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Standard Bank Group
The SA Daily 03 May 2018

Vehicle sales driving up

  • Naamsa vehicle sales for April overshot expectations of 2.0% y/y, at 3.6% y/y, from 1.1% y/y in March. Passenger vehicle sales, which comprises roughly 65% of total new sales, continue to trend upwards (as it has for the past 20 months), coming in at 6.4% y/y in April, from 3.7% y/y in March.
  • Notwithstanding, this 20-month long upturn in passenger vehicle sales has been relatively shallow. This could be ascribed to a dire lack of consumer confidence in the last quarter, underpinned by depressed household disposable income growth and low GDP growth at the time. However, volumes are now expected to gain some momentum.
  • We believe that vehicle sales will increase steadily in 2018 due to the recovery in consumer confidence and moderating inflation. This, coupled with lower interest rates and a more anchored rand, underpins our expectation for steady household expenditure (see Q1:18 passenger vehicle sales by Siphamandla Mkhwanazi published on 18 April 2018).

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