Vehicle sales in June showed a strong performance, according to the National Association of Automobile Manufacturers of South Africa (Naamsa).
“The June new vehicle sales reflected another relatively solid performance with sales in all the major segments registering double digit growth compared to the corresponding month last year,” said the association today.
June 2012 aggregate industry domestic sales had improved by 7 015 units or 15.6% to 51 891 vehicles from 44 876 units in June 2011.
Total domestic sales for the first half of 2012 remained 10.5% ahead of the six months in 2011. June 2012 export sales at 27 061 vehicles had registered modest growth rising by 1 767 units or 7%.
Overall, out of the total detailed (disaggregated) reported industry sales of 49 108 vehicles (excluding Mercedes Benz SA), 86.2% or 42 340 units represented dealer sales, 5.9% represented sales to the vehicle rental industry, 4.1% to government and 3.8% to industry corporate fleet sales. From a seasonal perspective, sales to car rental companies, during the next three months, should improve as the car rental industry started to re-fleet.
“Assisted by new model introductions, aggregate industry new car sales during June, 2012 had remained relatively strong and at 35 918 units (including Mercedes Benz SA) reflected an improvement of 4 480 units or 14.3% compared to the 31 438 new cars sold during June 2011. Year to date new car sales were 11.8% ahead of the corresponding six months of 2011. The daily selling rate during June, 2012 had remained at five year high levels,” noted Naamsa.
Mercedes Benz SA provides a single total sales number for passenger cars, commercial vehicles and export sales. Estimates for Mercedes Benz SA were used based on historical sales trends and forecasting techniques.
Sales of industry new light commercial vehicles, bakkies and mini buses including estimates for Mercedes Benz SA had reflected a strong growth and at 13 421 units in June 2012 reflected an increase of 2 425 units or 22.1% compared to the 10 996 light commercial vehicle sales during June 2011.
Sales of vehicles in the medium and heavy truck segments of the industry at an estimated 819 and 1 733 units, respectively, had recorded an increase of 11.7%, in the case of medium commercial vehicles, and a rise of 1.4%, in the case of heavy trucks and buses, compared to the corresponding month last year.
Exports of South African produced motor vehicles, including Mercedes Benz SA export sales data, during June, 2012 at 27 061 vehicles had registered an improvement of 1 767 units or 7% compared to the 25 294 vehicles exported in June last year.
Naamsa said the momentum of industry export sales should improve over the balance of the year as various vehicle export programmes were ramped up.
“Overall, the industry’s export performance would remain a function of the direction of the global economy. Vehicle exports into Europe were likely to continue under pressure as a result of the recession in the Eurozone but these could be offset by higher exports to African countries and Australia,” it noted.
Though there were indications of further slowing in the domestic economy, new vehicle sales continued to perform remarkably well with several factors expected to support the domestic market.
These included historically low interest rates, continuing improvement in vehicle affordability in real terms, improving demand for credit by households and businesses as well as further pre-emptive buying by consumers in response to the weaker exchange rate in recent months.
“In terms of domestic sales, the industry remained on track during 2012 for single digit growth in the range of 8% to 10% over 2011. As far as export sales were concerned, there remained some uncertainty regarding the extent of the potential impact from economic turbulence in Europe and softer growth in other International markets.”
Over in Uitenhage Volkswagen Group South Africa maintained its leadership position in the new passenger car market for the sixth consecutive month by reporting total sales of 7 754 units and market share of 21.6% for June 2012.
“The new passenger car market once again performed very well but in line with expectation. New car sales in June were supported by sales to rental car companies, a seasonal phenomenon between June and October each year. That aside the reported selling rate of new cars per day in June was 1450 units, an increase of 7.3% when compared to May 2012,” said Mike Glendinning, Director: Sales and Marketing, Volkswagen Group South Africa.
“Volkswagen Group South Africa ended the first half of 2012 in a top position in the new passenger car market. In June, Polo Vivo was again the best-selling Brand with 2 633 units and Polo was the second best-seller with 2 326 units. Both brands maintained their leadership positions in the A0 segment in spite of the introduction of new models in the most competitive segment in the country,” said Glendinning.
The Audi Brand reported its best June sales to date of 1 351 units. A4 Sedan/Avant sold 426 units.
Volkswagen Commercial Vehicles sold 769 units and 517 of these units were Amarok single and double cab models.
“Looking ahead, the challenges facing the economy have resulted in growing speculation that the Reserve Bank may reduce interest rates later in the year. This has been further encouraged by the inflation rate of 5.7% in May which has fallen back into the target range, an unexpected development that will also support the real disposable income of households,” added Glendinning.
“Demand for new passenger cars during 2012 remains on track for single digit growth over 2011. The demand is being supported and encouraged by a continued decline in real new car prices, low interest rates, improving demand for credit and, possibly by a buy-ahead of probable price increases on the back of a sharply weaker exchange rate in recent months,” concluded Glendinning.
In Sidwell GMSA reported total sales up by 15.6% on June 2011 at 51 891 units for a market share of 10,7%.
“The first six months of the year have seen a higher than initially anticipated level of sales activity in the new vehicle market,” says Malcolm Gauld, GMSA’s Vice President, Sales and Marketing. “June sales boosted year on year growth over the 10% upper limit that most forecasters predicted.
“However, a closer analysis of the market performance in June shows a subtle but important shift in the distribution of sales between the dealer and other channels. Through the first five months of the year activity within the dealer channel was indicative of a high level of private buyer participation in the market. During June the balance changed with the dealer channel lower than the previous month’s volume and with the rental and government channels correspondingly higher – both month-on-month and year-on-year. The dealer channel volume has also been propped up by continued intense competitor activity and new product introductions.
“A trend that has become evident through the first six months of the year is a re-distribution of passenger vehicle sales into the bottom end of the market with significant shift of activity in this highly competitive area.
“Within the light commercial sector the Chevrolet Utility continued to place its stamp on the sub-1 ton segment of the light commercial vehicle market with 1 743 sales as the second most popular pick-up overall. The end of June saw this model range extended with the addition of three diesel variants together with a specification upgrade for some petrol models including ABS brakes for the 1.4 Base AC derivative.”
“We foresee a somewhat softer market in the second half of the year. The forecasts for growth for the year of between 5% and 10% still stand with the potential to deliver on the upper end of that scale a weak possibility.
Alan Straton
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