February sales encouraging, but consumers will be hit with 'double whammy' in March - NADA

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Mitsubishi dealership
Mitsubishi dealership

• 37 521 new vehicles were sold in South Africa in February 2021.

• The sales figure is an improvement over the figure registered in January 2021.

• Local consumers are hit hard with increases in the prices of fuel and electricity in March 2021.

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Vehicle sales in February 2021 were more encouraging than expected for a shorter trading month than January. Overall dealer sales, across all segments, increased by almost 3000 units month-on-month, and it was heartening to see that Passenger Vehicle sales increased by almost 1500 units and Light Commercial Vehicle sales improved by close to 2000 units.

The slow start to the year had been expected as the coronavirus and sluggish local economy has negatively affected consumer and business confidence. But February sales figures proved better than we, as the National Automobile Dealers' Association (NADA), had anticipated.

Unfortunately, consumers have been hit with a double whammy in the past week with the announcement of an upcoming electricity hike of 15.6% in April, and another significant increase in fuel price on Wednesday (3 March 2021). These are expected to have a negative effect on the market going forward. Some new vehicle dealers are also experiencing a tough time with stock shortages on certain models.

READ: NADA ready to 'create the necessary immunity' as SA's auto industry recovers in 2021

The price of fuel in South Africa will increase again this Wednesday (3 March 2021)

Market breakdown

The total South African new-vehicle market for February was 37 521 vehicles which were 13.3% lower than the 43 296 units sold in the same month last year. Dealers performed well in the retail space with an 84.3% share of the total market, with rental taking 10%, government 3.4% and sales to corporate fleets 2.3%.

Exports held up reasonably well, with 29 582 units shipped, which was only 8% below the figure for February 2020, just before Covid-19 hit.

Regarding 'normal'  business operations, the vaccination process will go a long way in seeing that become a reality. It is encouraging to see the coronavirus vaccine availability and inoculation rate moving up. Still, there is a long road to travel before we can reach the required herd immunity, which should bring back some normality to the way we do business.

Mark Dommisse is the chairperson of the National Automobile Dealers' Association.

Mark Dommisse
Mark Dommisse
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