While local headlines during July were dominated by news of the damaging impacts of the Numsa strike, it is encouraging to note that new vehicle sales for July 2014 showed continued resilience for the second month in a row.
This is according to statistics released by the National Automobile Manufacturers Association of South Africa (NAAMSA), which showed that July 2014 aggregate new vehicle sales across the board at 57 670 vehicles had registered a modest decline of 891 vehicles – or a fall of 1.5% compared to the 58 561 vehicles sold in July last year.
This was despite the high levels of industrial action, indications of slower economic growth, rising inflationary pressures and a further increase in interest rates.
Looking at the full picture, the new car market during July, 2014 had performed relatively well and at 39 945 units reflected a decline of 418 units or a fall of 1.0% compared to the 40 363 new cars sold in July last year. Domestic sales of new light commercial vehicles, bakkies and mini buses at 15 081 units during July 2014 reflected a decline of 312 units – or 2.0% – compared to the 15 393 light commercial vehicles sold during the corresponding month last year.
On the truck side, sales of vehicles in the medium and heavy truck segments of the industry at 856 units and 1 788 units respectively had also registered declines with medium commercial vehicle sales showing a decline of 128 units or 13.0%, while heavy trucks and buses had registered a more modest decline of 33 units or -1.8%.
To get a true outlook, it is important, however, to break the ‘heavy’ segment mentioned above into the 8 501kg – 16 500kg GVM segment, the ‘extra heavy’ segment – classified above 16 500kg GVM and the ‘bus’ segment. When one does this, the ‘heavy’ segment showed a decline of 17.60% over the same month last year while the extra heavy segment again showed a gain, this time of 3%. So the extra heavy segment is still showing gains. Bus sales increased by 27 units to record total sales of 102 against the 82 sold in July last year
Also important is to look at a comparison of this year versus last year’s ‘Year to date’ (January to July) sales. In the ‘heavy’ segment, sales have dropped 4% from 3 033 to 2 912 unit sales while the ‘extra heavy’ segment has recorded a 22% increase from 7 426 unit sales last year to 8 087 this year to date. This segment remains the Star of South African vehicle sales.
Looking more closely at the sales figures of individual units, July was a runaway win for Volvo in the ‘Extra Heavy’ segment with the Volvo FH recording 145 unit sales. Behind the winner we saw a neck-to-neck finish between two ‘horses’ from the same stable, that stable being Mercedes-Benz South Africa, with the Mercedes-Benz Actros recording 123 unit sales against the 122 of the Freightliner Argosy. Talk about just being pipped to the post and there you have it.
Coming in forth was another horse from the Mercedes-Benz stable, namely the Axor, with 118 units sold, closely followed by the UD Trucks UD-X at 113 units sold. The MAN TGS ran in 6th place to finish the month with 103 unit sales.
Scania also did well but it was spread across their three models units with both the G-Series and R-Series recording 58 unit sales each while the P-Series sold 16 units.
In the heavy segment, it was a close race for first and second place between UD Trucks with its UD-H and the Isuzu F-Series. UD sold 107 units against Isuzu’s 101. The Hino 500 Series came in third position with 90 units sold. Interesting is that the Mercedes Atego crossed the line in a dead heat finish with Tata LPT both selling 31 units each.
The Japanese manufacturers continue to dominate the medium truck segment (3 501kg to 8500kg GVM) with Isuzu again putting in a most credible performance with its N-Series selling 201 units. The Hino 300 Series came in second with 170 units sold and third place went to the Mercedes-Benz Sprinter with 143 unit sales.
On the export aside, NAAMSA figures show that industry new vehicle exports during July, 2014 – at 22 773 vehicles – had registered a substantial decline of 4 364 units or a fall of
16.1% compared to the 27 137 vehicles exported in July last year. However, the good news is that an improvement in export numbers is anticipated for the balance of 2014 on the back of normalised vehicle production schedules and improved growth in global markets.
On this point, NAAMSA says the high incidence of industrial action experienced in South Africa over the past year has proved severely damaging to the South African economy at a time when South Africa urgently requires stronger growth, faster employment creation and a narrowing of the current account and fiscal deficits. The restoration of and improvement in domestic and foreign investor confidence represented a necessary pre-condition in this regard.
Given all this, NAAMSA reckons the domestic market will face head-winds over the short to medium term in contrast to developments internationally which are characterised by expanding vehicle sales in China, the United States and Europe.
Barring further industrial relations instability and assuming the resumption of normal production levels, the expected improvement in global economic conditions should benefit South African vehicle exports during the balance of 2014 and in 2015. NAAMSA expects the domestic market, however, to register a decline, in volume terms, of around 5% compared to 2013.