JOHANNESBURG, South Africa – April’s glimmer of hope for new vehicle sales was short-lived as the month of May resumed the slump and status quo of steady decline.
The National Automobile Association of South Africa has reported Industry sales for May down by 5.7% to 40 506 compared to May 2018.
WesBank’s Ghana Msibi told The Corner: “We’d warned against hopes from the turnaround in April when sales showed a 0.7% increase despite the short month. May sales were more representative of the rest of the year.
”There were no winners in segment performances – merely an 0.3% gain in medium commercials. Cars declined by 1.4% to 26 170 and light commercials traded 13% down year-on-year.”
‘STILL PRESSURE ON HOME INCOMES’
Mbisi added: “Dealers scored on cars but lost on LCVs. Demand for cars through the retail network translated into a 2.6% increase through this channel but consumers were less interested in LCVs – dealer sales fell by 15.1%.
”Rental market performance was also low on demand during May.”
Household incomes also remained under pressure: “Consider that fuel price inflation year-on-year is 9.2%. The difference in fuel price since January 2019 has been as much as R2.69 for every litre of 93 unleaded – which gives a very real sense of how much further salaries have to stretch.”
Potential vehicle buyers, then, will be looking to the fresh government for reassurance – the South African motor industry for stability.
‘CLARITY IS CRITICAL’
Msibi again: “The government has already taken major strides in policy reform, the new Cabinet has the responsibility to instil more stability in the economy and provide consumers with renewed confidence.
“The ANC must provide clarity on critical paths to improvement in the stability of state-owned enterprises, mining, and land expropriation. This will contribute to a more stable interest rate and boost the motor industry’s significant contribution to the manufacturing sector and GDP.
”This will provide renewed certainty for corporate SA and allow potential customers to make confident purchase decisions.”