Polo and Figo still popular despite tumbling car sales

Cape Town - While vehicle sales have fallen dramatically in March, Polo and Figo remain popular with car buyers, according to data from the National Association of Automobile Manufacturers of South Africa (Naamsa).

Naamsa said on Friday that new vehicle sales plummeted 14%, year-on-year (y/y), with only 47 631 new vehicles being sold in March.

Passenger car and light commercial vehicle (LCV) sales fell dramatically, with respective y/y declines of 13.4% and 14%. Sales of buses, as well as medium, heavy, extra heavy commercial vehicles also fell more than 20%.

The top three selling passenger vehicles were Polo Vivo (2 367), Polo (1 752) and Ford Figo (1 180), while the top three selling LCVs were Hilux (3 273) Ford Ranger (3 004) and Nisan NP200 (1 341).

Sales through the dealer channel were down 18% y/y, while sales through the rental channel continued to contribute to activity in the new vehicle market, seeing y/y growth of 220% in March.

Naamsa cited the public holidays in March for taking a punishing toll on new vehicle sales.

“The March public holidays, combined with other economic headwinds, have had a very negative impact on the performance of new vehicle sales. With three fewer business days and consumers going away on holiday there was major disruption for car dealers,” said WesBank head of brand and communications Rudolf Mahoney.

“However, the public holidays are not solely responsible for these sales figures. The massive decline in commercial vehicle sales is attributed to low business confidence in the prevailing economic climate.”

Demand for vehicles, as measured through the volume of finance applications received, was also negatively affected.

WesBank’s data shows that new vehicle finance applications went down by 20% y/y, while demand for used vehicles declined 3%. Demand for used vehicles now outstrips new vehicles 2.36:1 – a figure last seen in December 2009.

“It’s safe to say that we’re now in a used market. Although demand softened slightly for used cars, it remains strong when compared to the rest of the market,” said Mahoney.

“The used-to-new sales ratio now sits at 1.5:1, indicating that consumers who previously bought new are now taking their budgets to the used market. Those who have cars are also choosing to hold onto them for longer, further affecting vehicle sales.”

At the Car Of The Year banquet in March WesBank forecast that consumers are expected to shift to the used market this year, resulting in total industry new vehicle sales declining by 12%.