Vehicle sales lost momentum in February rising by 1.6%, the National Association of Automobile Manufacturers of South Africa (Naamsa) said on Monday.
“Following the strong start to the year, the underlying momentum had weakened slightly during the month of February, 2013,” said Naamsa.
In January new vehicle sales registered substantial gains growing by 14.1% compared to the 48 202 vehicles sold in January last year.
Aggregate new vehicle sales at 53 220 registered an improvement of 832 vehicles or a gain of 1.6% compared to the 52 388 vehicles sold in February last year.
In February 2013, export sales performed well at 27 611 units, an improvement of 5057 vehicles or a gain of 22.4% compared to the 22 554 vehicles exported in February 2012.
Overall, out of the total detailed (disaggregated) reported industry sales of 51 046 vehicles (excluding Mercedes-Benz South Africa), 85.6% units represented dealer sales, 6.6% represented sales to the vehicle rental industry, 3.8% to government and 4% to industry corporate fleets.
The association noted that taking account of the daily selling rate, the new car market had performed reasonably well in February 2013 and at 36 666 units, including Mercedes-Benz sales, reflected an improvement of 304 units or 0.8% compared to the 36 362 new cars sold in February last year which had benefited from one additional selling day.
“Exchange rate weakness probably contributed to pre-emptive buying by consumers to avoid higher expected new vehicle prices,” said Naamsa.
Including estimates for Mercedes-Benz commercial vehicle sales by segment – sales of industry new light commercial vehicles, bakkies and mini buses at 14 190 units during February, 2013 reflected an increase of 636 units to the 13 554 light commercial vehicles sold during the corresponding month last year.
The sale of vehicles in the medium and heavy truck segment at an estimated 868 and 1 496 units respectively had recorded a decline of 71 units in the case of medium commercial vehicles and a decline of 37 units in the case of heavy trucks and buses compared to February 2012.
The overall near term outlook for the automotive sector remained reasonably positive, said Naamsa, adding that factors that would continue to support domestic sales included the low interest rate environment.
The highly competitive trading environment with attractive incentives, low debt servicing costs, high technology new model introductions and above average demand by car rental companies also form part of factors that would continue to support domestic sales.
“Rising inflationary pressures would limit growth in real disposable income which, together with generally anticipated rising new vehicle prices as a result of the weaker exchange rate and the impending increase in CO2 vehicle emissions tax, could result in further moderation in the rate of growth in sales over the balance of the year. Industry production, largely as a result of higher new vehicle exports, should register strong growth in 2013,” said Naamsa.
Uitenhage based Volkswagen Group South Africa maintained its leadership in the passenger car market:
VWSA maintained its leadership in the South African car passenger market with the total sales of 8 516 units and a market share of 23.2% in February 2013.
Polo Vivo was the top-selling passenger car in February with 2 742 units delivered to customers. The new Golf had a positive start with the delivery of 767 units in its first month of reporting.
Audi recorded its best ever February sales with the total sales of 1 512 units. The A4 was the best-seller with 459 units.
Volkswagen Commercial Vehicles sold 519 units in the light commercial vehicles segment and 292 of these units were Amarok single and double cabs.
“The sale of the new passenger cars through dealers, which has been weak for the past three months, recovered quite strongly in February. The sales grew by an estimated 16% on January 2013 and 4.9% up on February 2012. The performance of the dealer market in February halted the decline in the dealer new car sales cycle which has been weakening since August 2012. The year–to-date new passenger car dealer market for 2013 is now 0.9% up on the January and February dealer market in 2012, ” said Mike Glendinning, Director: Sales and Marketing at Volkswagen Group South Africa.
“While the increase in the CO2 emissions tax announced in the 2013 national budget will have an slight impact on new car pricing and probably on the structure of demand, on balance, the new car market will continue to be supported by declining real new car prices and low interest rates promoting new car affordability, ” added Glendinning.
Port Elizabeth based GMSA expects to benefit from the trend by consumers to buy down to vehicles with lower operating costs:
Vehicle sales numbers released by NAAMSA today provide a more realistic snapshot of market conditions with 2013 well on its way. February sales were up just 882 units on the same month last year with a total of 53 220 new vehicles delivered for the month.
“The new year had a bumper start with some growth in January in what many considered an overheated, or at least distorted market performance, ” says Malcolm Gauld, GMSA’s Vice President Vehicle Sales, Service, and Marketing. “February delivered an expected cooling of market conditions that brought with it a more realistic view of current trading conditions.
“February 2013 showed an increase of just 882 units in total sales compared the previous year, an improvement of 1,6%. This brought the year-on-year growth back to 7,5%, a figure closer to most expectations of industry commentators but perhaps still on the high side of what we can expect at year-end.
“An encouraging aspect for the month was the relatively strong demand for light commercial vehicles with sales up 4,7% on February 2012 and a healthy 11,5% year to date. This market sector will continue to be driven by intense marketing support linked to new product arrivals. A key player here will be the exciting new Isuzu KB that will debut later this month. The Chevrolet Utility was a strong performer as segment leader in the Sub-1 Ton LCV segment with 1 484 deliveries for the month.
“By comparison, the passenger vehicle market grew by just 0,8% with sales of 36 666 new cars during February (304 units up on Feb 2012). Amongst passenger vehicles the new Chevrolet Trailblazer continued to establish itself in the medium sized SUV sector with 281 sales for the month.
“Private buyers were the dominant channel in February accounting for 82% of all sales compared to only 74% for January.
“The trend of buying down to smaller vehicles with lower total operating costs – an area where our Chevrolet brand is particularly strong – continues and is likely to be fed by spiralling fuel costs and secondary motoring cost inputs are also expected to build during the year. That said, the outlook for moderate growth in the motor industry to year-end remains on track although this may trend towards the lower limit of current forecasts. “
Alan Straton
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