February is a short-selling month, how did our vehicle sales and export data stack up?
February continued the trend set by January with a double-digit decline over the previous year’s vehicle sales. However, last year’s data was pulled during pre-Covid conditions so the decline is actually in-line with market expectations according to naamsa - the Automotive Business council.
The export market was also slightly down on the corresponding period during 2020, but overall our export channel has delivered more cars over the first 2 months of 2021 than it did in the first 2 months of 2020.
New car sales summary for South Africa - February 2021
Aggregate new vehicle sales of 37 521 units down by 13.3% compared to February 2020.
Passenger car sales of 24 270 units down by 18.1% compared to February 2020.
Light Commercial Vehicle (LCV) sales of 11 246 units down by 3.2% compared to February 2020.
Exports of 29 582 units down by 8% compared to February 2020.
According to naamsa “The performance of the new vehicle market for the first two months of 2021, compared with the pre-COVID first two months of 2020, continues to reflect the economic and social challenges in South Africa considering that the country’s economy was already in a recession before the outbreak of the global health pandemic.
Although a rebound in the new vehicle market is anticipated from March 2021 onwards, compared to the low-base affected COVID-19 corresponding months in 2020, it is likely that both business and consumer confidence will remain subdued over the balance of the year.
naamsa welcomes the February 2021 Budget tax relief naamsa announcements for individual taxpayers, which will reduce the tax burden on mainly the lower and middle-income households, as well as the corporate income tax rate, which was lowered to 27% for companies.
These measures, along with the current low interest rates, low inflation environment, as well as the roll-out of the vaccine in South Africa will aim to support to the new vehicle market over the short to medium term, despite other above cost of living increases such as the hefty rise in the price of electricity of over 15% this year.
Vehicle export numbers continue to gain upward momentum and will be supported by the rebound in global economic growth projected for 2021, spurred by mass vaccination campaigns in various countries to taper the COVID-19 pandemic.
An improvement in the economic climate of the South African automotive industry’s main trading partners will stimulate demand for higher vehicle sales, and subsequently, will result in increased vehicle exports of South African manufactured vehicles to those countries.