Now the vehicle assembly and supplier industry strikes are over, motor companies can once again concentrate on their core business: providing what customers want and giving them something to aspire to. The Johannesburg International Motor Show comes at just the right time to raise everyone’s spirits.
A successful motor show can work wonders for sales. A US study shows that nearly a quarter of new-car buyers actively shop for vehicles at motor shows. Of the 23% who say they go in with purchase in mind, 60% say they decide during the show which brand to buy.
“Auto shows are extremely effective in helping sell cars,” says the survey.
Some short-term delivery delays are likely in SA while local manufacturers catch up on lost production after the strikes. Most companies had built up vehicle stocks before the strikes began, so SA buyers were cushioned from immediate shortages. Toyota SA sales and marketing head Calvyn Hamman says there are usually six weeks’ supply in the pipeline so the strikes ended just in time to avoid major disruptions.
The market imbalance in favour of imported vehicles also helped local consumers. About two-thirds of cars sold in SA are shipped in from overseas.
Some impact on full-year sales is certain, depending on the speed at which local companies can recover lost production. Though Hamman says October sales are likely to be affected, most marketers believe that if all goes according to plan, there is no need for big adjustments to long-term forecasts.
The Reserve Bank’s recent decision not to increase interest rates, and a slight fall in petrol and diesel prices at the beginning of October, have both given cause for optimism. Sydney Soundy, Standard Bank’s head of vehicle and asset finance, says: “Interest rate levels have played a key role in sustaining the demand for new vehicles during 2013. This is not likely to change as we approach 2014. People already considering buying vehicles will do so, in the anticipation that rates will remain steady for the medium-term.” Even so, he expects full-year new-vehicle sales to fall below the 6% increase originally predicted by several analysts.
Despite the strikes which began mid-August, car sales by the end of September were up by 3,9% on 2012 and light commercial vehicle sales by 7,3%. The only real casualty was specialist importer Associated Motor Holdings, which saw car sales dip by 10% over the nine months — the result of a weakening rand that has raised import costs and therefore prices.