July vehicle sales showed solid gains growing by 18.3% year-on-year to 54 067 vehicles, the National Association of Automobile Manufacturers of South Africa (Naamsa) said.
“The July new vehicle sales reflected another encouraging performance with sales in all the major segments registering solid gains compared to the corresponding month last year,” said Naamsa on Thursday.
Additionally, the total domestic sales for the seven months of 2012 were 11.6% ahead of the corresponding seven months in 2011.
In July, aggregate industry new car sales remained strong and at 37 844 units, including Mercedes-Benz South Africa (MBSA) reflected an improvement of 18.2% or 5 817 units compared to the 32 027 new cars sold during July 2011. MBSA provides a single total sales number for passenger cars, commercial vehicles and export sales.
The year to date new car sales were 12.7% ahead of the corresponding seven months of 2011 while the daily selling rate in July had remained at five year high levels.
Support from car rental companies showed strong demand in the new car market. The car rental industry accounted for 16.5% of total sales with the car rental companies’ contribution expected to remain high over the next few months as the car rental industry continued to re-fleet.
Sales of industry new light commercial vehicles, bakkies and mini buses reflected strong growth and at 13 781 units reflected a 20.8 % increase compared to the 11 411 light commercial vehicle sales during the corresponding month last year.
Meanwhile the sale of vehicles in the medium and heavy truck segments of the industry at an estimated 823 and 1619 units respectively recorded an increase of 60 units or 7.9% in the case of medium commercial vehicles and a rise of 9% or 134 units in the case of heavy trucks and buses compared to July 2011.
Exports of South African produced motor vehicles (including MBSA export sales data) at 27 625 vehicles had registered an 11.6% improvement compared to the 24 763 vehicles exported in July 2011.
“The momentum of industry export sales should improve further over the balance of the year as various vehicle export programmes were ramped up, particularly exports of light commercial vehicles were expected to increase substantially,” noted the association.
The automotive sector continued to perform remarkably well despite prospects of further slowing in the domestic economy, said the association. Historically low interest rates, further improvement in vehicle affordability in real terms, improving demand for credit by both households and business is expected to support domestic sales.
“The recent 0.5% reduction in interest rates should also underpin sales of consumer durable products, particularly new motor vehicles. The highly competitive trading environment, attractive incentives and new model introductions would also support demand. In terms of domestic sales, the industry remained on track during 2012 for growth of around 10%.”
GMSA captures 11,8% of market in July
General Motors South Africa (GMSA) reported sales of 6 402 vehicles for July for a market share of 11,8%. This performance came in on the back of higher demand for new vehicles that saw a total of 54 067 deliveries reported to NAAMSA which was 18,3% up on the sales recorded for July 2011.
“Sales recorded in July pushed the year on year growth in the motor industry to 11,6%, somewhat above the 10% levels suggested by industry forecasters early in the year”, says Malcolm Gauld, GMSA’s Vice President Sales and Marketing.
“It is our view that this higher than anticipated growth is unlikely to be sustained through to the end of the year. It is more likely that the industry will see month-on-month growth in single digits in the coming months in a softer market.
“The past month again saw relatively strong sales through the Government and Rental channels, as the process of fleet renewals continues. However, the Dealer Channel performance mirrored the prior month’s volumes, with widespread industry offers targeting the retail customer.
“The re-distribution of sales in the passenger vehicle segment continues with a focus on the ‘A” and ‘B’ segments where competition is intense. GMSA is well represented in this market with its Chevrolet Spark, Aveo, and Sonic products.
“In the passenger market sector Chevrolet products performed well in July with the Cruze ranked 8th in sales and the Aveo 9th. On the back of this solid performance the Chevrolet brand has experienced volume growth of 9% year-on year.
“Sales of light commercial vehicles were well up on July 2011 with growth of just under 21% experienced. That has raised year on year growth for this sector up to 9,7% – an encouraging indicator for commercial activity. In this sector the new Chevrolet Utility continues its segment leadership achieving sales of 1 747 units for 56% segment share.
“A positive for the industry going forward is the reduced cost of finance. This is being mitigated by the continued high cost of fuel and the threat of imported cost pressures.
Volkswagen Group South Africa maintains its top position in the new passenger car market
During July 2012, 37 844 new passenger cars were sold in South Africa. The market increased by 5.4% when compared to the June 2012 market. It grew by 18.2% when compared to July 2011, bringing the January to July 2012 market to a level 9.7% above the same period for 2011.
“In July, the new car market performed in line with our expectation with continued buoyancy in sales characterising the performance of the market. This was supported by demand from rental car companies, which accounted for around 16 percent of the new car market in July. The selling rate of new cars per day during the month increased to the second highest level for 2012,” said Mike Glendinning, Director: Sales and Marketing, Volkswagen Group South Africa.
“Volkswagen Group South Africa is pleased to start the second half of 2012 in a top position in the passenger car market. Polo Vivo continues to be our top perfomer and in July it was once again the best-selling Brand in South Africa with 3 449 units. Polo was the second best-seller in the passenger car market with 2 459 units. Both brands have been market leaders in the A0 segment for past seven months in spite of the introduction of new models in the most competitive segment in the country,” said Glendinning.
The Audi Brand sold 1 433 units its highest sales ever recorded in July and increased its share of the premium market to 21.6%. The top seller was the A4 Sedan/Avant which sold 429 units.
Volkswagen Commercial Vehicles sold 720 units and 477 of these units were Amarok single and double cab models.
“The continued strength in demand for new cars is interesting given that most indicators are reflecting a slowdown in economic activity with almost all analysts and institutions having reduced their forecasts of economic growth for the year. The surprise reduction in interest rates during July may have stimulated last months sales. This interest rate reduction as well as the ongoing decline in real new vehicle prices should have a positive effect on vehicle sales,” added Glendinning.
“Despite a possible slowdown in the rate of growth in the new car sales cycle during the second half of 2012, during the next three months the market will in all probability be strongly supported by sales to rental car companies, a regular seasonal phenomenon, and the new car market for the full year could well end up around 10 percent higher than the market recorded in 2011,” concluded Glendinning.