881 New vehicles were sold in January, which represents a 5.6% m/m increase from the 834 sold in December. This is however 0.5% lower than the 885 new vehicles sold in January 2017. From a rolling 12-month basis, a total of 13,195 new vehicles were sold at January 2018 representing a contraction of 17.8% from the 16,043 sold over the same period in 2017 and as illustrated below, 2018 is getting off to a slow start.
A total of 427 new passenger vehicles were sold during January, increasing by 14.8% m/m and 10.6% y/y. January 2018 has so far registered a better start to the year. The previous two years have both recorded a y/y and m/m decline. Passenger vehicle sales have been impacted in large by amendments to the Credit Act that requires tighter credit conditions, as well as by reduced government expenditure and depressed consumer confidence in the current economic climate.
Commercial vehicle sales declined to 454 units, a 1.7% m/m, and 9.0% y/y contraction. For January, 427 light commercial vehicles, 14 medium commercial vehicles, and 13 heavy commercial vehicles were sold. On a year on year basis light commercial sales have declined by 9.1%, medium commercial sales started the year as they did in 2017 and heavy and extra heavy sales have decreased by 13.3%.
Toyota is starting off 2018 with a firm grasp on the market for new vehicle sales with a 43% share of the passenger vehicle market followed by Volkswagen with 19%. Toyota also remained the leader in the light commercial vehicle space with a 62% market share with Nissan in second place with a 11% share.
The Bottom Line
Cumulative new vehicle sales have been on the decline since December 2015 and continues its downward trend in January to its lowest level since March 2012. The current recessionary environment coupled with the reduction in government spending is further highlighted by depressed business and consumer confidence. Tighter credit controls have limited the amount of credit available that is used to finance vehicle purchases, slowing private credit extension, particularly instalment credit, proves as testament to the decline. Lower levels of capital expenditure from corporates remains worrisome, while relief for business and consumers alike rest on the renewed optimism in SA, now under new leadership, which might well avoid a ratings downgrade and possibly opening the door to a rate cutting cycle.