THE Automotive Business Council CEO, Mikel Mabaso, let out a sigh of relief for new vehicle buyers as the South African Reserve Bank (SARB) paused interest rates at 8,25% in July 2023, after ten consecutive rate hikes totalling 475 cumulative basis points since November 2021.
“Improvement in economic conditions, a lower fuel index recorded at 8,3%, food inflation revised lower at 10,3%, and notably, the consumer price index having gone below the SARB’s target range of 3% to 6% at 5,4% in June 2023 were cited as the main reasons behind the unchanged rates. The last time the CPI was below the SARB target of 6% was more than a year ago in April 2022, Mabasa said.
“The unchanged rates and improvements in inflation rates bode well for the car market as the second largest household investment cost for many South African consumers, considering the distressed borrowings patterns amongst households as debt service costs share of disposable income remain high at 8,4%, on average. The Producer Price index also significantly eased in June 2023 to 4,8%, compared to the 7,3% rate recorded in May 2023”, Mabasa affirms.
Furthermore, naamsa is encouraged by the collaboration between government and business, wherein 115 private company CEOs signed a pledge in July 2023 to help government turn the tide on the well-documented South African economic challenges. The pledge will assist in achieving sustainable development, and inclusive economic growth. Through the stewardship of Andrew Kirby, naamsa’s Immediate Past President and Toyota’s President and CEO, the auto industry will remain invested in supporting our country’s recovery efforts and strengthening our investment story into the future.
The New Vehicle Statistics for July 2023 are as follows:
South Africa posted a marginal increase in new vehicle sales in July 2023, affected by the decline in demand for passenger cars. Aggregate domestic new vehicle sales in July, at 43,389 units reflected an increase of 567 units, or 1,3%, from the 42,822 vehicles sold in July 2022. Contrary, export sales recorded a significant increase of 11,896 units, or 47,3%, to 37,064 units in July 2023 compared to the 25,168 vehicles exported in July 2022. The July 2023 export increases reflect the low base effect of the July 2022 Kwa-Zulu Natal Riots shocks on production and exports.
Overall, out of the total reported industry sales of 43,389 vehicles, an estimated 7,878 units, or 81,8%, represented dealer sales, an estimated 14,1% represented sales to the vehicle rental industry, 1,7% sales to government, and 2,3% to industry corporate fleets.
The July 2023 new passenger car market at 27,839 units had registered a decline of 2 985 cars, or a loss of 9,7%, compared to the 30,824 new cars sold in July 2022. The car dealer industry accounted for 78,3% of the new passenger car market during July 2023. Domestic sales of new light commercial vehicles, bakkies and mini-buses at 12 666 units during July 2023 had recorded a substantial increase of 3,114 units, or a gain of 32,6%, from the 9,552 light commercial vehicles sold during July 2022.
Sales for medium commercial vehicles declined by 90 units or 11,6% to 683 units in July 2023, from 773 vehicle units recorded in July 2022. The heavy truck and bus segments of the industry reflected a positive performance during the month at 2,201 units, signalling an increase of 528 units, or 31,6%, compared to the corresponding month last year.
The July 2023 YTD new vehicle sales were recorded at 309,359, which is an increase of 4,4%, or 12,997 units compared to the 296,362 recorded for the same period last year. M-on-M, the recorded 43 389 vehicle units for July 2023 reflects a decrease of 3,411 units or a loss of 7,3%, compared to June 2023, recorded at 46,800.
The July 2023 YTD export at 209,900 increased by 19,029 units or 10,0%, compared to the same period last year. M-on-M, the July exports at 37,064 units increased considerably by 9,735 units or 35,6%, compared to June 2023, recorded at 27,329.
“We are excited that our new vehicle stats release will include Sinotruk statistics going forward. Finally, naamsa takes this opportunity to congratulate Mercedes-Benz South Africa (MBSA) anniversary of 65 years in the production of vehicles in South Africa. MBSA has manufactured millions of vehicles from its East London plant over the past 65 years, mainly for export. Approximately 4,000 employees are currently employed across MBSA, whilst its investment into the East London Plant has safeguarded jobs and contributed to the multiplier effect of its presence in the East London region and the automotive supply chain. MBSA remains the lifeblood of Eastern Cape’s economy and an important pillar of the SA’s automotive industry.”, Mabasa concluded.
