2015 started slow for the South African domestic car market.

South African domestic car market

2015 started slow for the South African domestic car market albeit positive expectations generated by a mix of direct and indirect factors, recently evolved all in positive. New vehicles export boomed 20% from year ago.

In January 2015 according to data released by NAAMSA, the Federation of South African Car Manufacturers, total new Light Passengers Vehicles sold in South Africa have been 50.442, down 1.4% from the correspondent period last year, breaking a short series of four Y.o.Y. monthly increases.

Moreover, the January 2015 export sales at 16.708 units reflected a substantial improvement of 2.863 vehicles or a gain of 20.7% compared to the 13.845 vehicles exported in January last year.

The new car passengers market had experienced some pressure in January 2015 and at 36 982 units reflected a decline of 1 392 units or a fall of 3.6% compared to the 38 374 new cars sold in January last year. The car rental Industry had again made a strong contribution and had accounted for 15.3% of new car sales in January, 2015.

New light commercial vehicles sales at 13.460 units reflected a gain of 756 units or an improvement of 6.0% compared to the 12.704 sales during the corresponding month last year.

NAAMSA opinion about the 2015 market is positive: “Near term prospects for the new vehicle market had improved on the back of a number of recent positive developments.

The latest SA Reserve Bank leading indicator had increased significantly to its highest level in nine months. Given the close correlation between new car sales and the leading indicator, this development augured well for vehicle sales in the short to medium term.

Furthermore, the substantial rise in the purchasing managers’ index also suggested an improvement in business activity and manufacturing output in South Africa.

Thirdly, consumer spending was likely to benefit from the substantial decline in fuel prices over the past six months. Importantly, resultant lower inflationary pressures opened the way for stable interest rates well into 2015.

As a result of these factors, the outlook for 2015, in terms of new vehicle sales, had improved over the short to medium term and would be reinforced further by expectations of a higher economic growth rate of around 2.3% for the year. However, the one major negative factor revolved around the security and stability in electricity supply.”

The proposed change by the fiscal authorities to the basis of fringe benefit taxation of company cars was expected to result in pre-emptive buying during the balance of February, 2015 to avoid the higher basis of valuation of company cars, for fringe benefit tax purposes, with effect from 1st march, 2015.

The planned legislative change provided that, instead of basing the taxable value of the private use of a company car on the cost to the employer, the taxable value would instead be based on a higher ‘retail market value’.

NAAMSA anticipated that the tax change would result in a further move to the car allowance alternative and that companies might consider purchasing new company cars in advance of the tax change. There would be no impact on current company cars or on vehicles acquired before 28th February, 2015.

This month, data on model ranking regards just car passengers.

Below, you can sort our interactive tables to see data regarding Brands, Groups and Models. Please bear in mind that sales data are subject to adjustments as sources will update their information. This report is updated at the publishing date and will not be modified while the next on this subject will always have the year to date data updated.

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