Car sales recovery from lockdown a ‘bumpy road’

With no handy playbook, no precedents for the toxic economic fallout from COVID-19, the only thing predictable about auto sales is now unpredictability. And with viral spikes potentially forcing fresh public restrictions any automotive recovery seems likely to follow the same topsy-turvy course.

Analysts say the worst may be over. But they can’t be sure. The pandemic drove auto sales to a sickly low in April, and there was an expectation in the minds of most new vehicle dealers in South Africa that there would be an improvement in the sales rate, as the country moved to Level Two Lockdown rules, but that was not the case.

The recently released new vehicle sales figures for August, distributed by NAAMSA, show a market that remains fairly stagnant. The overall market (all channels) declined by 11,969 units or 26.3% from the previous August 2019.

There was a slight increase in sales through the dealer channel of 1,003 new vehicles in August, compared to July 2020, but sales of passenger cars through dealers still declined 15.9% year-on-year, compared to a fall of 18.7% in July, while sales of light commercial vehicles were 21.1% lower than August last year against a decrease of 17.1% in July.

New vehicle sales through the dealer channel in August amounted to 30,875 units, which made up 92% of the total market of 33 815 units. A major reason for this high percentage is that sales to rental fleet, which have long been a positive factor for the total market, have virtually disappeared as the rental business has decreased substantially.

Dealer sales on a year-to-date basis, after eight months of 2020, underline the tough market conditions with dealer sales down 32.5% from 288 600 units in 2019 to 194 892 this year. A ray of light came in the medium and heavy commercial vehicle segments, which all showed some growth in August. However, a factor here is the opening of more licencing departments across the country under Level Two, as well as movement being allowed between provinces.

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#NAAMSA #National Automobile Dealers Association

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Papi Mabele

Papi Mabele has a marketing background, he is a digital marketing expert with extensive experience in launching and building global brands in the emerging markets. Papi is also an avid tech writer, enthusiast and all round tech junkie. As a freelance writer and analyst he has been numerously published in Popular Mechanics (SA), GQ South Africa, Premier Magazine, Driven Magazine, Bloem News, Courant, The Weekly, Enthooze Magazine and PiE magazine amongst others.