“Despite these negatives the supply of local and imported new vehicles should be sufficient for the new vehicle market to record growth by the end of the year of 20% over sales reported in 2009,” concluded Pretorius.