By: Leo Kok
It was a tough month at the office for sales personnel in the automotive sector.
Sales dropped by 2,5 per cent to 47 964 units in August but increased by a very marginal 108 vehicles over July. Of the main market segments, passenger vehicles dropped by 2,2 per cent to 31 447 vehicles, while light commercial (bakkies) sales dropped by 5,8 per cent to 13 956 vehicles.
Market commentators have different reasons for the decline in sales. Some say that the cost of living, such as the rising fuel prices, are causing private buyers to hold on to their hard-earned money for longer. Others, like the National Association of Automobile Manufacturers (Naamsa), says that a decline in business confidence, poor economic growth and pressure on vehicle manufacturers are causing the slump.
Regardless of the underlying reasons, this is the first month since February that the market has declined, and it remains on par with sales in July. It is true however that some sub-segments did decline.
Unpacking the segments
Vehicle rental sales represented 5 976 units, which is 12 per cent of the market. In July, rental sales represented 14 per cent of the market. Analysts delved even deeper and show that in the passenger vehicle market, rental sales represented 17 per cent of all cars sold compared to 18,8 per cent of all cars sold in July. The vehicle rental industry remains a large buyer of new vehicles, especially in the months before the Christmas holiday, when they experience their busiest time.
The analysis of vehicle sales has been made more difficult by BMW and Porsche’s decision not to report detailed sales figures. These two luxury brands have now joined Mercedes-Benz, and their various sub-brands, by only supplying aggregated sales figures. This means, for instance, that you cannot see how many of Merc’s 1 382 passenger cars were A, B, C or other classes or how many of their Extra Heavy truck sales were FUSO, Freightliner or Mercedes-Benz. Ditto with BMW and Porsche, who now simply report a single “Passenger Vehicle” number, with no distinction between models.
Porsche’s family member Bentley has also decided to only report a single sales figure – three units in August – without giving a glimpse into what models they are. Their arch nemesis Rolls Royce do not report their sales at all.
Of the luxury brands, Ferrari and sister Maserati remain on the sales roster. Maser sold one Ghibli and four Levante SUVs and Ferrari delivered one each of the GTB, Spider and 812.
No real growth
By all accounts the vehicle sales will remain sluggish for the rest of the year. Some expect the market to decline slightly from last year’s 557 586 units and others see marginal growth similar to the single digit GDP growth expected in 2018.
On a more positive note, BMW’s factory is now humming and the new X3 has rapidly become one of our biggest vehicle exports. BMW (5 532 units), Mercedes-Benz (10 048 units) and Ford (6 744 units) are our biggest vehicle exporters.
Naamsa and others welcome the improvement in vehicle exports in August (up 7,7 per cent) over the same month last year), but they warn that the current trade war between the USA and its trading partners and erratic global growth may jeopardise vehicle export market growth.