February last year was the last normalised sales month before lockdown regulations sent the motor industry spinning. Back then, the market declined just 0,7% against 2019, a far cry from the 13,3% decline in sales experienced this February compared to it.
Relatively, that represents some form of stability this year compared to January’s decline of 13,9%. According to Naamsa – The Automotive Business Council, the market sold 37,521 units during the month.
“Interestingly, the correlation between market activity for WesBank between February 2020 and February 2021 is uncanny in its similarity,” says Lebo Gaoaketse, Head of Marketing and Communication at WesBank Vehicle and Asset Finance. “Were it not for the seismic shift that came to bear in March last year, any market commentator would have been forgiven for ignoring its normality.”
WesBank made its highly anticipated market forecast for the year a few weeks ago, calling the market down 15,8% in normalised terms this year. In effect, that would represent a 12% growth compared to last year off the back of the lack of sales during the initial lockdown and the slow recovery for the remainder of last year. “These figures will begin to make more sense from March, but will equally present a skewed picture given the interrupted sales picture of last year,” said Gaoaketse.
Light Commercial Vehicle (LCV) sales continued to buoy the depressed market picture. The segment’s 11,246 sales were 3,2% lower than February last year. Even more reassuringly, dealer sales in this segment showed a 1,1% increase in activity, accounting for 10,080 of those sales.
Passenger cars by comparison declined 18,1% to 24,270 units. While the rental market remained subdued, down 27,8%, the vast majority of its purchases were passenger cars: down 28,9%; but with 3,498 units injected into the market volume.
“The relative stability in the market during the first two months of the year should provide some level of relief for the industry,” said Gaoaketse. “Month-on-month, February sales show a fairly significant improvement compared to the first month of the year. With consumers better-adapted to the pandemic and living rhythm in the country, low interest rates continuing to assist indebtedness, and economic sectors slowly returning to more regular operations, there is much to be hopeful for the South African motor industry.”
The return today to Level 1 lockdown regulations will once again help stimulate economic recovery. “While we should expect varying degrees of restrictions during the year as Government manages the inevitable waves of the pandemic, the new vehicle market needs to gain momentum in its own recovery and capture the demands of slowly normalising replacement cycles,” says Gaoaketse.