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Sales Performance Summary – Total by Market Segment (NAAMSA flash includes Namibia, Lesotho, Swaziland & Botswana):
naamsa march 1


Sales Performance Summary – Exports:

Naamsa March 2

Sales Performance Summary – AMH:

Naamsa 3


General Comments on February 2014 NAAMSA sales:

  • The month of February 2014 experienced -2.3% less sales than January 2014.
  • Month on Month all goods types experienced positive growth apart from Passenger Vehicles which contributed to this month’s negative growth. Passenger vehicles declined by -9.4%.
  • Year on Year monthly comparison shows a decrease of -3.1% in February 2014 compared to February of 2013. The average sales per day in February 2014 were less than February 2013 by 2,159 to 2,228. (24 days).
  • Year to date (January – February 2014) comparisons shows that vehicle sales are down by -5.0% in the first two months of year when compared to last year.
  • All goods types had negative growth year on year apart from Extra Heavy Vehicles and Bus which had 7.1% and 32.6% growth respectively. Passenger vehicles are down 6.3% and Light Commercial Vehicles are down 2.6%.
  • The average number of sales for February since 2007 has been 48,677 (excl February 2014) and on average February has ranked as the 6th best performing month since 2010. February 2014 has exceeded the average by 3,137 more vehicles.


General Macro and Industry Comments:

  • The country’s Q4:2013 Gross Domestic Product (GDP) numbers came in at 3.8% q/q growth. This growth was established off a low base. Q3:2013 had come in at 0.7% (lowest q/q growth since 2009).


  • At this past week’s budget speech treasury provided their GDP growth prediction for 2014 at 2.7%. Standard Bank Research (SBR) projects GDP growth of 2.1%.


  • Headline annual inflation rate (CPI) increased from 5.4% y/y in December 2013 to 5.8% y/y in January 2014. This was primarily due to petrol prices, which increased by 30c/l in January 2014. SBR forecast for inflation peaks in Q2:2014 at 6.2% and averaging at 5.8% for the year.


  • The rand has depreciated by 17.6% against the dollar over the course of 2013 (according to the State of the Nation address on 13 February 2014). Continued pressure on the currency will have consequences for domestic inflation and create risks for further rate hikes.


  • Private Sector Credit Extension (PSCE) growth slowed in January 2013 to 8.64% y/y from 10.05% y/y in December 2013. 36% of instalment sales’ credit balances are attributable to new passenger vehicle purchases. The 12-month lag between passenger vehicles sales and instalment credit implies that instalment sales credit may slow from 14.7% y/y in December 2013 to around 5% y/y in December 2014 (SBR).


  • The Quarterly Labour Force Survey (QLFS) over the period Q3:2013 to Q4:2013 reports an employment increase of 141 000 jobs which is 0.4% increase from 75.5% in Q3:2013 to 75.9% in Q4:2013. Unemployment rate decreased to 24.1%.

Exchange Rate – Imports and Exports:


  • The current weakness in the rand will have a mixed (negative and positive) impact on the current vehicle industry.
    • On the negative side, the weak exchange will have an impact on the price of imported vehicles along with the price of various imported components. With 60% of all vehicles sold in South Africa being imported and 75% of all Passenger vehicles imported, New Vehicle Price Inflation is likely to experience relatively higher growth this year than was the case last year.
    • On the positive side, the export market may be boosted by the weaker rand.
  • NAAMSA has forecasted total industry exports to exceed 331 000 units during 2014 and increasing to about 381 000 units in 2015. This is all on the assumption that the global economy will improve and based on projected growth of exports to the African markets.


Increased costs of running a vehicle:

  • The announcement by the Minister of Finance in his 2014 Budget Speech that the general Fuel Levy and Road Accident Fund Levy will increase by 12c and 8c per litre respectively effective from 2nd April will result in an additional 20c per litre on fuel costs being passed on to motorists.
  • The announced fuel levy increases come on the back of increased fuel prices in recent years. A further increase of 36 cents and 28 cents on petrol and diesel respectively effective 5 March will result in effective fuel increases of 84% (petrol) and 94% (diesel) since January 2010. Filling up a vehicle with a tank capacity of 50 litres has increased by approximately R320 since January 2010.


  • The recently implemented toll fees in Gauteng have also added to the cost of running vehicles.


  • The consumers will absorb the abovementioned increases in addition to the increase in vehicle finance instalments/repayments following the hike of 0.5% in interest rates at the end of January 2014.


  • The general advice for consumers to be cautious and responsible when taking up lending facilities remain increasingly relevant today, as has been the past. Consumers are advised to take up lending facilities that suit their pockets and for which their repayments/instalments still leave room, or cushion for unforeseen cost increases. Lengthening of finance terms and building of higher residual values into vehicle finance contracts aimed at reducing instalments need to be approached by consumers with utmost caution – the structuring of deals in this way may resolve affordability in the short term, but do not necessarily alleviate long term debt commitments that may be impacted by changing economic conditions. 

Standard Bank VAF data:

  • The Average Contract Term continues to rise as consumers search for affordability. This is from 65.6 months to 66.9 months (January 2013 to January 2014). The Average Term the account is retained in our books is 40 months.


  • The percentage of Deposits to Total Applications has been decreasing, while the percentage of Applications with Residual Values to Total Applications trend is increasing consistently over the past two years. This indicates that the consumer is attempting to manage the monthly repayment amount at the minimum possible, and thereby assisting with the take-up of higher ticket value vehicles.
  • The % of Applications with Deposit has decreased from 37.5% to 30.8% and the % of Applications with RV’s has increased from 8.9% to 14.6% (January 2012 to January 2014).


2014 Vehicle Sales Prospects:

The factors that will have an impact on the sales of vehicles in 2014 have not changed.

Factors that will inhibit growth include the following:

  • Low level of economic growth is expected in 2014, 2.1% for 2014 (Standard Bank Research).
  • High level of unemployment (24.1%) is expected to persist.
  • Rising inflationary pressures will remain a challenge. Food, fuel, above inflation wage settlements, as well as Exchange Rate fluctuations will pose risks to the inflationary outlook.
  • Exchange Rate fluctuations will also have an impact on vehicle pricing. With approximately two-thirds of vehicles sold in RSA being imported (NAAMSA) pricing will be vulnerable to a depreciating Rand.
  • The Bureau of Economic Research retail survey shows Retail business confidence decreased by 9 index points to a level of 40 in Quarter 4 of 2013.
  • The Replacement Cycle may have reached its peak.


Factors that may assist growth:

  • Even with the recent 50 bps increase in the repo rate, the interest rate environment remains favorable for financing of vehicles. However, this is likely to change with the increasing likelihood of upward movement of interest rates in the course of the year.
    • We have seen an increase in new vehicle prices due to the pressure of exchange rate fluctuations. However, prices of vehicles have grown at a lower rate than that of Consumer Price Inflation. New Vehicle Prices have grown by 3.79% for 2013.
      • There is still demand in the second hand market. This bodes well for the new car market as it enables trade-in to be feasible.  2013 experienced a negative growth in used car pricing, ending the year 2.2% down from 2012.
      • The South African vehicle market remains competitive – with South Africans crazy about cars, manufacturers are pushing creative marketing and incentive programmes as they fight for market share.
        • New model introductions, extended warranties, service plans and sales incentive schemes will remain prevalent in a consumer friendly sales environment.
        • The steady growth of the middle class will continue to drive sales growth in the market.

        [Comments on NAAMSA New Vehicle Sales Report – February 2014 : Sydney Soundy – Head of Standard Bank Vehicle and Asset Finance]

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