Lights at the end of the tunnel

Lights at the end of the tunnel

The number of holidays in April created the impression that there had been high vehicle sales during May. But, the harsh reality is that May 2014’s sales were 9,2 percent below the total industry sales achieved in May last year.

“The market is showing severe signs of pressure,” says Ford Motor Company of Southern Africa’s vice president: marketing, sales and service, Mark Kaufman. “Industry sales were significantly depressed, so little solace should be taken from May’s apparent increase over April.”

He adds that current consumer confidence is only marginally higher than the low levels experienced during the 2008/9 global recession. But it isn’t all doom and gloom, as some light commercial vehicles (LCVs) are shining some light at the end of the tunnel.

Ford sold more than 2 000 units of its locally manufactured Ranger for the second time this year. Its domestic success (2 018 sales) was mirrored by Ford’s export numbers, with 4 089 Rangers delivered outside South Africa’s borders.

“Our Silverton Assembly Plant is running efficiently and maximising production across two shifts,” says Kaufman. “There is boosted confidence in the product, aided by a resurgence of the European market.”

For Toyota, the Hilux remains its strongest performer with a total of 2 637 bakkies being delivered during May. This model is also Toyota’s strongest export product, with 2 426 units exported to Africa and Europe.

And, at General Motors South Africa (GMSA), both the locally assembled Chevrolet Utility and Isuzu KB continue to show a strong presence in the local LCV market. In May 2014, the sixth-generation Isuzu KB had the best sales month of the year and was the best selling GMSA vehicle, with 1 482 units retailed, followed closely by the Chevrolet Utility – with sales of 1 353 units.

But the fact remains that the local automotive industry is, unfortunately, showing signs of weakness during these increasingly challenging economic times.

“New vehicle sales, especially through dealer channels, are slowing down – a situation that can be attributed to subdued economic growth, fluctuating fuel prices and the imminent threat of a hike in interest rates,” says Calvyn Hamman, senior vice president of sales and marketing at Toyota South Africa. “There has been a reduction in disposable income and this is leading to consumers being more careful to commit to more debt.”

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