New vehicles sales slow off the mark

Most major segments recorded year on year declines - new cars 7.0%, light commercials 6.6%, medium commercials zero, heavy trucks 19.5% and extra heavy trucks 6.1%. Moreover, the January 2014 export sales at 13,960 units reflected a decline of 3,433 vehicles or a fall of 19.7% compared to the 17,393 vehicles exported in January last year.

Overall, out of the total reported Industry sales of 53,025 vehicles, about 42,881 units or 80.9% represented dealer sales, 13.5% represented sales to the vehicle rental Industry, 3.0% to Industry corporate fleets and 2.6% to government.

The new car market was particularly sluggish with a fall of 2,857 units, which is 7% down on January 2013. The car rental Industry had once again made a strong contribution and had accounted for 18.1% of new car sales in January 2014. Exports, too declined by nearly 20% - 13,900 compared to 17,393 the year before.

Sluggish

Domestically this year is expected to continue in sluggish mode mainly because of above inflation average new vehicle price increases, the slowdown in the economy, petrol price increases and recent rising interest rates.

Industry sources are hoping that total sales this year would at least match 2013 figures.

Toyota was the market leader with a 20.1% share of a declining market.

"The market shows clear signs of slowing, despite the normal seasonal anomalies that we expect in January," says Calvyn Hamman, Senior Vice President of Sales and Marketing at Toyota South Africa Motors.

Hamman refers to the general practice of many new vehicle owners and some vehicle brands to suspend vehicle registration in December and register it in the new model year. This leads to a drop in recorded sales in December and a jump in sales in January.

"We expect that the market in 2014 will stagnate at 2013 levels or even drop somewhat and the first month's sales is evidence of this," says Hamman. "This is due in part to the underlying economic drivers, such as increasing inflation, a weakening rand and growing consumer debt."