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South Africa’s new car sales in April dented by spate...

Business Maverick

BUSINESS MAVERICK

South Africa’s new car sales in April dented by spate of public holidays

A worker carries out a quality-control inspection inside the boot area of a VW Polo on the production line at the Volkswagen plant in Uitenhage. (Photo: Waldo Swiegers / Bloomberg via Getty Images)

New car sales in South Africa fell by 17.6% in April compared with March, the Automotive Business Council said on Monday. Compared with April of last year, they soared over 6,000%, but that is not a useful comparison.

In April, 35,779 new vehicles were sold in South Africa, compared with 43,428 in March, the Automotive Business Council said in a statement. That was a decline of 17.6%. Vehicle exports fell more sharply by 32.2% compared with March to 26,522 units.

The council said this was largely attributable to April’s spate of public holidays – three in total. The four-day Easter long weekend probably also meant few people were visiting dealerships on that Saturday. South Africa’s relative fondness for public holidays does have economic consequences, both good (for the tourism and Easter egg sectors in this case) and bad (for things like car sales and overall productivity).

“Renewed activity in the rental market, interest rates remaining at their low levels, the easing of the lockdown restrictions, as well as all five subcomponents of the Absa Purchasing Managers’ Index (PMI) being in positive terrain for the first time since early 2012, will support business and consumer sentiment and subsequently the new vehicle market in 2021,” the council said. But it noted that it expected the recovery to prepandemic sales volumes to take at least three years.

And you might not find the car of your dreams because of lingering supply chain issues. 

“Covid-19-induced manufacturing supply chain disruptions, such as the current global shortage of semiconductors, or computer chips, an important part of modern vehicles, could impact on availability of specific models during the year,” the council said.

Of course, compared with the hard lockdown month of April of last year, when only 574 new vehicles were sold – presumably to the public sector – the April 2021 data look off the charts, reflecting an increase of more than 6,000%. But all economic indicators look good when juxtaposed to April of 2020. Hopefully, South Africa’s economy will never again sink to that low. DM/BM

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