ZIGZAGING SALES CONFUSE MARKET

Vehicle sales in South Africa in September showed an expected, significant decline compared to sales recorded in August, according to the sales figures released today by the National Association of Automobile Manufacturers of SA (Naamsa). There was a drop of 9.5% in the overall market, which fell to 29 465 units.




Car sales declined by 10.5% and light commercials by 8.1%. However, on a year-to-date basis the overall vehicle market is still an encouraging 24% ahead of the situation a year ago.


According to the CEO of McCarthy, Brand Pretorius, the key reasons for the decline were firstly the pre-price increase buying that took place in August prior to the introduction of the Carbon Emissions Tax on 01 September, as well as the shortage of stock as a consequence of the two strikes which affected local vehicle production adversely in August and September.


“The latter is undoubtedly the more important reason, as evidenced by the waiting lists at dealers, who now have virtually no stock of the popular, locally manufactured model ranges,” explained Pretorius.


He added that the shortage of locally-produced vehicles enabled vehicle importers such as Associated Motor Holdings (AMH) and Amalgamated Automobile Distributors (AAD) to increase market share significantly. 


“In fact, the combined AMH/AAD entity moved into the number one position in the passenger vehicle market for the first time ever in September, with a market share of 21.1%” said the McCarthy CEO. “In terms of overall vehicle sales they occupied second position with an all-time high market share of 16.2%. On a year-to-date basis they have increased their sales by 86.5% from 22 974 units to 42 842 units.”


Brand Pretorius went on to highlight another important trend in the market at present and this is the subdued demand for used vehicles. “One of the key reasons for this situation is the narrowing price gap between new and used cars, with the strong Rand and intense competition inhibiting new vehicle price increases while a growing number of low-priced entry level cars are proving an attractive proposition to buying a used car.


“New cars are, therefore, offering particularly good value for money at this point in time and finance also appears to be more readily available.


“Unfortunately the shortage of locally manufactured cars and light commercials will continue to constrain sales over the next quarter, despite the best efforts of the vehicle and component manufacturers to catch up. The backlog in production is affecting the important export markets as well as local dealers and this will be exacerbated with the compulsory plant shut down periods which are now only two and a half months away.


“Despite these negatives the supply of local and imported new vehicles should be sufficient for the new vehicle market to record growth by the end of the year of 20% over sales reported in 2009,” concluded McCarthy CEO Brand Pretorius.


STORY BY WILKEN COMMUNICATIONS