Motoring News

Switch to Level 2 no cure for ‘disappointing’ auto sales

JOHANNESBURG, South Africa: Most auto brands in South Africa were expecting vehicle sales to have improved through August as pandemic fever subsided and new ways to market automobiles spread.

No way.

New-vehicle sales remained close to stagnant with the overall market (all channels) down by 11 969 units (26.3%) on August 2019.

Sales of passenger cars through dealers declined 15.9% year-on-year against the fall of 18.7% in July and sales of light commercials were 21.1% fewer than August 2019 against a decrease of 17.1% in July 2020.

MARK DOMMISSE: Chairman of the SA National Automobile Dealers’ Association.                 Image: Supplied

New vehicle sold through dealers in August totalled 30 875 – 92% of the total market of 33 815 units but the bulk went to rental fleets, long a positive factor for the total market but now rental business has decreased substantially.

Dealer sales year-to-date after eight months of 2020 underline the tough market with dealer sales down 32.5% from 288 600 units in 2019 to 194 892 this year.

NO QUICK RECOVERY

A ray of sunshine, however came from the medium and heavy commercial vehicle segments – each grew in August. However, more licensing departments opened countrywide under Level Two and movement was opened between provinces.

Mark Dommisse, chairman of the National Automobile Dealers’ Association (NADA), told The Corner in a media release: “We don’t anticipate a marked recovery soon. The current situation will probably be new normal for a while.

“Many potential buyers, corporate and private, remain under huge financial pressure and still face the unknown in terms of future business and employment prospects. Relatively few people can commit to vehicle repayments over longer periods.

HOUSEHOLD BILLS INCREASING

Domisse added: “We trust the SA Reserve Bank will keeps interest rates low for at least two years to allow markets to recover. This could form one of the major building blocks for the government as they look to stimulate the economy.

”Inflation is still low but there are noticeable increases in household expenses and fuel costs, each having an inflationary effect in the short to medium term.

“Our industry understands that difficult times will continue so must consider the changed economic scenario. Motor traders in South Africa have been resilient against historic setbacks so we remain optimistic in the longer term.”

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