Resilient SA market shrugs off obstacles to growth

New vehicle sales in September 2022 (47 984 units) were 11.2% up on September 2021, according to naamsa.

The September 2022 figures were also 1.8% up on August 2022 as the resilient local market shrugged off the worldwide semi-conductor shortage affecting motoring brands and markets across the globe, international shipping constraints and rising levels of inflation. At home, there were positive developments as the domestic economy continued its recovery from the April floods in KwaZulu-Natal and Toyota’s production facility moved back to full operation.

Passenger vehicle sales grew by 9.7% year-on-year in September 2022 to 32 392 units, and Light Commercial Vehicles sales jumped by 15.1%, reaching 12 588 units, compared to September 2021.

New vehicle sales

Overall sales for the first nine months of 2022 were 13.3% higher than 2021, and 47.6% above sales in the same period in 2020, when the economy was moving through various stages of lockdown.

Dealer sales accounted for 84.6% of the 391 501 units sold in the first nine months of the year, and naamsa reported that while Passenger vehicle sales jumped 21.0% year-on-year, LCV sales dropped by 2.7% compared to the corresponding period in 2021.

A possible factor as to why LCV sales have not been tracking as strongly as the Passenger market is the Toyota factory closure due to the flood damage that took place in the second quarter. This has placed additional pressure on this market over the last six months, with further reductions in available product.

The car rental industry accounted for an estimated 13.5% of new Passenger car sales over the first nine months of 2022, slightly behind the 13.6% share in the 2021 window, but well ahead of the 8.4% in 2020 when rental companies were looking to reduce fleet numbers because of limited tourism opportunities during the pandemic.

January to September: passenger and light commercial new vehicle sales

We anticipate market growth in 2022 despite pressures throughout the macroeconomic environment. We expect GDP to grow less than it did in 2021, headline consumer inflation to exceed the upper reaches of the Reserve Bank’s target range and the Reserve Bank to hike interest rates over the course of the year.

The war in the Ukraine is already having an impact on global markets and adds another negative dimension to the semi-conductor shortage, rising levels of inflation around the world and supply chain issues.

This puts projected new vehicle sales for 2022 at around 519 500 units, of which 490 000 are Light Vehicles (Passenger and Light Commercial), an overall increase of 12%.

New vehicle sales: 2017 to 2022

Market observations

The Crossover segment (which includes the Haval Jolion, Toyota Corolla Cross and Volkswagen T-Cross) led the Light Vehicle (Passenger and LCV markets) segment for the first nine months of 2022, with 88 486 new units sold. Dealer sales accounted for 89.7% and the Rental channel 7.1%.

Crossover segment sales were also 54% up from 2021, which in turn was 74% ahead of the segment total for the first nine months of 2020. This makes the Crossover segment the best performing Light Vehicle segment in terms of sales growth.

Over the first nine months of 2022, the Crossover segment made up 24% of all Light Vehicle sales, up from the 18% market share a year ago.

The Entry segment (including Renault Kwid, Toyota Starlet and VW Polo Vivo) was second best in terms of volume with 69 310 units sold over the first nine months of 2022. Sales were 15% up on 2021.

Year-on-year Multi-purpose vehicle (MPV) sales (including Hyundai Staria, Suzuki Ertiga and Toyota Rumion) grew significantly by 27% compared to the first nine months of 2021.

Light vehicle segments: share of light vehicle market (January to September)