South African motor retailers on Friday applauded the increase in passenger vehicle sales, as reported by the National Association of Automobile Manufacturers of South Africa.
McCarthy Motor Holdings chairperson Brand Pretorius noted that the strong upsurge in new vehicle sales also continued.
“On a year-to-date basis, the total vehicle market is up 19,6% on the same period last year, which is most encouraging,” he added.
“It is clear that, for the first time in many years, the market is firing on all cylinders!”
He maintained that June sales were stimulated by aggressive dealer sales campaigns.
“Two factors gave rise to this strong sales push. Firstly, dealers maximised sales in order to qualify for their quarterly volume incentive bonuses from the vehicle manufacturers. Secondly, many dealers had their financial year-end on June 30 and went all out to achieve their targets,” he revealed.
Pretorius reported that the fleet market was strong thanks to a high level of business confidence and an increased level of business activity in many sectors.
Nissan sales and marketing director Mike Whitfield said the motor industry remained well-placed to record one of its best sales years for a long time.
“The industry has managed to sustain encouraging growth throughout the first half of the year thanks to strong private consumer demand, which is in turn based on the strong economic fundamentals that continue to exist,” Whitfield announced.
“If these fundamentals, which include stable interest rates and vehicle prices, continue, we can expect continued growth during the second half of the year. June sales were boosted by the start of both rental company and government buying.”
Whitfield added that Nissan enjoyed an excellent first six months, boosted by its best car and light commercial vehicle sales for June since 1995.
“Dealer sales continue to drive growth and with the introduction of new models between now and the end of the year, we expect to record one of our best years in a long time if current market conditions prevail,” said Whitfield.
While the fleet market remained buoyant, Pretorius claimed that the same could be said of the rental, government and private sectors.
“Orders from both the car-rental and government sectors are showing meaningful growth. And demand from private buyers is strong due to the enhanced affordability of vehicles, brought about by vehicle price stability over the past 18 months and much-reduced financing costs,” he noted.
Pretorius said thanks in part to the high level of business confidence and an increased level of business activity, medium commercial vehicle sales were nothing short of astounding.
According to McCarthy’s Brand Pretorius, the outlook for the remainder of the year is positive.
“Due to the strength of the rand, it is likely that vehicle price stability will prevail. Interest rates should remain at current levels or, at worst, increase by 0,5%. And major new product launches, which are imminent, will entice customers into the market,” he predicted.
The only dark cloud on the horizon, according to Pretorius, pertains to possible labour unrest, as a consequence of the current deadlock in the negotiations between the vehicle manufacturers and their labour union, the National Union of Metalworkers of South Africa.
“Extended strike action will affect sales, as new vehicle stock levels are already low.”
“One would hope that a settlement will indeed be reached, as a strike would also undermine the motor industry’s export platform over both the short and medium term. That is a situation our country can ill afford,” Pretorius added. — I-Net Bridge