Nada Comment: Incremental gains for new vehicle sales, but still way down on pre-Covid numbers

South Africa, 02 November 2020: Major supply issues across significant Light Commercial Vehicle (LCV) brands due to Covid-19 restrictions, coupled to the run out of certain key models, resulted in a 22.6% reduction in light commercial vehicle volume on dealer floors.

“Demand seems to be outstripping certain supply lines on LCVs, and while this is not an ideal situation, it could be worse if things were the other way around,” said Mark Dommisse, Chairperson of the National Automobile Dealers’ Association (NADA).

The National Association of Automobile Manufacturers of South Africa (Naamsa) reported that total aggregate new vehicle sales of 38,752 units for October were 25.4% lower than the       51,968 units retailed in the same month last year, but the year-to-date situation after the first 10 months of 2020 is even more gloomy at 196,664 units, which is 32.5% below the figure at the same stage last year.

“It is interesting to note that medium and heavy truck and bus sales are faring marginally better this month. The improved showing by the heavier commercial vehicle segment signals a measure of improving confidence and this is where we are expecting significant growth once the government’s infrastructure development programme gets under way,” explained Dommisse.

“Dealers are enjoying strong demand for used vehicles, however, getting sufficient quality pre-owned stock is problematic. This situation has been exacerbated by the limited flow of decent stock coming from the rental companies, who destocked earlier in the year when demand for hire cars fell drastically, resulting in significant downsizing of these businesses.

“On the brighter side, there are several marketing incentive programmes running at local dealers as we head for the holiday season. With interest rates still low, it remains a good time for consumers to make purchases, where they can afford it,” concluded the NADA Chairperson.

NADA is a proud member of the RMI.