It’s that time of the month again, NAAMSA has released the new vehicle sales figures, and we get to see exactly how lockdown is continuing to impact our local automotive sector. The numbers aren’t nearly as dire as they were in the preceding months of hard lockdown, and from that, we can take a glimmer of hope.
Key takeaways from the NAAMSA new vehicle stats for July 2020 show aggregate new vehicle sales of 32 396, a fall of 13 646 units or 29,6% compared to July 2019. The majority of July sales occurred from dealerships accounting for 30 325 units, or 93,6% of sales. Corporate fleet sales accounted for 3,1%, and government sales 2,9%. With tourism a no-go during July the vehicle rental industry only accounted for 0,4% of sales, hopefully, this will increase slightly now that interprovincial travel is allowed.
The decline when comparing year-on-year numbers is not as severe for light commercial vehicles, bakkies, and minibusses with numbers only falling by 2 736 units or 19,7%, recording 11 123 sales for July 2020.
The new passenger car market took a heavy blow in July moving 18 905 units compared to 29 457 units in July 2019, a fall of 10 552 units or 35, 8%. This is largely to do with the temporary cease in economic activity during the lockdown, and that the car rental industry almost flatlined in the last few months. A year-on-year comparison shows that the rental sector was responsible for 20% of sales in July 2019.
According to NAAMSA’s report “July 2020 new vehicle sales figures provide a picture of what could be expected for the remainder of the year with some notable changes to market behaviour by the vehicle rental companies, in particular, which could be the beginning of new trends. Although the Absa Purchasing Managers’ Index (PMI) tracking business conditions in six months’ time turned slightly more optimistic in July 2020, it still remains fairly subdued. Considering the most recent projected negative annualised GDP growth in the country of 7,3% by the SA Reserve Bank, it does not bode well for the outlook on domestic demand for new vehicles over the short term. Positive dynamics such as the further 25 basis point interest rate cut to a near 50-year low during the month and the already 300 basis points interest rate cut for the year, low inflation as well as dealer incentives would be expected to support consumers and businesses into new vehicle purchases. However, a recovery in the new vehicle market will most likely depend on how quickly the economy can break out of its low growth trap and how soon society will recover from the present COVID-19 lockdown”.
Now that most of the manufacturers and their dealers have adapted to the level 3 lockdown adjustments, including transitioning to an online sales presence hopefully August will present better sales figures than July, though we doubt they will be anywhere near August 2019 stats.