04 May 2015: New vehicle sales in April 2015 saw a year-on-year decline of 3.3%, with total sales of 44 428, according to the latest data from the National Association of Automobile Manufacturers of South Africa. Passenger car sales totalled 30 184, representing a year-on-year decline of 1.9%. Sales of Light Commercial Vehicles (LCVs) totalled 12 077, a yearly decline of 6%.
Closer analysis of sales data shows that passenger car sales remain relatively robust, with the smallest decline of all reported segments. Passenger sales through the dealer channel have only declined 0.8%, year-on-year. However, light, medium and heavy commercial vehicle sales through dealer channel declined dramatically compared to the same period in 2014. LCV sales declined 13.6%, followed by declines of 3.5% for medium commercial vehicles whilst the heavier commercial vehicles declined by 5%.
“The sudden decline in commercial sales is indicative of current business sentiment in the market,” said Simphiwe Nghona, executive head of motor division at WesBank. “Market confidence is low, and the current economic climate is not conducive to growth. As a result, corporate buyers are electing to hold onto assets for longer by extending the replacement cycle, and not incur any further debt or capital expenditure on replacing or acquiring business assets.”
Fewer working days in April also affected the volume of retail vehicle finance applications. For the first time in 22 months application volumes have seen a year-on-year decline. New vehicle finance applications were down 7.68%. Used vehicle finance applications, which have seen record growth until now, declined 0.32%.
“This seasonal fluctuation was not at all unexpected, with the Easter holidays always seeing fewer people visiting showrooms,” said Nghona. “Application volumes are also starting to normalise now, after the introduction of credit amnesty in March last year.”