Despite leaving the national lockdown behind for the last few months, the South African vehicle market continues to struggle as it slowly tries to recover. Here are the numbers that matter from November’s vehicle sales data.
Compared with October 2020, 563 more vehicles were sold in November 2020. A total of 39 315 vehicles were sold in stark contrast to November 2019 where 44 670 vehicles were sold. This represents an annual decline of 12% which is the closest the market has come to last year’s sales figures since March 2020.
Exports also remain slow to reach last year’s levels as those figures were also down by 7.6% vs the same period last year.
Aggregate new vehicle sales at 39 315 units down by 12% (-5 355 units) compared with November 2019
+1.4% (563 units) up on October 2020
New passenger car sales of 25 707 units down by 18.1% (-5 696 units) compared with November 2019
-4% (-1 091 units) down on October 2020
Light Commercial Vehicle (LCV) sales of 11 243 units up by 5.3% (+567 units) compared with November 2019
+14.2% (1 599 units) up on October 2020
Exports of 34 588 units down by 7.6% (-2 622 units) compared with November 2019
+3% (+1 114 units) up on October 2020
Toyota – 9 441 units
Volkswagen – 6 950 units
Ford – 3 895 units
Nissan – 2 744 units
Hyundai – 2 609 units
Toyota Hilux – 2 913 units
VW Polo Vivo – 2 234 units
Ford Ranger – 2 100 units
VW Polo – 1 815 units
Toyota Fortuner – 1 488 units
Sales outlook
WesBank CEO, Chris de Kock says new blended working arrangements have reduced the demand for consumers to own cars.“For those who do, it is likely that their annual mileage will reduce considerably, increasing the time between replacement cycles. The South African economy will simply not be able to support a market of 500,000 vehicles per year,”says De Kock.
Passenger car sales were 18,1% lower than November 2019, recording 25,707 unit sales. This is 5,696 units less than November last year and 989 units less than last month, potentially indicating shifts in the market in terms of demand. Dealers will have been relieved to only see a 5,9% decline in consumer demand in the sector as consumers continue to show renewed appetite for vehicle purchases.
Bigger news was the 5,3% growth in Light Commercial Vehicle (LCV) sales to 11,243 units. This is a significant 1,590 more units than October and is the first positive growth sales number since lockdown began. Consumer demand at dealer level was slightly softer, but still 2,8% up on November last year.
De Kock says that the shift in market demand is the result of two significant trends, both centred around affordability.“Consumers are clearly seeking to reduce their monthly instalment by buying a more affordable vehicle,”says De Kock.“The evidence of this can be seen in the market growth of the new car segment offering lower priced vehicles where customers seem willing to substitute high profile brands for more practical and affordable options.”
Also contributing to this trend is in the increase in new vehicle prices, now averaging close to double digit inflation this year.“The other trend is the shift towards the used car market, again driven mostly by the buydown effect,”says De Kock.
Year-to-date sales reached 343,276 units at the end of November, down 30,6% on the same period last year.
“The low interest rate environment is expected to stay for quite some time, allowing consumers an ideal opportunity to combat affordability and many are taking the opportunity to fix their rates in their finance agreements,”says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank Vehicle and Asset Finance..“A vehicle remains a big-ticket purchase consideration for any household budget and is consequently a key indication of confidence in the market. November sales show a more positive picture of that confidence slowly returning.”
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