Comments on NAAMSA New Vehicle Sales Report – December 2012 (and Full Year 2012 Sales Statistics)

Sydney Soundy – Head of Standard Bank Vehicle Asset Finance
Sales Performance Summary – Total by Market Segment (NAAMSA flash only has one version that includes Namibia, Lesotho, Swaziland & Botswana):
Vehicle Sales Month on Month – 2012 |
|
November 2012 |
December 2012 |
Varience |
PAS |
36,682 |
33,043 |
-9.92% |
LCV |
13,969 |
11,130 |
-20.32% |
MCV |
898 |
722 |
-19.60% |
HCV |
423 |
333 |
-21.28% |
XHV |
1,090 |
647 |
-40.64% |
BUS |
82 |
141 |
71.95% |
TOTAL |
53,144 |
46,016 |
-13.41% |
Vehicle Sales Same Month – 2011 vs 2012 |
|
December 2011 |
December 2012 |
Varience |
PAS |
30,713 |
33,043 |
7.89% |
LCV |
12,814 |
11,130 |
-13.14% |
MCV |
669 |
722 |
7.92% |
HCV |
279 |
333 |
19.35% |
XHV |
640 |
647 |
1.09% |
BUS |
76 |
141 |
85.53% |
TOTAL |
45,191 |
46,016 |
1.83% |
Year to Date (Jan to Dec) – 2011 vs 2012 |
|
2011 |
2012 |
Varience |
PAS |
395,429 |
439,997 |
11.27% |
LCV |
149,287 |
156,170 |
4.61% |
MCV |
9,259 |
9,816 |
6.02% |
HCV |
4,704 |
4,945 |
5.12% |
XHV |
11,750 |
11,894 |
1.23% |
BUS |
986 |
1,092 |
10.75% |
TOTAL |
571,415 |
623,914 |
9.19% |
Vehicle Sales Performance Summary – Exports:
Month on Month – 2012 |
Exports |
November 2012 |
December 2012 |
Varience |
PAS |
17,083 |
10,693 |
-37.4% |
LCV |
11,354 |
8,995 |
-20.8% |
MCV |
25 |
1 |
-96.0% |
HCV |
22 |
5 |
-77.3% |
XHV |
19 |
19 |
0.0% |
BUS |
13 |
6 |
-53.8% |
TOTAL |
28,516 |
19,719 |
-30.8% |
Same Month – 2011 vs 2012 |
|
December 2011 |
December 2012 |
Varience |
PAS |
7,523 |
10,693 |
42.1% |
LCV |
6,574 |
8,995 |
36.8% |
MCV |
2 |
1 |
-50.0% |
HCV |
6 |
5 |
-16.7% |
XHV |
51 |
19 |
-62.7% |
BUS |
9 |
6 |
-33.3% |
TOTAL |
14,165 |
19,719 |
39.2% |
Year to Date (Jan to Dec) – 2011 vs 2012 |
|
2011 |
2012 |
Varience |
PAS |
183,535 |
153,195 |
-16.5% |
LCV |
84,125 |
123,584 |
46.9% |
MCV |
132 |
165 |
25.0% |
HCV |
138 |
231 |
67.4% |
XHV |
441 |
517 |
17.2% |
BUS |
90 |
152 |
68.9% |
TOTAL |
268,461 |
277,844 |
3.5% |
General comments on 2012 NAAMSA vehicle sales numbers:
- Despite subdued economic growth in 2012, new vehicle sales performed well for the year. The number of factors that supported domestic sales during the year include:
- The consistently low interest rates throughout the year – including a further 0.5% reduction in the middle of the year (July 2012);
- Continued stability in vehicle affordability, in real terms – lower vehicle price inflation;
- A variety of new model introductions offering wide consumer choices;
- Relatively improved stock availability;
- Competitive activities of industry players leading to industry incentives, special offers and packages for consumers;
- Vehicle replacement demand;
- The factors that may have restricted higher sales growth include:
- Increases in food prices, energy and transport costs impacting on consumer disposable income.
- High consumer Debt to Disposable Income levels, and moderate consumer spending on durable goods.
- The Marikana episode, as well as the levels of industrial action that followed in sectors of the economy would also have impacted on business confidence;
- The transport sector strike during October 2012 may particularly have affected vehicle production and exports.
- The year’s growth in total vehicle sales of 9.2% is in line with growth expectations for 2012. Passenger Vehicles were the main volume drivers of growth, at 11.3%.
- The volumes in December 2012 are in line with seasonality for the month.
- Vehicle exports have seen modest growth
- Exports to Europe have been subdued as a result of the recession and debt crisis in the Eurozone.
- The global economic conditions will remain a big determinant for the export business – diversified export markets will help to mitigate the impact.
Other Observations
- Year on year growth in the sales of Diesel, Hybrid Petrol engine vehicles has been higher than Petrol engine vehicles in 2012.
- There are no significant differences in growth between vehicles of different engine sizes. However, a shift towards affordable vehicles is evident based on sales volumes in different price categories.
- There are competitively priced, high specification and quality vehicles available to the buyer in different categories – this can be one of the factors that are driving the growth in all engine sizes.
- Relatively high fuel prices should also reinforce the growing trend in favour of more fuel efficient vehicles.
Key Consumer Trends
- The Household Debt to Disposable Income ratio remains fairly high at just over 76%.
- Consistent with the lower interest rate levels, the ratio of Debt Service Cost to Disposable Income decreased to 6.5% in the third quarter of 2012 compared to 6.9% recorded in the preceding quarter.
- The number of consumers with impaired credit records also remains relatively very high, making up 46.7% of the total credit active consumer base (according to the NCR).
- Low entry level, and fuel efficient vehicles remain popular particularly resulting from the increased running cost of vehicles.
- The increased fuel prices have impacted on the running costs of vehicles. Fuel prices have risen by 39.98% in petrol (inland) and 45.27% in diesel (inland) since January 2011 (January 2011 to December 2012). Further, the price of fuel in the country has gone up 60.78% in petrol (inland) and 57.03% diesel (inland) since 2008. (Reference: Statistics from the Department of Energy).
- The impact of Gauteng toll fees (when they are implemented) will add to the transportation costs.
Outlook for 2013
- Projections from industry players and analysts range from a conservative flat (zero percentage) growth to an optimistic growth of 8%. Our view is a projected growth of 6% in 2013. The projected growth is derived from some key considerations:
- Consensus amongst economists expects the GDP growth to be muted in 2013 – Standard Bank Economics Desk projects GDP growth around 3.1%.
- Interest Rates are expected to remain at low levels;
- No significant improvement, if any, is expected on Personal Disposable Income levels;
- The impact of Exchange Rate movements on vehicle prices;
- Potential inflationary pressures – expectations are that the current Consumer Price Index (CPI) levels will prevail, but that Vehicle Price Inflation may come under pressure from the Rand Exchange Rate movements;
- Continued introduction of new products and industry competition is expected to stimulate sales activity;
- The domestic new vehicle sales baseline set in 2012 has surpassed the 600,000 figures last experienced in the period between 2005 and 2007, and has seen consistent growth on a yearly basis since the plunge experienced in 2009 when only 395,000 new vehicles were sold. Therefore, sales will be coming of a bigger base.