LIGHT COMMERCIAL VEHICLES DRIVE AUGUST VEHICLE SALES
- Strong commercial vehicle sales
- Replacement demand and low interest rates continue to drive sales, but
- Growth slowing
- Strike effect expected in September
Toyota South Africa Motors (TSAM) was the only vehicle manufacturer to break through the 10 000 vehicle sales barrier in a busy August sales month. TSAM recorded sales of 10 398 units in an overall market of 56 112 units as reported by the National Association of Automotive Manufacturers of South Africa (Naamsa).
“Sales for August were slightly lower than July, but well in line with expectations and the second best August sales month since the market peaked in 2007,” says Calvyn Hamman, Senior Vice President for Sales and Marketing at TSAM.
The comparison between 2007 and 2013 is not coincidental, as many vehicle buyers are now replacing their vehicles purchased in 2007. This replacement demand is especially evident in dealer sales, which represent 46 442 units (82.7%) of the total market.
Dealer sales were 2% better than the same month in 2012, while sales to the vehicle rental market increased by 3.7% over the same period. Vehicle rental sales normally increase during the last quarter of the year as companies in this market prepare for the busy summer tourist season.
“Dealer sales remain strong in August despite the strike in the automotive industry which is currently in its third week,” says Hamman. “This is because there is normally 6 weeks of stock in the network between the manufacturer, the vehicle delivery network and the dealer network. With this is mind we will only see the effect of the strike in coming months’ sales.”
According to Hamman the sales momentum is starting to slow, having dropped to below 6% for the year to date.
The decline in passenger vehicle sales is also evident in applications received and processed by Toyota Financial Services. TFS reports that applications for finance dropped by 10.82% for the month, but remain 1.19% ahead for the year to date.
A decline in passenger vehicle sales was more than compensated for by a significant growth in all commercial vehicle segments.
Light commercial vehicle (LCV) sales, spearheaded by a market leading 3 339 Hilux units sold, grew by 5.3% to total sales of 14 376 units.
“Many point to the strong growth in LCV sales as an indication of positive underlying economic activity, but the growth is somewhat misleading,” says Hamman. “Last year – during the comparative sales period – several LCV suppliers were unable to produce in volume due to strike activity, model changes or other supply-side constraints. This skews any year-on-year comparison. In our view the growth would under normal circumstances mirror that of passenger vehicles.”
This is definitely not the case in the medium, heavy and extra heavy commercial vehicle segment, where growth of close to 30% was recorded. A combined total of these segments and bus sales have grown from 2 776 units in June to 2 819 units in July and 2 844 units in August, the best sales month since September 2008.
“We, through our Hino South Africa affiliate, have seen high levels of price competition in the commercial vehicle segment. This, combined with municipal tender deliveries, has boosted truck sales and will continue to do so for the coming months,” says Hamman.
Vehicle exports are often the first sector of the industry to be negatively affected by a strike and total industry exports declined by 22.9% to 19 284 units in August. Despite this Toyota doubled their efforts and exported 7 253 locally manufactured Toyota vehicles.