02 Apr 2018
Vehicle Sales update: New vehicle sales grew by 1.1% y/y in March, on the back of a recovery in passenger vehicle growth.
- Domestic vehicle sales grew in March at a rate of 1.1% y/y, following a contraction of 4.0% y/y in February 2018 (see figure 2).
- The commercial vehicle category continued to fall in March, albeit at a lower rate, while passenger vehicle sales rose 3.7% y/y in March, after falling in February.
- According to motor industry analysts anticipatory buying ahead of tax and fuel levy rises, stipulated in the 2018 Budget, could be a reason for the increase in new vehicle purchases.
- Furthermore recent positive developments, including the avoidance of a credit rating downgrade by Moody’s, together with a 25bp cut in interest rates should lend support to domestic new vehicle sales.
- According to Wesbank car sales are showing promise, with February’s small decline the result of “car rental companies reigning in orders after a strong 2017”. Furthermore “credit applications for new cars grew 12% - twice the rate of increased demand for used vehicles”.
- On the other hand new vehicle exports continued to fall in March, falling by 8.11% y/y, after February’s 5.8% dip. They are likely to remain subdued for the next few months, as BMW, one of SA’s largest vehicle exporters announced it had concluded production of its 3 series model at its Rosslyn plant.