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South Africa’s new vehicle sales boom in 2022’s shortest month

Business confidence also appears to be improving as evidenced in strong commercial vehicle sales at the dealer level, with light commercials up by 7.4%

“February may be the shortest month of the year, but new vehicle sales in South Africa boomed as the monthly total soared by 18.4% to 44 229 units compared to the 37 369 units retailed in the same month a year ago,” commented Mark Dommisse, Chairperson of the National Automobile Dealers’ Association (NADA) when commenting on the latest sales figures distributed by naamsa I The Automotive Business Council.

“It’s encouraging that sales have been up for the first two months of the year compared to January and February 2021, despite the supply issues affecting most franchises. What is important is that the dealer channel was responsible for 84.9% of these sales, which points to growing consumer confidence despite the conflict in Ukraine, the ongoing global COVID-19 pandemic, and a continuing global shortage of semiconductors which affects the number of new vehicles being produced,” commented Dommisse.

Passenger cars sold through dealerships led the high growth in the market last month, jumping 27.9% from February 2021. The rental industry made a substantial 13.3% contribution to the overall passenger car total and contributed 10.1% of the total new vehicle market in February.

Business confidence also appears to be improving as evidenced in strong commercial vehicle sales at dealer level, with light commercials up by 7.4%, medium trucks up 29.3% and heavy and extra heavy trucks rising by 49.4% and 17.2% respectively when compared to the corresponding month last year. Notably, commercial vehicle sales are generally strong in the month of February due to financial year end for most businesses. This is coupled to farming communities also purchasing their vehicles in February.

“An interesting statistic came out in the listing of sales of electric, plug-in hybrid and traditional hybrid vehicles, which when combined, rose by an impressive 535% on a year-to-date basis from only 34 in the first two months of 2021 to 216 units in the same months this year.

“This can be partly attributed to the strong take up of the new Toyota Corolla Cross, which was South Africa’s best-selling car in February and where there is encouragingly high demand for the hybrid variant of this model. Of course, the introduction of many new electric models from premium brands such as Audi, BMW and Mercedes will only add to this tally going forward.

“The good news of no major tax increases or levies from last week’s budget speech, was soon put out of our minds as massive fuel price increases were announced. This rising fuel price, linked to a crude oil price that is now well above $100 a barrel, will undoubtedly see the importance of a vehicles’ fuel efficiencies taking centre stage when buying decisions are made.

“The conflict unravelling in Europe is very worrying and together with the fuel price shock this month will in all likelihood affect sales going forward. But we see a sweet spot in the passenger car sector, namely the competitive sub-compact segment, where the wide range of models available use small capacity engines that are light on fuel. This segment should continue to see even stronger growth in the future,” concluded the NADA Chairperson.

NADA is a constituent association of the Retail Motor Industry Organisation (RMI).

 

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