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The National Association of Automobile Manufacturers of South Africa (Naamsa) said domestic new vehicle sales started the year “on a weak note” with the declining trend in the new vehicle market continuing into January 2020.

Reflecting on the new vehicle sales statistics for the month of January 2020 released for public consumption via the website of the Department of Trade and Industry, Naamsa confirmed aggregate domestic sales at 39 475 units showed a decline of 3 481 units or 8,1 percent from the 42 956 vehicles sold in January 2019.

Interestingly, BMW Group South Africa, from the beginning of January 2020, has implemented a “new sales reporting model” and has not reported new vehicle sales for the month of January 2020. The January 2020 new vehicle sales report, therefore, excludes BMW new vehicle sales for the moment.

Export sales at 11 373 units also registered a fall of 6 877 units or a decline of 37,7 percent compared with the 18 250 vehicles exported in January last year.

Overall, out of the total reported industry sales of 39 475 vehicles, an estimated 32 050 units or 81,2 percent represented dealer sales, an estimated 13,5 percent represented sales to the vehicle rental industry, 3,1 percent to industry corporate fleets and 2,2 percent to government.

The January 2020 new passenger car market had registered a decline of 1 500 cars or a fall of 5,1 percent to 28 116 units compared to the 29 616 new cars sold in January last year. The car rental industry’s contribution accounted for a substantial 17,6 percent of new car sales in January 2020.

Domestic sales of new light commercial vehicles, bakkies and mini-buses at 9 791 units during January 2020 had recorded a decline of 1 909 units or a fall of 16,3 percent from the 11 700 light commercial vehicles sold during the corresponding month in 2019.

Sales in the medium and heavy truck segments of the industry also registered declines and at 503 units and 1 065 units, respectively, reflected a fall of 44 vehicles or a decline of 8,0 percent in the case of medium commercial vehicles, and, in the case of heavy trucks and buses a fall of 28 vehicles or a decline of 2,6 percent compared with the corresponding month last year.

The January 2020 export sales number represented a weak performance with export sales at 11 373 vehicles reflecting a substantial decline of 6 877 units or a fall of 37,7 percent compared with the 18 250 vehicles exported in the same month last year. The momentum of vehicle exports over the course of 2020, however, should increase further and industry export sales for the year could reach around 390 000 units compared to the record 387 125 vehicles exported last year.

Sustained weak demand for domestic new vehicles continued in January 2020 on the back of depressed consumer and business confidence, weak economic growth, record-high unemployment and Eskom’s ongoing electricity supply crisis. The new vehicle market is expected to face further consolidation until South Africa breaks out of its low growth trap and the economy is put on a higher growth path. However, the likelihood of more regular load shedding in the foreseeable future dim prospects for a recovery in the coming months.

Although vehicle exports declined in January, Naamsa said it is anticipated the upward momentum on the export side would continue into 2020 following consecutive record export years. Industry vehicle production levels would continue to benefit from strong vehicle export sales.