• South Africa is still on the road to recovery because of Covid-19 and the subsequent lockdown.
• Vehicle sales in March 2021 were encouraging after consumers were careful in January and February.
• NADA believes the country may experience a shortage of new vehicles.
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Stronger retail sales in the South African vehicle market in March are most encouraging, and this year may be better than expected for the local motor industry. The delayed replacement cycle is starting to catch up, helped by interest rates remaining low. The used vehicle market is also strong, which is good for all sectors of the industry's overall health.
Two months after a semi-hard lockdown, consumer confidence is improving. This after potential buyers were wary in January and cautious in February. Now that the second wave has passed and the country's economy is stabilising, people are looking to buy new vehicles again.
Boosting the sectors
The rate at which the commercial vehicle market is growing is also good news. This signifies improvements in the general economy with the promise of an increasing number of infrastructure projects. This project pipeline will undoubtedly boost the all-important commercial sector of the market. We cannot accurately compare sales in March 2021 with those in the same month last year. In March 2020, sales were heavily impacted by trepidation about impending restrictions and the Level 5 hard lockdown, which was announced on March 26.
Looking ahead, we at the National Automobile Dealers' Association believe there will continue to be a shortage of certain new models, with an ongoing global shortage of semi-conductors, or computer chips. Hefty increases in fuel prices coming in April will be another factor on vehicle sales going forward, as this puts more strain on household budgets.
Much will depend on the effect of the Covid-19 pandemic, which is still negatively impacting many of the countries that supply built-up vehicles and components to South Africa.
Mark Dommisse, Chairperson of the National Automobile Dealers' Association (NADA).