NADA encouraged by September sales

NADA chairperson, Mark Dommisse, welcomed the 15.8% year-on-year increase in overall new-vehicle sales in the month.

“With these volumes, the industry could expect to end the year at the high end of analysts’ forecasts for 2021,” he says.

Total domestic new-vehicle sales increased by 15.8% in September 2021 to 43 130 units from the 37 237 vehicles sold in the same month in 2020.

Sales of new passenger cars increased by 30.5% year-on-year in September 2021 to 29 538 units but light commercial vehicles, bakkies and mini-buses declined by 10.9% to 10 943 units in the same period.

Domestic new medium commercial vehicle sales rose by 11.6% year-on-year in September 2021 to 762 units and heavy truck and bus sales by 15.8% to 1 887 units.

Dommisse says it was heartening to see that 82.7% of the total new vehicle volume was sold through the retail dealer channel.

“The 1 506-unit growth month-on-month is encouraging, with the biggest increase seen in passenger vehicle sales, which is also a positive sign as the largest volume segment,” he says.

Dommisse reckons the healthy contribution of 12.4% by the rental industry to total sales bodes well for the future supply of vehicles to the pre-owned market, where stock is currently in short supply.

He says this segment of the market has only recently seen a resurgence in buying since defleeting drastically in 2020 when the global pandemic hit South Africa.

“Used car values should continue to hold at higher-than-expected levels as long as there is a stock shortage in new vehicles.

“Fortunately for dealers, the strong demand for used vehicles has been able to mitigate some of the losses in new-vehicle sales volumes, owing largely to the global shortage of microprocessors,” he says.

Dommisse adds that the impact of the ongoing microchip shortage will result in more brands than previously experiencing stock shortages in September 2021.

“There is stock, but not in the best model mix, which is affecting the dealers’ ability to supply models the customers want.

“However, despite the lack of semiconductor chips affecting supply, manufacturers have worked extremely hard to supply stock to the market,” he says.

Dommisse says the unwelcome news is that this situation, which has already cost the global motor industry an estimated $210 billion as many manufacturing plants have had to either close or run at low output levels, is unlikely to improve significantly in the next 12 to 18 months.

WesBank head of marketing and communication, Lebogang Gaoaketse, says new-vehicle sales in September 2021 built on the sales successes achieved in August 2021, with sales in the month continuing to capture reassuring consumer demand and providing some reassurance for a stronger final quarter.

“While stock availability in the new-vehicle market remains stressed, forcing some consumers into the pre-owned market, the sheer demand remains encouraging for the industry once global stock shortages are alleviated,” he says.

Gaoaketse says the light commercial vehicle market was most extensively impacted by the stock situation, with sales 6.8% or 802 units lower than in August 2021.

He says demand in the pre-owned market remains very strong but used car price inflation may begin impacting this momentum.

“That demand may become more about preferential specification than affordability at a time when the trade is paying a premium on certain pre-owned models,” he says.