1. BRIEF COMMENT ON DECEMBER, 2017 SALES
Industry domestic sales ended 2017 on a weak note with aggregate industry new vehicle sales for December,
2017 at 40 636 units recording a decline of 1 008 vehicles or a fall of 2.4% compared to the total new vehicle
sales of 41 644 units during the corresponding month of December, 2016. The December, 2017 new passenger
car market and light commercial vehicle market reflected a year on year volume decline of 6.4% in the case of
cars and a noteworthy improvement in the case of light commercial vehicles of 7.0%. Sales of medium and
heavy commercial vehicles were essentially unchanged year on year.
In contrast, export sales had recorded a decline in December, 2017 and at 17 374 units reflected a fall of 1 333
vehicles or 7.1% compared to the 18 707 vehicles exported during December, 2016. This was largely
attributable to the effect of model run out and new model introduction of the new VW Polo range in 2018.
2. COMMENT ON 2017 NEW VEHICLE SALES AND VEHICLE EXPORTS: A CHALLENGING YEAR CHARACTERISED
BY A SLIGHT IMPROVEMENT IN DOMESTIC SALES OFFSET BY A MODEST FALL IN VEHICLE EXPORTS
For the first time in four years, new vehicle sales during 2017 in South Africa recorded a year on year
improvement, albeit at a modest 1.8% in volume terms. The improvement, due to modest gains in new car and
light commercial vehicle sales, was encouraging given subdued economic growth, pressure on consumers’
disposable income and low levels of consumer and business confidence. The marginal decline in interest rates in
July, 2017 had a positive effect. In the event, aggregate sales during 2017 rose by 10 039 units or 1.8% to 557
586 unit sales compared to the annual sales total of 547 547 in 2016. Major contributory factors to the improved
new car and light commercial vehicle sales were the continued strong contribution by the car rental sector
which accounted for an estimated 16.0% of new car sales during the year as well as unprecedented sales
incentives by manufacturers and importers particularly during the second half of 2017.
Whilst the modest improvement was welcome, the figures should be seen in the context of industry sales 11
years ago when the domestic market recorded an all-time high sales number of 714 314 units of which the new
car market had represented 481 558 vehicles.
2017 Vehicle exports represented the third highest annual Industry export figure on record and total vehicle
exports at 329 053 units were down on the 344 820 vehicles exported in 2016 – a decline of 15 767 units or a fall
of 4.6%.
Assuming continued improvement in the global economy – industry export sales during 2018 were projected to
improve by about 37 000 vehicles or about 11.0% to reach a total projected number of 366 000 export units.
3. INDUSTRY PROSPECTS FOR 2018: FURTHER MODEST IMPROVEMENT IN DOMESTIC NEW VEHICLE SALES
AND UPWARD TREND IN VEHICLE EXPORTS
South African financial markets have reacted positively to the outcome of the December, 2017 ANC
elective conference. However, economic and fiscal policy uncertainty, political challenges, the risk of
further credit rating downgrades and increasing geo-political tensions make forecasting difficult.
On the positive side, several recent economic indicators support the view that the South African
economy is performing better than anticipated despite low levels of business and consumer
confidence. Barring a further credit rating downgrade, an improvement in economic growth from
about 1.0% in 2017 to around 1.9% in 2018 remains possible and this would lend support to new
vehicle sales in the domestic market. The substantial improvement in the Reserve Bank’s leading
indicator of economic activity heralds improved economic prospects. Also on an encouraging note, the
positive global economic environment – with International Monetary Fund projections of 3.7% global
expansion – will lend support to industry export sales.
Faster economic growth remains an imperative to address South Africa’s socio-economic challenges
and to take pressure off strained public finances and overburdened taxpayers. In this context,
concerted steps are needed by Business, Government and Labour to create a more investor-friendly
environment as a means of boosting growth.
NAAMSA anticipates further modest improvement in domestic new vehicle sales during 2018 as well as
further growth in vehicle exports and industry production numbers.
Taking into account the time effect of various new model introductions, the new car market should improve
during 2018 by around 2.0% and the light commercial vehicle market by double that percentage.
Factoring in the expected improvement in exports, domestic production of motor vehicles in South Africa was
expected to show an increase from 588 000 vehicles produced in 2017 to close on 635 000 vehicles in 2018 – an
improvement in vehicle production of about 8.0% This figure could prove conservative if vehicle exports expand
more than currently anticipated.
Best wishes for 2018 to the media and all automotive industry stakeholders.
NAAMSA OFFICES: PRETORIA 9th January, 2018
Also view:
Vehicle Finance, Car Insurance and Road Safety
Buying and Selling a Vehicle – Informed decisions and the Vehicle Retailer
The Online Vehicle Retail Market and Safely Selling Vehicles Online