We would like to share comments from Sydney Soundy – Head of Standard Bank Vehicle Asset Finance

Sales Performance Summary – Total by Market Segment (NAAMSA flash only has one version that includes Namibia, Lesotho, Swaziland & Botswana): 

Sales Performance Summary – AMH:


General comments on 2012 NAAMSA vehicle sales numbers:

  • Despite subdued economic growth in 2012, new vehicle sales performed well for the year. The number of factors that supported domestic sales during the year include:
    • The consistently low interest rates throughout the year – including a further 0.5% reduction in the middle of the year (July 2012);
    • Continued stability in vehicle affordability, in real terms – lower vehicle price inflation;
    • A variety of new model introductions offering wide consumer choices;
    • Relatively improved stock availability;
    • Competitive activities of industry players leading to industry incentives, special offers and packages for consumers;
    • Vehicle replacement demand;


  • The factors that may have restricted higher sales growth include:
    • Increases in food prices, energy and transport costs impacting on consumer disposable income.
    • High consumer Debt to Disposable Income levels, and moderate consumer spending on durable goods.
    • The Marikana episode, as well as the levels of industrial action that followed in sectors of the economy would also have impacted on business confidence;
    • The transport sector strike during October 2012 may particularly have affected vehicle production and exports.
  • The year’s growth in total vehicle sales of 9.2% is in line with growth expectations for 2012. Passenger Vehicles were the main volume drivers of growth, at 11.3%.
  • The volumes in December 2012 are in line with seasonality for the month.
  • Vehicle exports have seen modest growth
    • Exports to Europe have been subdued as a result of the recession and debt crisis in the Eurozone.
    • The global economic conditions will remain a big determinant for the export business – diversified export markets will help to mitigate the impact.

Sydney Soundy, Head of Vehicle and Asset Finance at Standard Bank

Other Observations

  • Year on year growth in the sales of Diesel, Hybrid Petrol engine vehicles has been higher than Petrol engine vehicles in 2012.
  • There are no significant differences in growth between vehicles of different engine sizes. However, a shift towards affordable vehicles is evident based on sales volumes in different price categories.
    • There are competitively priced, high specification and quality vehicles available to the buyer in different categories – this can be one of the factors that are driving the growth in all engine sizes.
    • Relatively high fuel prices should also reinforce the growing trend in favour of more fuel efficient vehicles.

Key Consumer Trends

  • The Household Debt to Disposable Income ratio remains fairly high at just over 76%.
    • Consistent with the lower interest rate levels, the ratio of Debt Service Cost to Disposable Income decreased to 6.5% in the third quarter of 2012 compared to 6.9% recorded in the preceding quarter.
  • The number of consumers with impaired credit records also remains relatively very high, making up 46.7% of the total credit active consumer base (according to the NCR).
  • Low entry level, and fuel efficient vehicles remain popular particularly resulting from the increased running cost of vehicles.
    • The increased fuel prices have impacted on the running costs of vehicles. Fuel prices have risen by 39.98% in petrol (inland) and 45.27% in diesel (inland) since January 2011 (January 2011 to December 2012). Further, the price of fuel in the country has gone up 60.78% in petrol (inland) and 57.03% diesel (inland) since 2008. (Reference: Statistics from the Department of Energy).
    • The impact of Gauteng toll fees (when they are implemented) will add to the transportation costs.

Outlook for 2013

  • Projections from industry players and analysts range from a conservative flat (zero percentage) growth to an optimistic growth of 8%. Our view is a projected growth of 6% in 2013. The projected growth is derived from some key considerations:
    • Consensus amongst economists expects the GDP growth to be muted in 2013 – Standard Bank Economics Desk projects GDP growth around 3.1%.
    • Interest Rates are expected to remain at low levels;
    • No significant improvement, if any, is expected on Personal Disposable Income levels;
    • The impact of Exchange Rate movements on vehicle prices;
    • Potential inflationary pressures – expectations are that the current Consumer Price Index (CPI) levels will prevail, but that Vehicle Price Inflation may come under pressure from the Rand Exchange Rate movements;
    • Continued introduction of new products and industry competition is expected to stimulate sales activity;
    • The domestic new vehicle sales baseline set in 2012 has surpassed the 600,000 figures last experienced in the period between 2005 and 2007, and has seen consistent growth on a yearly basis since the plunge experienced in 2009 when only 395,000 new vehicles were sold. Therefore, sales will be coming of a bigger base.
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