The unmitigated chaos at South Africa ports allied to the massive failure of Transnet freight services – to say nothing about ongoing loadshedding – has given new vehicle sales a severe slap in the face with November the fourth consecutive month in which the numbers were down.
naamsa | The Automotive Business Council says the current logistical challenges at the country’s ports and across the entire freight rail network in the country is impacting negatively on vehicle production and on new vehicle sales in South Africa, with CEO, Mikel Mabasa adding: “The current challenges will soon have a devastating domino impact on the entire auto value chain. While supply chains are gradually stabilising globally and semi-conductor shortages are anticipated to ease, our erratic logistical challenges will become the single biggest risk for the sector should we not urgently address many of the leadership and systemic structural challenges experienced by Transnet.
“The sector's productivity relies heavily on infrastructure investment, sustainable energy supply, and the revitalisation of SA's Ports, Rail, and Road. A conducive framework is crucial to support these critical elements.”
The November 2023 vehicles market declined by 9,8% and recorded 45 075 registrations compared to the 49 986 vehicle registrations recorded in November 2022. The new vehicle market was 1,3% below the pre-pandemic level of 2019 at the beginning of 2023.
For the year to date it was now 0,6% ahead of the same period 2022 which means that, depending on the December sales figures, could miss out in returning to the pre-pandemic level after three years.
The November 2023 new passenger car market registered a significant decline of 4 052 cars, or a loss of 12,1%, compared to the new cars sold in November 2022. Domestic sales of new light commercial vehicles, bakkies, and mini-buses recorded a decline of 526 units, or a loss of 3,9%,while sales for the medium commercial vehicle segment dropped 13,5%.
The heavy truck and bus segments went down 10,7%. Commercial vehicle sales provide a fairly accurate barometer of business confidence and the declining sales are showing waning confidence levels the ANC is incapable or unwilling (or both) to address with any sense of urgency.
Consumers had their third respite from further interest rate increases in November when the South African Reserve Bank held interest rates unchanged. But the general outlook remains for a high interest rate environment to continue impacting household debt until the middle of next year.
“While this is of some comfort to indebted consumers, the high lending rate combined with high inflation and relatively lower household income, will continue to restrict big-ticket purchases such as new vehicles,” says Lebo Gaoaketse, Head of Marketing and Communication at WesBank.
“Those restricted household incomes and business revenue streams are prioritising an alternative energy solution before a new vehicle purchase,” says Gaoaketse. “With the return of higher stages of loadshedding during November, sales during December and January could be expected to experience a higher-than-usual wait-and-see approach to purchase decisions.
“More insightful is the significant increase in applications for used vehicles, which out-number new vehicle applications two-to-one. This is also reflected in a year-on-year increase of financed vehicles at the bank in favour of used vehicles, WesBank’s ratio now sitting at 1,92 used vehicles financed for every new vehicle.”
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Brandon Cohen, National Chairperson of the National Automobile Dealers’ Association (NADA),
highlighted a glimmer of positivity, stating: "Year-to-date vehicle sales stand at 491 967 units after 11 months, still 0,8% higher than the comparable period last year. The challenge now is whether December sales can sustain this slim annual growth."
Exports, a crucial element for local manufacturers' financial viability, remained robust, exhibiting a 25,5% increase over November 2022 figures. Year-to-date exports rose by 13,8%, reaching 370 284 units after 11 months.
Colin Windell - proudly CHANGECARS
