The latest new vehicle sales statistics released by Naamsa (The Automotive Business Council) reveal that the sector is in decline.
Summated results showed new vehicle sales fell by 4.1% year on year in September 2023. New passenger car sales dropped 8.4% compared to September 2022, while the light commercial vehicle segment was the only sector to experience growth at 4.6% year-on-year.
The authority cites external business factors, including high fuel prices, energy demands, and Eskom’s incapacity to meet such, as reasons for the sector slowing down.
Contractions in household consumption expenditure, rising debt that exceeds disposable income by over 60%, high inflation rates, and a higher cost of living impacted by rising fuel and energy costs place further pressure on new vehicle sales.
While mid-month forecasts predict a significant decrease at the pumps in November, the question of whether Iran will become implicated in the Israel–Hamas war looms. This makes it challenging to forecast future oil prices, which inform South Africa’s import costs as the price is set at the international level.
Park Village Auction’s Clive Lazarus says that while it is a challenging time for the new car market, demand for auction vehicles is increasing, albeit primarily for affordable cars.
Notes Clive: “The new car sales figures largely reflect the current environment. Times are tough, and buyers across the board are turning over every cent before committing to purchases, especially high involvement purchases such as cars.”
That said, Clive points out that there will always be people with money to spend whatever the economy, as evidenced by the consistent performance at PVA’s used vehicle auctions.
As such, PVA has issued its passenger and commercial vehicle auction calendar for the remainder of 2023 as follows:
In closing, Clive says, “The fact that auctions achieve rates that are on average 10% lower than dealer prices entrench them as the most affordable way to acquire newer wheels.”