Despite the slow start to 2018, the National Association of Automobile Manufacturers of SA (Naamsa) predicted that moderate economic growth of 1.5% and above could increase full-year new-vehicle sales beyond the 2%-4% forecast previously. If price increases continued to lag behind the inflation rate, this would also drive the market.
“The decline in rental sales is a seasonal trend, and naturally follows the massive growth in the rental channel last year,” said Ghana Msibi, executive head for sales and marketing, WesBank Motor Division. “While the rental channel is an important contributor to the new vehicle market, we anticipate this sales slump to level out rather than set the tone for the year.”
Although the overall market declined, positive consumer sentiment saw an increase in sales through the dealer channel. Dealer sales grew 1.8%, with year-on-year sales for passenger cars and light commercial vehicles (LCVs) growing 1.1% and 2.3%, respectively.
This trend was also reflected in WesBank’s internal data. Consumer demand – as measured by the volume of finance applications received – grew 9%, year-on-year, for new vehicles. Similarly, demand for used vehicles grew 5%.
Vehicle exports, ultimately disappointing in 2017, raced to a fast start in 2018. January's figure of 14,212 was 22% ahead of last year's 11,651. With strong growth expected from many global markets in coming months, Naamsa said it expected an 11% increase on last year's shipments, to what would be an all-time export record of 366,050.
“The political outlook is favourable following the ANC’s December conference, which has changed the macroeconomic outlook for the country. The rand has already strengthened, allowing new vehicle price inflation to continue slowing,” said Msibi. “OEMs are now in a position to continue offering marketing incentives that stimulate sales, with the result being positive consumer sentiment – and that’s excellent news for the new vehicle industry.”
WesBank will deliver its annual new vehicle industry sales forecast at the WesBank SAGMJ Car of the Year banquet in March 2018.
