The vehicle sales industry experienced virtually no growth this past March, according to the latest data from the National Association of Automobile Manufacturers of South Africa (Naamsa). Industry sales totalled 55 449 vehicles, nine more vehicles than March 2014.
Passenger cars contributed 35 548 units to this total but were down 3% year-on-year. By contrast, Light Commercial Vehicles (LCV) sales for March totalled 16 808 units, up 5.5% year-on-year. But those industry numbers were countered by actual consumer demand, influencing dealer channel sales to grow 1.2% for passenger cars and 8.3% for LCV sales, year-on-year.
“While industry sales for passenger cars were down, dealer channel sales remained strong. It’s an indicator that consumer demand is holding steady, and buyers are still visiting dealerships,” said Simphiwe Nghona, executive head of motor division at WesBank. “The rental industry is down 58%, compared to March last year, and this is what has negated the growth seen elsewhere in the industry.”
WesBank’s data reflects this consumer demand, with a 20% growth in vehicle finance applications, compared to March 2014. New vehicle finance applications grew by 15%, and demand for used car finance grew by 22%.
OEM trade-in incentives have continued to attract buyers to the new market. This is reflected in the used-to-new ratio, which was 1.4:1 in February and shifted in favour of new vehicles, to 1.29:1, in March. This uptick in marketing incentives is attributed to the end-of-quarter sales drive.
“With enticing trade-in offers on the table consumers are also opting to bring forward their replacement cycles,” said Nghona.
Vehicle sales remain in line with WesBank’s view of the market, which should end the year up 0.87%.