Johannesburg, 3 April 2023: “Sales of new vehicles in South Africa took a small dip in March, being 0.6% or 308 vehicles lower than the 50 465 units reported in March 2022, but we at NADA are confident the market will still grow in 2023 compared to last year, which agrees with the forecast of naamsa I The Automotive Business Council,” said Gary McCraw, National Director of the National Automobil Dealers’ Association (NADA) a proud constituent association of the Retail Motor Industry Organisation (RMI), when commenting on the retail sales results for March.
“March was a month of uncertainty with the Human Rights public holiday and the threat of a protest on the day preceding it. The fact that total sales exceeded the 50,000 unit barrier was a positive sign, showing that there is still ongoing, pent-up demand for new vehicles. It is interesting to note that the 50,000 mark has been surpassed only twice since October 2019, now in March 2023 and in March 2022,” said McGraw.
However, a real setback for sales was the decision by the Reserve Bank to increase the interest rate by 50 basis points which meant a rise in the prime lending rate to 11.25%. This impending rise had possibly been factored in by some buyers who then chose to stay out of the new vehicle market for a time.
“The retail dealer network fared well in the circumstances, with many of them having closed over the Human Rights Day period,” added McGraw. “In fact, the dealers’ share of the new vehicle market continues to hold up, with the March share of 87.3% being even better than the 83.6% share in February. On a year-to-date basis the dealers have sold 2 230 more vehicles this year than in the same period in 2022 – 117 178 versus 114 948.”
Dealers sold an estimated 87.3% of the new vehicles retailed in the month, with the rental industry taking 6.1%, government 4.1% and the industry corporate fleets a further 2.5%. Passenger car sales were disappointing with a fall of 6.4% but light commercial sales rose 11.1%, while medium trucks were up 10.1% and heavy trucks improved by 11.1%, which is encouraging in terms of business confidence.
Another positive was the 3.1% increase in the number of vehicles exported in March, with the total being an impressive 34 134 units, as more new models – especially the new generation Ford Ranger – come on stream.
“Looking ahead, we believe that as many local companies have entered a new financial year, there may be a greater appetite for them to start buying again. Ongoing loadshedding and changes in company policies are seeing many more people now returning to work in their offices instead of at home, which means they are driving daily, which could also be a spur for new car sales.
“We also believe that the increase in interest rate may result in a speed up of the buy down trend. We are hopeful that people intending to replace their cars this year will still do so, as there is a host of new models arriving and new vehicle stock levels are much improved. This could lead to more aggressive trading,” concluded McGraw.