Naamsa vehicle sales report for August confirms pressure on domestic passenger vehicle sales

“The domestic passenger vehicle sales will continue to show pressure for the duration of 2014 given interest rates and car price increases which are above inflation. As a result, the expected reduction in the petrol price by 67c a litre on Wednesday will not have any impact on vehicle sales. However, the good news is that the export market will continue to be the star performer in the motor industry given the stability going forward post the wage settlements.”

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General Comments on August 2014 NAAMSA sales:

• The month of August 2014 experienced a (-3.25%) decrease in sales compared to July 2014.


• Month on Month both Passenger (-4.96%) and Light Commercial Vehicles (-0.88%) experienced negative growth.


• Year on Year monthly comparison shows a decrease of -1.37% in August 2014 compared to August 2013.


• Year to date (January – August 2014) comparisons shows that vehicle sales are down by -4.33% in the first 8 months of the year when compared to last year.


• Month on month Exports increased in August (10.08%) with Passenger vehicles increasing by 31.09% and Light Commercial Vehicles growing by -17.10%.


• Year on year monthly comparison shows an improvement in exports of 18.52% in August 2014 compared to August 2013.


• AMH & AAD saw an increase in August 2014, 26.35% month on month.

General Comments on August 2014 Standard Bank VAF Personal Applications:

• In August 2014 applications for both new and used vehicles experienced negative month on month growth of -11.8% and -8.3%, respectively.


• Year on year monthly comparison on applications shows a decline in both new (-39.3%) and used (-8.5%) vehicle market applications in August 2014 compared to August 2013.


• Applications in both Passenger Vehicles (-9.5%) and Light Commercial Vehicles (-10.5%) in the Personal market had negative month on month growth in August 2014.


•  Year on year monthly comparison shows negative growth for both Passenger Vehicles (-2.2%) and Light Commercial Vehicles (-1.3%) in August 2014.


• The proportion of applications with RV’s stayed at 18.7% in August 2014 (6.3% year on year increase in RV’s).


• The proportion of applications with deposits decreased by -6.3% year on year in August 2014 compared to August 2013.


• The Average Contract Term on applications increased from 66.6 months to 66.8 months (August 2013 to August 2014).


• The average application size increased to R207 612.

Nicholas Nkosi – Head of Standard Bank Vehicle and Asset Finance – Personal Markets

General Comments on August 2014 Standard Bank VAF Personal New Business:

• In August 2014 Personal new business experienced negative month on month growth in both new (-5.5%) and used (-11.6.9) vehicle markets.


• Personal new business year on year comparisons shows a decline in both new (-35.0%) and used (-33.9%) vehicle markets in July 2014 compared to August 2013.


• Passenger vehicles had negative month on month growth of -9% while Light Commercial had positive growth of 1.0%.


•  Personal new business year on year monthly comparison shows a decline for both Passenger Vehicles (-45.3%) and Light Commercial Vehicles (-47.1%) in August 2014 compared to August 2013.

Also view:

Vehicle Finance, Car Insurance and Road Safety

Buying and Selling a Vehicle – Informed decisions and the Vehicle Retailer

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Naamsa vehicle sales report for August confirms pressure on domestic passenger vehicle sales

Comments on NAAMSA New Vehicle Sales Report – July 2014 – Standard Bank

 “The National Union of Metalworkers of South Africa (Numsa) strikehas had little effect on vehicle sales for July, this is because most of the manufacturers would have factored it in. However, it will still impact on the stock reserves going forward. The manufacturers would still have to catch up on lost production to make up for both the local and the export market. The good news is that the strike was not prolonged. Therefore the has been little impact on the July vehicle sales figures.”

 

General Comments on July 2014 NAAMSA sales:

• The month of July 2014 experienced a 9.2% increase in sales compared to June 2014.


• Month on Month only Passenger (12.9%) and Light Commercial Vehicles (3.69%) experienced positive growth.


• Year on Year monthly comparison shows a decrease of -1.5% in July 2014 compared to July 2013. The average sales per day in July 2014 were less than July 2013 (2,136 vs 2,169 with the same number of business days (27) in both months).


• Year to date (January – July 2014) comparisons shows that vehicle sales are down by -4.7% in the first 7 months of the year when compared to last year.


• Month on month Exports decreased in July (-3.1%) with Passenger vehicles declining by -8.0% and Light Commercial Vehicles growing by 4.9%.


• Year on year monthly comparison shows a decline in exports of -16.1% in July 2014 compared to July 2013.


• AMH & AAD saw an increase in July 2014, 40.2% month on month.

General Comments on July 2014 Standard Bank VAF Personal Applications:

• In July 2014 applications for new vehicles experienced negative month on month growth of -10.2% while applications for used vehicles had positive month on month growth of 3.6%.


• Year on year monthly comparison on applications shows a decline in both new (-28.9%) and used (-6.9%) vehicle market applications in July 2014 compared to July 2013.


• Approval rate in the new vehicle market increased by 0.3% month on month while approval rate in the used market decreased by -5.1% month on month.


• Applications in both Passenger Vehicles (-0.9%) and Light Commercial Vehicles (-13.2%) in the Personal market had negative month on month growth in July 2014.


•  Year on year monthly comparison shows negative growth for both Passenger Vehicles (-15.8%) and Light Commercial Vehicles (-22.2%) in July 2014.


• The proportion of applications with RV’s increased to 18.7% in July 2014 from 17.0% in June 2014 (1.7% month on month increase).


• The proportion of applications with deposits decreased to 34.1% in July 2014 from 35.8% in June 2014 (-1.7% month on month increase).


• The Average Contract Term on applications increased from 66.6 months to 67.5 months (July 2013 to July 2014).


• The average application size increased from R188 284 in July 2013 to R207 064 in July 2014, a 10.0% year on year increase.

General Comments on July 2014 Standard Bank VAF Personal New Business:

• In July 2014 Personal new business experienced positive month on month growth in both new (5.4%) and used (14.9) vehicle markets.


• Personal new business year on year comparisons shows a decline in both new (-46.9%) and used (-48.5%) vehicle markets in July 2014 compared to July 2013.


• Passenger vehicles had positive month on month growth of 11.9% while Light Commercial had negative growth of -8.4%.


•  Personal new business year on year monthly comparison shows a decline for both Passenger Vehicles (-46.5%) and Light Commercial Vehicles (-48.0%) in July 2014 compared to July 2013.


• The proportion of new business deals with deposits increased to 43.3% in July 2014 from 42.7% in June 2014 (0.6% month on month increase and 1.8% year on year increase).


• The proportion of new business deals with RV’s increased to 23.9% in July 2014 from 22.8% in June 2014 (1.2% month on month increase and 9.0% year on year increase).


• The Average Contract Term stayed the same at 65.8 months (July 2013 to July 2014).


• The average deal size increased from R241 116 in July 2013 to R289 423 in July 2014, a 14.9% year on year increase.

General Comments on Standard Bank Personal VAF Book:

• Personal Market book shows new vehicle market increased from 55.7% in July 2013 to 57.3% in July 2014, while used vehicle market decreased from 44% in July 2013 to 43% in July 2014.


• Passenger Vehicles stayed the same at 89% between July 2013 and July 2014 while Light Commercial Vehicles declined from 11% in July 2013 to 10% in July 2014.

General Macro and Industry Comments:

• The country’s Q1:14 Gross Domestic Product slowed to 1.6%  y/y from 2.0% in Q4:13 and from 3.8% q/q in Q4:13 to 0.6% q/q in Q1:14. Standard Bank Research has revised its GDP forecast for 2014 to 2.0% down from 2.1%.


• Q2:14 Unemployment rises to 25.2%, Standard Bank research expect unemployment to rise over the next 18 months as capacity remains under-utilised, interest rates rise and strikes persist.


• The MPC hiked the repo rate by 25 bps in their July Statement. Standard Bank research predicted this outcome, arguing that the SARB would take rates up by 25 bps premised largely on concerns that Bank might have regarding their perceived credibility and effectiveness at anchoring inflation expectations.


• Headline annual inflation rate (CPI) in June 2014 was 6,6%.  This rate was the same as the corresponding annual rate of 6,6% in May 2014.  On average, prices increased by 0.3% between May 2014 and June 2014. Transport index decreased by 0.1% between May 2014 and June 2014, this was mainly due to a 22c per litre decrease in petrol price. The annual rate decreased to 8.6% in June 2014 from 8,9% in May 2014, According to Standard Bank Research inflation forecast, we expect that inflation has already peaked in Q2 at 6.5% y/y.


• Fuel prices have risen by 5.4% in petrol (inland) and risen by 0.2% in Diesel (inland) since Jan 2012 to July 2014. Fuel prices have risen by 83.6% in petrol (inland) and risen by 87.1% in diesel (inland) since Jan 2010 to July 2014. Further, the price of fuel in the country has gone up by 289% in petrol and up by 413.3% in diesel since Jan 2001. Petrol price will increased by 29c per litre and diesel increased by 14c per litre on 2nd July.


• All of these factors are expected to hinder vehicle sales growth.

Fuel Types

• In the month of June 2014, both Petrol (7.5%) and Diesel (5.3%) vehicle sales had positive month on month growth.


• Year on Year June 2014 versus June 2013 Petrol vehicles declined by -7.1% and Diesel vehicles grew by 7.5%.


• Year on Year YTD comparison for 2014 shows that Petrol vehicle sales declined by -7.7% while Diesel vehicle sales declined by -0.6%.

NAAMSA Seasonality and Average Selling Days:

• The average number of sales for July since 2010 has been 50,670 and the average number of sales for July since 2012 has been 57,034.


• On average July has ranked the 2nd best performing month in the year.


• July 2014 had 27 selling days, with an average of 2,136 sales per day.


• July 2013 had 27 selling days as well, with an average of 2,169 sales per day and was ranked the best performing month last year.


• July 2014 has ranked 9th best performing out of the 91 months since January 2007.

Also view:

Vehicle Finance, Car Insurance and Road Safety

Buying and Selling a Vehicle – Informed decisions and the Vehicle Retailer

 

Comments on NAAMSA New Vehicle Sales Report – July 2014 – Standard Bank

NAAMSA vehicle sales report for May reveals vehicle retail vulnerability in low economic growth

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General Comments on May 2014 NAAMSA sales:

• The month of May 2014 experienced a 7.41% increase in sales compared to April 2014.


• Month on Month all goods types experienced positive growth.


• Year on Year monthly comparison shows a decrease of -9.22% in May 2014 compared to May 2013. The average sales per day in May 2014 were less than May 2013 (1,979 vs 2,096 at 25 business days and 26 business days respectively).


• Year to date (January – May 2014) comparisons shows that vehicle sales are down by -5.89% in the first 5 months of year when compared to last year.


• Month on month Exports decreased significantly in May (-7.05%) with Passenger and Bus being the main contributors, although in comparison to May 2013, there was a decrease of 40.5% in exports experienced.


• AMH & AAD saw an increase in May 2014, although at a slightly low percentage of 1.95%.

General Macro and Industry Comments:

• The country’s Q1:14 Gross Domestic Product slowed to 1.6% y/y from 2.0% in Q4:13 and from 3.8% q/q in Q4:13 to 0.6% q/q in Q1:14. Standard Bank Research has revised its GDP forecast for 2014 to 2.0% down from 2.1%.


• The MPC left the repo rate unchanged in the third week of May from the 0.50 bps rate hike in the beginning of the year (end January).


• Headline annual inflation rate (CPI) increased from 6.0% y/y in March 2014 to 6.1% y/y in April 2014. On average, prices increased by 0.5% between March 2014 and April 2014. Transport index increased by 0.4% of a percent point between March 2014 and April 2014, this was mainly due to a 5c per litre increase in petrol price. The annual rate decreased to 6.8% in April 2014 from 6.9% in March 2014.


• Standard Bank research commented in addition, new vehicle price inflation accelerated to 7.0% y/y in April, from 6.7% y/y in March, which could be on the back of the weaker currency.


• Fuel prices have risen by 34.3% in petrol (inland) and risen by 26.5% in Diesel (inland) since Jan 2012 to May 2014. Fuel prices have risen by 82.7% in petrol (inland) and risen by 88.6% in diesel (inland) since Jan 2010 to April 2014. Further, the price of fuel in the country has gone up by 287% in petrol and up by 417.2% in diesel since Jan 2001.


• All of these factors are expected to hinder vehicle sales growth.

Factors that will inhibit growth include the following:

• Low level of economic growth is expected in 2014, 2.0% for 2014 (Standard Bank Research).


• Rising inflationary pressures will remain a challenge. Food, fuel, above inflation wage settlements, as well as exchange rate fluctuations will pose risks to the inflationary outlook.


• Exchange rate fluctuations will also have an impact on vehicle pricing. With 2 thirds of vehicles sold in RSA being imported (NAAMSA) pricing will be vulnerable to a depreciating Rand.


• The vehicle replacement cycle may have reached its peak, putting further dampening pressure on sales growth.

South African Vehicle Exports: (1st Quarter)

• From the first quarter of 2014 to the first quarter of 2013 export volumes decreased by 16.42%. This equates to 11,867 less vehicles exported in the first 3 months of 2014 compared to 2013.
• PAS vehicles (48.9%) and LCV’s (50.7%) together made up 99.6% of total vehicle exports in the first quarter 2014.
• These seem to suggest that PAS are in decline, with a decrease of 6.43% from 2012 to 2014 while LCV’s increased by 15.74% during the same period.
• As at the end of the 1st quarter of 2014 South Africa’s largest trading continent in terms of vehicle exports was Europe with 37%, followed by Africa with 32%, and North America with 17%. Asia and Australasia.
• Even though Exports decreased overall, Africa and Europe have both increased in their percentage contribution of vehicles being exported from South Africa, growing by 14.65% and 16.04% respectively. Asia and North America declined by -8.05% and -33.62%.
• In terms of volumes South Africa exported 20,495 vehicles into Africa in 2013 compared to 19,639 in 2014 showing a 4% decrease. Europe had 23,013 vehicles imported from South Africa in 2013 decreasing to 22,318 vehicles in 2014 showing a 3% decrease.
• The decrease in export volumes could be due to the Mercedes-Benz C-Class model not being exported in the first half of the year.
• The key driving factor in the decrease in the number of vehicles exported into Africa may be down to the decrease in the number of Light Commercial Vehicles (LCV) being exported. LCV’s grew by 18.35% from 2012 to 2013 (15,019 to 17,775), however, in 2014 LCV’s declined by 14.41% from 2013 (17,775 to 15,214). Of the total vehicles exported into Africa LCV’s made up 83% and 87% in 2012 and 2013 respectively, this has dropped to 78% in 2014.
• Although Europe’s total % contribution has increased over the years we can see that the percentage split of Passenger vehicles have decreased from 56% in 2012, to 48% in 2013 and 38% in 2014. The decrease in Europe’s Passenger vehicle imports is due to the increase in volume of LCV vehicle exported. In the first 3 months of 2012 South Africa exported 9,287 LCV vehicles to Europe; this has increased to 13,819.

NAAMSA Seasonality and Average Selling Days:

• On average May has ranked the 9th best performing month in the year since 2012. May 2014 had 25 selling days (Mon-Sat), with an average of 1,979 sales per day. May 2013 had 26 selling days, with an average of 2,096 sales per day.
• Between Jan and April 2014 the average selling per day has been 2,104.
• May 2014 has ranked the 44th best performing month out of the last 89 months since January 2007 and 4th best performing month this year.
• The average number of sales for May since 2012 has been 52,270 and the average number of sales for May since 2010 has been 45,677.

New vs Used Deals – SBSA vs Trans Union

• VAF saw a decline in application volumes from November 2013 to December 2013 for both new (18%) and used (19%), this then increased again from December 2013 to January 2014 (New – 11% & Used – 16%) and has subsequently remained flat during April 2014.
• Comparing TransUnion April 2014 to YTD April 2013, there is an increase of 21% in new vehicle sales and an increase of 20% in the used vehicle market.
• The new to used ratio in the market is showing an upwards trend, with currently 1.67 used cars being sold for every new.

[ Comments on NAAMSA New Vehicle Sales Report - May 2014 by Nicholas Nkosi – Head of Standard Bank Vehicle and Asset Finance - Personal Markets]

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NAAMSA vehicle sales report for May reveals vehicle retail vulnerability in low economic growth