NADA Comment: South Africa’s motor dealers show resilience in tough trading conditions

“South Africa’s network of retail motor vehicle dealers once again showed tremendous resilience in tough trading conditions in August, with numbers pointing to a much more resilient market, which is encouraging,” commented Mark Dommisse, Chairperson of the National Automobile Dealers’ Association (NADA) after analysing August sales figures distributed by naamsa I The Automotive Business Council today.

“Overall sales were up to 41,425 units, which was a 24.6% improvement on the figure for August a year ago and a healthy 8,364 up on July 2021. The Retail dealer channel contributed a massive 83.6% of these sales – a testament to how important franchise dealers are in the South African automotive ecosystem.

“This was an outstanding performance as the economy is still recovering from the effects of the unrest in KwaZulu-Natal and Gauteng in July, as well as the substantial disruptions at the ports as a result of the unrest, coupled to the cyber-attack on Transnet operations. We knew we had to deal with a loss of both business and consumer confidence as well as supply challenges, but still managed to deliver a strong recovery over the previous month. Year-to-date sales are up 32.4%, which is most encouraging.

“There are other forces at play too, with supply being the major one. The global shortage of semiconductors continues to play havoc with production and is causing many factories to be idled. This shortage is likened to the COVID-19 pandemic, in that it will not go away. In fact, the problem seems to be getting more serious as time goes by with manufacturers either pausing production or deleting chip-specific functionality from certain model lines.

“Then, here in South Africa, we are still encountering delays caused by the unrest and the port disruptions which is keeping customers waiting for their new vehicles. In some cases, they are tired of waiting and are changing brands by shopping elsewhere. Unfortunately, we will be forced to face this uncertainly for a while still and I don’t think supply will stabilise for some time to come.

“We also have to deal with a fluctuating Rand – down one day and up the next. This is a volatile situation, and we believe this rollercoaster ride will continue in the coming months, with political uncertainty also playing a role.

“What we, as NADA, believe, is that it is most important to maintain Covid-19 risk mitigation protocols at our dealerships and encourage as many people as possible to get vaccinated ahead of the predicted Fourth Wave so as to limit future economic fallout and unemployment, which are already at crisis proportions,” concluded Dommisse.

NADA is a proud constituent association of the Retail Motor Industry Organisation (RMI).