The South African car sales declined by 65, 4 in May 2020 due to the impact of the COVID-19 pandemic as consumer and business sentiment remain severely depressed.
The National Association of Automobile Manufacturers of South Africa (NAAMSA) said new vehicle sales for May 2020 reflects a substantial decline of 27 496 units or 68,0% from the 40 428 vehicles sold in May last year compared to the aggregate domestic sales of 12 932 units in May 2020.
Domestic sales of new light commercial vehicles, bakkies and mini-buses at 3 073 units during May 2020 had recorded a huge decline of 9 128 units or a fall of 74,8% from the 12 201 light commercial vehicles sold during the corresponding month last year, said NAAMSA.
NAAMSA added that the motor industry is currently experiencing unchartered conditions given the current unpredictability in these uncertain times.
New vehicle sales are generally linked to the strength of the economy and the anticipated extent of the negative annualised GDP growth in the country, therefore, does not bode well for the industry over the medium term.
Under normal market circumstances, positive indicators such as sharp petrol price decreases, substantial interest rate drops, below-inflation vehicle price increases, dealer incentives and low inflation would support the new vehicle market.
“However, how far these dynamics will move consumers and businesses into new vehicle purchases over the balance of the year remains unclear,” said NAAMSA.
“Suffice to say, the impact of COVID-19 on the new vehicle market and when the level of factory output will return to where it was before the lockdown will only become clearer once the entire motor industry becomes fully operational and prepares itself for the “new normal”.