“The National Union of Metalworkers of South Africa (Numsa) strikehas had little effect on vehicle sales for July, this is because most of the manufacturers would have factored it in. However, it will still impact on the stock reserves going forward. The manufacturers would still have to catch up on lost production to make up for both the local and the export market. The good news is that the strike was not prolonged. Therefore the has been little impact on the July vehicle sales figures.”
General Comments on July 2014 NAAMSA sales:
- The month of July 2014 experienced a 9.2% increase in sales compared to June 2014.
- Month on Month only Passenger (12.9%) and Light Commercial Vehicles (3.69%) experienced positive growth.
- Year on Year monthly comparison shows a decrease of -1.5% in July 2014 compared to July 2013. The average sales per day in July 2014 were less than July 2013 (2,136 vs 2,169 with the same number of business days (27) in both months).
- Year to date (January – July 2014) comparisons shows that vehicle sales are down by -4.7% in the first 7 months of the year when compared to last year.
- Month on month Exports decreased in July (-3.1%) with Passenger vehicles declining by -8.0% and Light Commercial Vehicles growing by 4.9%.
- Year on year monthly comparison shows a decline in exports of -16.1% in July 2014 compared to July 2013.
- AMH & AAD saw an increase in July 2014, 40.2% month on month.
General Comments on July 2014 Standard Bank VAF Personal Applications:
- In July 2014 applications for new vehicles experienced negative month on month growth of -10.2% while applications for used vehicles had positive month on month growth of 3.6%.
- Year on year monthly comparison on applications shows a decline in both new (-28.9%) and used (-6.9%) vehicle market applications in July 2014 compared to July 2013.
- Approval rate in the new vehicle market increased by 0.3% month on month while approval rate in the used market decreased by -5.1% month on month.
- Applications in both Passenger Vehicles (-0.9%) and Light Commercial Vehicles (-13.2%) in the Personal market had negative month on month growth in July 2014.
- Year on year monthly comparison shows negative growth for both Passenger Vehicles (-15.8%) and Light Commercial Vehicles (-22.2%) in July 2014.
- The proportion of applications with RV’s increased to 18.7% in July 2014 from 17.0% in June 2014 (1.7% month on month increase).
- The proportion of applications with deposits decreased to 34.1% in July 2014 from 35.8% in June 2014 (-1.7% month on month increase).
- The Average Contract Term on applications increased from 66.6 months to 67.5 months (July 2013 to July 2014).
- The average application size increased from R188 284 in July 2013 to R207 064 in July 2014, a 10.0% year on year increase.
General Comments on July 2014 Standard Bank VAF Personal New Business:
- In July 2014 Personal new business experienced positive month on month growth in both new (5.4%) and used (14.9) vehicle markets.
- Personal new business year on year comparisons shows a decline in both new (-46.9%) and used (-48.5%) vehicle markets in July 2014 compared to July 2013.
- Passenger vehicles had positive month on month growth of 11.9% while Light Commercial had negative growth of -8.4%.
- Personal new business year on year monthly comparison shows a decline for both Passenger Vehicles (-46.5%) and Light Commercial Vehicles (-48.0%) in July 2014 compared to July 2013.
- The proportion of new business deals with deposits increased to 43.3% in July 2014 from 42.7% in June 2014 (0.6% month on month increase and 1.8% year on year increase).
- The proportion of new business deals with RV’s increased to 23.9% in July 2014 from 22.8% in June 2014 (1.2% month on month increase and 9.0% year on year increase).
- The Average Contract Term stayed the same at 65.8 months (July 2013 to July 2014).
- The average deal size increased from R241 116 in July 2013 to R289 423 in July 2014, a 14.9% year on year increase.
General Comments on Standard Bank Personal VAF Book:
- Personal Market book shows new vehicle market increased from 55.7% in July 2013 to 57.3% in July 2014, while used vehicle market decreased from 44% in July 2013 to 43% in July 2014.
- Passenger Vehicles stayed the same at 89% between July 2013 and July 2014 while Light Commercial Vehicles declined from 11% in July 2013 to 10% in July 2014.
General Macro and Industry Comments:
- The country’s Q1:14 Gross Domestic Product slowed to 1.6% y/y from 2.0% in Q4:13 and from 3.8% q/q in Q4:13 to 0.6% q/q in Q1:14. Standard Bank Research has revised its GDP forecast for 2014 to 2.0% down from 2.1%.
- Q2:14 Unemployment rises to 25.2%, Standard Bank research expect unemployment to rise over the next 18 months as capacity remains under-utilised, interest rates rise and strikes persist.
- The MPC hiked the repo rate by 25 bps in their July Statement. Standard Bank research predicted this outcome, arguing that the SARB would take rates up by 25 bps premised largely on concerns that Bank might have regarding their perceived credibility and effectiveness at anchoring inflation expectations.
- Headline annual inflation rate (CPI) in June 2014 was 6,6%. This rate was the same as the corresponding annual rate of 6,6% in May 2014. On average, prices increased by 0.3% between May 2014 and June 2014. Transport index decreased by 0.1% between May 2014 and June 2014, this was mainly due to a 22c per litre decrease in petrol price. The annual rate decreased to 8.6% in June 2014 from 8,9% in May 2014, According to Standard Bank Research inflation forecast, we expect that inflation has already peaked in Q2 at 6.5% y/y.
- Fuel prices have risen by 5.4% in petrol (inland) and risen by 0.2% in Diesel (inland) since Jan 2012 to July 2014. Fuel prices have risen by 83.6% in petrol (inland) and risen by 87.1% in diesel (inland) since Jan 2010 to July 2014. Further, the price of fuel in the country has gone up by 289% in petrol and up by 413.3% in diesel since Jan 2001. Petrol price will increased by 29c per litre and diesel increased by 14c per litre on 2nd July.
- All of these factors are expected to hinder vehicle sales growth.
- In the month of June 2014, both Petrol (7.5%) and Diesel (5.3%) vehicle sales had positive month on month growth.
- Year on Year June 2014 versus June 2013 Petrol vehicles declined by -7.1% and Diesel vehicles grew by 7.5%.
- Year on Year YTD comparison for 2014 shows that Petrol vehicle sales declined by -7.7% while Diesel vehicle sales declined by -0.6%.
NAAMSA Seasonality and Average Selling Days:
- The average number of sales for July since 2010 has been 50,670 and the average number of sales for July since 2012 has been 57,034.
- On average July has ranked the 2nd best performing month in the year.
- July 2014 had 27 selling days, with an average of 2,136 sales per day.
- July 2013 had 27 selling days as well, with an average of 2,169 sales per day and was ranked the best performing month last year.
- July 2014 has ranked 9th best performing out of the 91 months since January 2007.