September sales indicative of possible high-note end for SA vehicle sales in 2021 - NADA

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• September 2021 sales were 15.8% higher than the same month last year.

• More than 43 000 new vehicles were sold last month.

• The used-car market has also been showing positive growth signs.

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After analysing the sales figures distributed by Naamsa, the Automotive Business Council, for September 2021, South Africa's retail motor dealers fared better than expected. Overall, the sales figure of 43 130 units in the new vehicle market is a welcome 15.8% higher than the 37 237 units sold in the same month last year. With these sorts of volumes, the industry could expect to end the year at the high-end of analyst forecasts for 2021.

What was heartening to see is that 82.7% of the total new vehicle volume was sold through the retail dealer channel. The 1 506 unit growth month-on-month is encouraging, with the majority increase seen in passenger vehicle sales, which is also a positive sign as the largest volume segment.

The rental industry's healthy contribution of 12.4% bodes well for the future supply of vehicles to the pre-owned market, where stock is currently in short supply. This market segment has only recently seen a resurgence in buying since de-fleeting drastically in 2020 when the global pandemic hit South Africa.

Global microchip shortage

At NADA, we expect used-car values to continue holding at higher-than-expected levels as long as there is a new vehicle stock shortage. Fortunately for dealers, the strong demand for used vehicles has been able to mitigate some losses in new vehicle sales volume, primarily due to the global shortage of microprocessors.

READ: SA car sales | New vehicle sales show impressive resolve, but used car demand is up

The effect of the ongoing microchip shortage resulted in more brands than previously experiencing stock shortages in September. There is stock, but not in the best model mix, which is affecting the dealers' ability to supply models the customers want. However, despite the lack of semi-conductor chips affecting supply, manufacturers have worked extremely hard to supply stock to the market.

The unwelcome news is that this situation is unlikely to improve significantly in the next 12-18 months. It has already cost the global motor industry an estimated US$210 billion, as many manufacturing plants have had to either close or run at low output levels.

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

Mark Dommisse
Mark Dommisse
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