The South African new vehicle industry continued to show resilience in May in the face of increasingly difficult market conditions.
With fuel prices rising overnight to record highs, a substantial 0.5% increase in prime interest rates during the month and the latest wave of flooding in KwaZulu Natal (KZN), New vehicle sales also continue to face ongoing challenges from general economic pressure. amid the pandemic, financial services firm WesBank noted.
Still, sales managed to achieve a small margin of growth in May as the market pushes ahead with its outlook for a slow recovery, he said.
According to Naamsa | According to the Automotive Business Council, new vehicle sales rose 2.1% in May to 39,177 units from the same period last year. That was just under 2,000 more units than those sold last month.
“In these uncertain times where volatility is a recurring theme, May presented unnecessary additional challenges to the market but fought bravely for the recovery,” said Lebogang Gaoaketse, head of marketing and communications at WesBank. “Supply constraints have also been amplified by the impact of flooding in KZN on one of the largest producers in the market, not to mention the continued disruptions to logistics.”
Once again, the passenger car market took the majority of the attention, with segment sales up 13.8% year-on-year to 27,437 cars. “This is likely due to significant restrictions in the supply of locally manufactured light commercial vehicle (LCV) volumes, which continue to distort market performance,” Gaoaketse said.
LCV sales fell 22.6% to just 9,221, although that was only slightly less than units sold in April.
The rental market posted a 6.5% drop in sales, but retailers held up better with sales through the dealer channel up 4.5%.
Dealer performance in the passenger car and utility vehicle segments outperformed the market, with growth of 18.9% and 21.1% respectively. “It continues to be reassuring to the market that demand remains in the consumer space,” Gaoaketse said.
“This request is displayed in WesBank’s own data, with requests increasing by 9.7% year-on-year,” Gaoaketse said. “The used-vehicle market remains robust, with more than double the volume of applications in the used-vehicle market than in the new-vehicle market, as consumers continue to struggle with inventory availability and the affordability.”
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