New vehicle sales moving in reverse gear

Total vehicle sales for 2020 amounted to 7606, the lowest annual sales figure since 2004.This represents an annual growth of -26.7%.

20 January 2021 | Business

PHILLEPUS UUSIKU

Vehicle sales contracted by 2.0% year-on-year in December 2020, compared to a contraction of 2.2% year-on-year in December 2019, with 714 units sold in December 2019.

According to Cirrus Capital (CC), total sales for 2020 amounted to 7 606 units, a growth rate of -26.7% which is comparable to losing three full months of 2019 sales.

A total of 4 402 commercial vehicles were sold in 2020, 1 447 fewer than in 2019. December new passenger vehicle sales increased over the year with growth of 5.1%. Naturally, annual passenger vehicle sales decreased compared to 2019. In 2020, there were 1 324 fewer passenger vehicles sold than in 2019, CC said.

As a result of the depressing 2020 vehicle sales, both commercial and passenger vehicle sales continue their downward trends that were established in 2016, for commercial vehicles, and 2015, for passenger vehicles.

A total of 370 new commercial vehicles were sold in December, a 7.5% decrease year-on-year. Annual sales for the year amounted to 4 402 units, significantly fewer than the 5 849 units sold in 2019.

Light commercial vehicle (LCV) sales saw decreases both on a monthly and annual basis, with growth of -1.9% and -6.0%, respectively. This amounted to 315 LCVs sold in December and 3 869 vehicles sold over the year, CC pointed out.

Thirteen medium commercial vehicles were sold in December, with annuals sales amounting to 172 units 73 fewer than in 2019. Finally, nine heavy commercial vehicles, 32 extra heavy vehicles and 1 bus were sold in December.

Recovery

Vehicle sales are expected to rebound in 2021, largely due to base effects as business operations normalise, and due to the release of pent-up demand from 2020.

Moreover, given the population census this year, it is expected that government will play a bigger role in vehicle purchases this year. This should see commercial vehicles rebound.

Despite the expected artificial spur for commercial vehicles, expectations for passenger vehicles are to rebound at a lower rate. This is because many households remain at risk of retrenchments, are constrained by high debt levels, and face greater difficulty accessing finance given the riskier macro environment with historically low interest rates, CC said. - [email protected]

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