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The latest aggregated sales data from the National Association of Automobile Manufacturers of South Africa (Naamsa) show that the decline in new vehicle sales continued in November.
A total of 46 413 vehicles were sold last month, a year-on-year decline of 9,6%. Year-to-date, new vehicle sales are now down 11% compared to WesBank’s forecast of a 12% decline for the year.
Passenger car sales through the dealer channel, which is representative of consumer activity, fell 13,8% in November. Despite this, locally manufactured vehicles continue to top sales charts. Year-to-date sales indicate that the most popular vehicles are volume sellers from mainstream brands, while the five top-selling vehicles for the year are all built in South Africa.
Bakkie sales remain robust, with year-on-year growth of 1% in challenging trading conditions and a declining new vehicle market. This positive performance is due to the introduction of new models, aggressive pricing and sales incentives to attract buyers.
However, demand for new vehicles shrunk 4% compared to November last year, as measured through the volume of finance applications received. This is largely attributed to affordability. The average new vehicle financed in November cost R293 500 – a year-on-year increase of 12% – and sales volumes for premium brands have declined noticeably.
“Consumers continue to battle with affordability in the new market. This is most evident in the premium segments, where sales have fallen markedly,” says Simphiwe Nghona, CEO of Motor Retail at WesBank. “The majority of these premium models are imported and have been heavily impacted by the poor performance of the rand. These customers are either downgrading and buying more affordable models from mainstream brands, or moving to the used market.”
Affordability has also continued to drive the shift to the used market. November saw record demand for used cars, with 103 713 finance applications received for pre-owned models – 9,8% growth compared to November 2015. The average used car financed in November cost R190 500, 5% higher than the same period last year.
“There are many marketing incentives and finance assistance offers from dealers and manufacturers at the moment,” says Nghona. “Consumers should consider these and take the best deal, rather than looking for a specific car.”