108 TOPCAR.CO.ZA|January 2016Heads down
S
EPTEMBER’S NAAMSANEW
car sales figures showed shrinking
domestic de mand and record
exports; October’s data shows
exports downa marked 13.9% in
additi on to an aggregate 8.6% year-on-year slide
inlocal uptake. But, as ever, it’s the story behind
the figure that makes for a moreaccurate
picture: this time the changeover to the new
Ranger at Ford’s Silverton assembly plant
accounti ng for the sudden exportshor tfall after
months of bu sy boat-loading. The year’s export
total is stillexpected to be a record 335000units
(roughly 58000units up on 2014). The third
quarter exportreportshows strong growth in
most regions especially Europe (up 82.3% from
70839 to 129166 units). African market s lost
23.4% (10784 units), which Naamsa attributes
to, among ot her factors, duty increases in
Nigeria and Zimbabwe, new regulations in
Algeria and broad economic weakening as oil
and ot her commodity prices fell.
The domestic picture is a tad bleak: the
October passenger car market lost 10.9%(4433
units) year-on-year, light commercials are
almost on pa r, losing 4.1% (646 units), medium
commercials are up 11.2% (1064 units), while
heavies slid 6.1% (119 units). The third quarter
results echo this, with th e passenger aggregate
down15000units (also 10.9%) and light
commercials down3.5%. Naamsa points to a
‘slow but steady decline’ inthe passenger sector,
and ‘resilience’ inthe commercialsector, but
notes that ‘the outlook for business and
consumer spending has deteriorated inrecent
months’ and pred icts an 8.5% y/y decline inthe
2015 domestic sales total.
On a moreprosa ic level, the decline can inpart
be linked to lower stock levels as certain models
get deeper into their run-out phase. Likewise,
the marginalimporters willprefer to sell
existing stock before pl undering their coffers on
new and unpred ictable movers when the rand is
trading at vulnerable lows. That said, a busy fewmonths lie inwait as new and revised models
keep coming at alarming pace. The 2016 bakkie
market too, is exploding, with new Hilux,
Navara and Triton likely to precede a refreshed
Isuzu KB. There willbe no shor tage of choices
out there. Meanwhile, consumers remain
heavily indebt ed, and cautious as the rand’s
value continues to fall, at the threat of interest
rate hikes, at the high price of fuel, and the
looming drought-driven impact on food prices.
We won’t even get to the high unemployment,
the lack of consequenc e planning by
government departments, and the mess in
education – no cash for the nation’s building
blocks but R4bn for the pres ident’s pers onaljet.
It is clearly not a time for large-scale capital
purchases. Wesbank’s motor division CEO
Simphiwe Nghona puts it succinctly: ‘With the
prev ailing low confidenc e levels, corporates are
not spen ding money acquirin g new or
repl acement assets, choo sing instead to hold
onto their capital.’ The October channel sales
back this up, with th e y/y rentalmarket figure
down23.8% and the government channel down
25.7%.The consumer demand picture is
different. The dealer channel was only down
2%, and withinthis channel LCV sales were up
1.5%, but applications for finance through
Wesbank were up 7.5%. According to Nghona,
this points to ‘deteriorating credit profiles...with
high levels of household debt and new lend ing
rules that are morestringent’.
It’s never all ba d. Local vehicle assembly has
been given a sensible boost follo wing revisions
to the industry’s Automotive Production
Development Programme (ADPD). The volume
ceiling to qu alify for indi vidualsubsidies has
been lowered from 50000units a year to 10000
units, with th e subsidy now on a sliding scale
from 10% to 18%.There is moresupport to
underwrite tooling costs and local component
sourcing, all likely to benefit new small business
planning, yet not jeopardise the substantial
investments of existing assemblers.tcCAR SALES
KEY INDICATORS – OCTOBER 2015(%change vs Oct 2014)
INDUSTRY TOTAL54 244 (-8.6)|PASSENGERCARS 36 175 (-10.9)|LCV 15 171 (-4.1)|EXPORTS 27732 (-13.9) YEAR-TO-DATE517 322 (-4.5)Exports dip, but not for long...
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