Gauteng Business News

Send  Share  RSS  Twitter  04 Aug 2010

MOTORING: July Sales for the Motor Industry Fail to Flatter


Recent Gauteng Business News

Highest monthly dealer passenger sales recorded in 27 months but motor industry not out of the woods yet

• Daily sales levels down on June
• New model and promotional activity add interest to stimulate passenger market
• Emissions tax set to impact on sales
• Introduction of all new Spark captures buyer interest
• Corsa Utility continues to lead compact pick-up segment

Total motor industry sales of 41 367 units for July show only a marginal increase over June suggesting a leveling off of demand within an industry that cannot yet claim to be home free from the constraints of the economic downturn.

“July should perhaps be best viewed as a month of two distinct phases,” says Malcolm Gauld, General Motors South Africa’s Vice President Sales and Marketing. “The first half of the month saw a focus on a return to normality as we emerged from the experience of the World Cup and an extended mid-year school break. The second half of the month saw more intense trading conditions together with a high level of new model activity in the motor industry as normal business was resumed.

“Given the mixed trading conditions experienced during July sales held up well at first glance, with a marginal increase over the previous month. One of the more consistent and reliable measures of market performance is however the average daily sales rate experienced by dealers. With this measure applied any growth seen in July was down to a higher number of selling days in the month compared to June (22 vs 21) rather than any defined increase in buyer activity. The daily dealer sales rate for July was 1 368 units versus 1 446 for the previous month.

“July may have delivered the best Passenger volume month in the past 27 at a dealer level but the feedback from dealers is that this was achieved without any real ‘buzz’ in the marketplace. Rather, aggressive marketing campaigns and renewed new model activity provided a stabilizing effect during the latter part of July. Another boost, contrary to expectations, came from reasonable deliveries into the rental market as some fleets were either rotated or adjusted for content post World Cup. If we exclude the launch of two new passenger models in July, then the month was at best very average

“Year to date the motor industry is a welcome 23,3% up on 2009 but there are a number of cautionary flags flying that might inhibit sustained growth over the coming months. For many the lack of any further decrease in the prime rate, with its associated further relief on household debt levels, will have come as a disappointment. High wage demands will likely increase inflationary pressures, particularly with regard to essential service costs. A further negative is the introduction of an emissions tax on new vehicle purchases as of the 1st September that will serve to raise the price of vehicles virtually without exception as of that date.

“This will almost certainly result in an increase in sales activity during August as buyers, particularly in the private sector, act to avoid the emissions tax penalty. This aside, it is likely that the prospect of further sales growth in the industry will be a fragile one, at least through until year end. 2010 will be a growth year for the industry, but perhaps not at the rate evident year to date.”

Within the GMSA passenger car range the Aveo and Spark featured on the top ten sellers list, whilst the introduction of the all new Spark during the last week of the month created renewed brand interest. The Corsa Utility continued its dominance of the compact pick-up sector with increased demand taking sales up to 1 310 units in a light commercial market that was otherwise down 7,2% on June.

The top performer in its segment, the Corsa Utility occupied a firm second place in the overall LCV market with a 12,6% of total LCV sales.


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