PRETORIA: Tuesday, February 01, 2022: Reflecting on the new vehicle sales statistics for January 2022, naamsa | The Automotive Business Council said that the new vehicle market started the year off on a very positive note, continuing on its gradual recovery path to pre-COVID-19 levels. Aggregate domestic new vehicle sales in January 2022, at 41,382 units, reflected an increase of 6,743 units, or 19,5%, from the 34,639 vehicles sold in January 2021. Export sales, however, recorded a decline of 1,962 units, or 9,3%, to 19,089 units in January 2022 compared to the 21,051 vehicles exported in January 2021.
Overall, out of the total reported industry sales of 41,382 vehicles, an estimated 34,863 units, or 84,2%, represented dealer sales, an estimated 12,1% represented sales to the vehicle rental industry, 2,4% sales to government, and 1,3% to industry corporate fleets.
The January 2022 new passenger car market at 30,037 units had registered an impressive increase of 6,305 cars, or a gain of 26,6%, compared to the 23,732 new cars sold in January 2021. The car rental industry supported the new passenger car market during the month and accounted for a noteworthy 15,3% of car sales in January 2022. Domestic sales of new light commercial vehicles, bakkies and mini-buses at 9,629 units during January 2022 had recorded an increase of 349 units, or a gain of 3,8%, from the 9,280 light commercial vehicles sold during January 2021.
Sales for medium and heavy truck segments of the industry reflected a mixed performance and at 465 units and 1,251 units, respectively, showed a decline of 21 units, or 4,3% in the case of medium commercial vehicles, and, in the case of heavy trucks and buses an increase of 110 vehicles, or a gain of 9,6%, compared to the corresponding month last year.
The January 2022 exports sales number at 19,089 units reflected a fall of 1,962 vehicles, or 9,3%, compared to the 21,051 vehicles exported in January 2021. Although the momentum on the vehicle export side at present is downwards, it is anticipated to gain traction during the year on the back of further new model introductions by major vehicle exporters as well as a favourable global economic outlook.
In line with the moderate economic growth forecast for the country for 2022, the new vehicle market is expected to continue its gradual recovery to pre-COVID-19 levels, but at a slower pace. The South African Reserve Bank increased its benchmark repo rate by 25 basis points to 4% at its January 2022 meeting, as widely expected, due to increased inflation risks. This was the second increase since November 2021 as the Committee believes a gradual rise in the repo rate will be sufficient to keep inflation expectations well anchored. Inflation has been fuelled, amongst others, by record-high fuel prices, rising food and energy costs as well as a depreciating Rand exchange rate. Consumer and business sentiment will therefore remain under pressure over the short to medium term while supply chain disruptions, such as the global shortage of semi-conductors, will also continue to hamper new vehicle sales and production during the year. On the positive side, the new vehicle market trend over the next three years is expected to be upward, in close correlation with National Treasury’s projected domestic economic growth outlook, averaging 1,7% for 2022, 2023 and 2024.
Prospects for vehicle exports for 2022, although declining during the month, remain positive in line with favourable economic and market conditions abroad as well as on the back of further new model introductions by major vehicle exporters in the country in 2022. Vehicle exports, the lifeblood of the domestic OEMs, are important to the viability of the South African automotive industry, as exporting remains key to generating sufficient economies of scale and to achieving improved international competitiveness.