Car sales hit new highs in May — and Volkswagen South Africa (VWSA) pushed aside previous market leader Toyota to take the lead in the passenger car market.
New car sales of around 20 000 were 42 percent up on May last year, and almost 30 percent higher than April’s figure, according to figures released by the National Association of Automobile Manufacturers of South Africa.
Eastern Cape News Agency’s Shadley Nash reports from Port Elizabeth that sales of the new Citi Golf Chico, at the lower end of the vehicle market, VWSA’s overall sales last month to 5 274 cars, pushing the company to a market share of 25,9 percent.
Company marketing director Graham Hardy said: “There is clearly a huge pent-up demand from potential buyers — who include thousands of emergent entrepreneurs — and the launch of the Chico is growing the market.”
VWSA said the positive performance by the company was in line with the confident predictions made by new managing director Heinrich Holtman. He had given clear pointers on the need to reduce vehicle prices in real terms for the local industry to survive and grow.
In Johannesburg, Toyota marketing director Johan van Zyl agrees that price is a determining factor, reports Reg Rumney.
“The ability of the motor industry to curb the affordability crisis will determine the overall size of the market,” says Van Zyl.
But, he points out, price is related to the foreign exchange value of the rand. Despite a “local content” programme, a significant number of the components of locally produced motor vehicles are still imported.
Toyota was hit by the strength of the yen against the rand, he says. From the beginning of the year the yen has strengthened against the rand by 20 percent.
Van Zyl is not perturbed that Toyota has been overtaken in the passenger car market. “We have set ourselves a strategic objective to sell 100 000 vehicles. We have done that only once, in 1984.”
Whether Toyota achieves that will depend on a number of factors in the second half of the year, including interest rate movements and vehicle price increases. But he notes that business confidence is still high, and this will be a much better year than last year.
Vehicle sales are themselves an economic indicator. Van Zyl points out the passenger car market was boosted by higher-than-usual purchases by car rental companies, and so it is not an accurate reflection.
Sales of light commercial vehicles are a reflection of the basic business cycle, and these were strong. Sales of light commercials, bakkies and minibuses were 44 percent up on May 1994.