New vehicle sales sustain steady improvement
August 5, 2009
By Roy Cokayne
Total sales of new vehicles last month posted a third consecutive month-on-month increase, indicating that the market has bottomed, or was close to doing so.
Tony Twine, a motor industry analyst and director of Econometrix, said yesterday that July's sales had been mixed across the various segments but signalled the market was securing the bottom point of the cycle while not necessarily turning upwards at any great rate.
"It coincides with a U-shaped economic recovery," he said.
Twine said new vehicle sales trends had been coinciding with a lot of recent data, which indicated that economic conditions were, by the middle of the second quarter, not getting worse or that they were getting worse more slowly. This was typical of an economy "looking for a turning point", he said.
Figures released by the National Association of Automobile Manufacturers of SA (Naamsa) yesterday showed that new car sales dropped by almost 28 percent to 18 818 units last month from the 25 999 units sold in July last year.
Sales, including those by Associated Motor Holdings, which does not fully report to Naamsa, increased by 4.3 percent from June.
Sales of new light commercial vehicles, bakkies and minibuses declined by 22.5 percent year on year to 10 179 units, medium commercial vehicles by 46 percent to 558 units and heavy trucks and buses by 46 percent to 1 176 units.
Nico Vermeulen, Naamsa's executive director, described last month's new vehicle sales figures as "dismal", adding that all sectors of the industry were continuing to experience severe sustainability challenges. Total year-to-date new vehicle sales at 224 706 units are 32.7 percent lower than the 334 003 units sold in the first seven months last year.
Jacques Brent, the vice-president for sales and marketing at the Ford Motor Company of Southern Africa, said that while a turnaround could not be expected in the near term, it was reassuring for retailers that volumes were less volatile and currently on a marginally positive trend.
Johan van Zyl, the president and chief executive of Toyota South Africa, said the sales statistics provided a further indication that vehicle purchases were stabilising at a new, albeit low, level.
Mike Glendinning, the director of sales and marketing for Volkswagen South Africa, said sales of new cars last month had been disappointing despite the demand from rental car companies.
Brand Pretorius, the chief executive of McCarthy, estimated that sales to car rental companies had accounted for almost 15 percent of passenger vehicle sales last month.
He said some signs of a gradual recovery in the demand for new vehicles were starting to emerge, especially in the fleet sector.
Marcel de Klerk, the managing executive of Absa vehicle and asset finance, said vehicle finance applications had increased by almost 8 percent month on month, monthly repossessions had declined by almost 15 percent, arrear trends had been improving since April and banks might start increasing their approval ratios.
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