It’s another month of increased new vehicle sales as August comes to a close. Naamsa says that the gradual monthly recovery in the domestic new vehicle sales volumes continued during the month but that the decline, compared with the pre-COVID-19 first month of 2020, was in line with industry expectations.
Aggregate domestic sales for August at 34 784 units reflected a decline of 5 629 units, or 13,9 per cent, from the 40 413 vehicles sold in January last year. Export sales recorded a second consecutive month of solid growth in January 2021 and at 22 771 units reflected an increase of 6 468 units, or 39,7 per cent, compared to the 16 303 vehicles exported in January 2020.
Overall for August, out of the total reported industry sales of 34 784 vehicles, an estimated 28 716 units, or 82,6 per cent, represented dealer sales, an estimated 11,4 per cent represented sales to the vehicle rental industry, 3,5 per cent sales to government, and 2,5 per cent to industry corporate fleets. The January 2021 new passenger car market at 23 853 units had registered a decline of 5 220 cars, or a fall of 18,0 per cent, compared to the 29 073 new cars sold in January last year. The car rental industry accounted for a sound 16,1% of car sales in January 2021.
Naamsa says for the first quarter of 2021 trading conditions in the new vehicle market are expected to remain challenging due to slow demand compared with the pre-COVID-19 first quarter comparison, exchange rate volatility and the negative impact on household expenditure by fuel and electricity price increases.
However, considering the close correlation between new-vehicle sales and the country’s GDP growth rate, the Reserve Bank’s forecast of a domestic economic growth rate of 3,6 per cent for 2021 presents a favourable scenario for a sound rebound of the new vehicle market in 2021, from the exceptional low base in 2020.
It should be noted that the 2020 new vehicle market recorded its lowest aggregate sales total in 18 years. The macroeconomic effects of COVID-19 will, therefore, continue to undermine business and consumer confidence and inhibit growth over the medium term. Although the current low interest rates, coupled with low inflation, could be regarded as building blocks to stimulate the new vehicle market, a full recovery to pre-COVID-19 new vehicle sales levels could take around three years.
