Slight improvement

For the first time in four years total vehicle sales in South Africa for the year have gone up with 2017 showing a 1,8% percent improvement over 2016.

The new vehicle industry ended 2017 on a positive note, according to the annual sales data from the National Association of Automobile Manufacturers of South Africa (Naamsa).  Despite December 2017’s year-on-year sales declining 2,4%, the year-to-date new car sales for 2017 still grew 1,8%. In total, 557 586 new vehicles were sold in South Africa during 2017.

“The new vehicle market’s positive performance for the last year was almost exactly in line with our forecast of 1.74% growth,” says Rudolf Mahoney, Head of Brand and Communications, WesBank. “This can be attributed to the Rand being resilient in the face of volatility and the South African economy performing better than anticipated. However, the economy is still underperforming and faces a long road to recovery.”

In the second half of 2017, OEMs were able to stave off price increases as the Rand firmed against foreign currencies. This allowed manufacturers to pass value back to consumers through very attractive marketing incentives when purchasing new vehicles.

WesBank’s data for 2017 also reflected the continued shift back to the new vehicle market, especially when measuring demand through the number of vehicle finance applications received. Demand for new vehicles rose 6,4% in December, while demand for used vehicles slowed 0,2%. Overall, demand for new vehicles grew 3% in 2017, while demand for used vehicles declined 1,5%.

Since the introduction of the Polo and Polo Vivo in 2010, Volkswagen Group South Africa (VWSA) has been passenger market leader every year. The Volkswagen Group ended the year with 80 308  sales giving VWSA a total market share of 21,8%, with the Volkswagen brand achieving 18,9% share in a run out year of its volume models.

“The Polo Vivo and Polo remained the first and second best-selling passenger cars in 2017, which is also for the seventh consecutive year – this is an incredible achievement for the Volkswagen brand considering that we effectively ran out of supply in December of the key models which is illustrated by the unusually low 14,8% market share we achieved in December,” says VWSA Chairman and Managing Director Thomas Schaefer.

“I am delighted by the performance of both the Volkswagen and Audi brands in 2017 and know that we will do even better in 2018”,

Volkswagen will be launching the new Polo later this month which will be followed by the Polo Vivo still in this quarter.

According to Naamsa, export sales recorded a decline in December, 2017 and at 17 374 units reflected a fall of 1 333 vehicles or 7,1% compared to the 18 707 vehicles exported during December, 2016.  This was largely attributable to the effect of model run out and new model introduction of the new VW Polo range in 2018.

Annual aggregate annual industry sales by sector, since 2014, were as follows –

 

Sector

 

2014 2015 2016 2017 2017 / 2016

% Change

Cars 438 938 412 478 361 264 368 068 +1.9%
Light Commercials 173 492 174 701 159 283 163 346 +2.6%
Medium Commercials 10 780 10 394 8 315 7 785 -6.4%
Heavy Trucks,  Buses 20 534 20 075 18 685 18 387 -1.6%
Total Vehicles 643 744 617 648 547 547 557 586 1.8%

Source:  Lightstone Auto, NAAMSA

Whilst the modest improvement was welcome, the figures should be seen in the context of industry sales 11 years ago when the domestic market recorded an all-time high sales number of 714 314 units of which the new car market had represented 481 558 vehicles.

2017 Vehicle exports represented the third highest annual Industry export figure on record and total vehicle exports at 329 053 units were down on the 344 820 vehicles exported in 2016 – a decline of 15 767 units or a fall of 4,6%.

2017 Industry export sales data, compared to previous years, were as follows –

  2015 2016 2017 2017 / 2016

% Change

Cars 229 723 238 547 221 928 -7.0%
Light Commercials 103 000 105 219 106 126 +0.9%
Trucks & Buses 1 124 1 054 999 -5.2%
Total Exports 333 847 344 820 329 053 -4.6%

Source:  Lightstone Auto, NAAMSA

South African financial markets have reacted positively to the outcome of the December, 2017 ANC elective conference.  However, economic and fiscal policy uncertainty, political challenges, the risk of further credit rating downgrades and increasing geo-political tensions make forecasting difficult.

On the positive side, several recent economic indicators support the view the South African economy is performing better than anticipated despite low levels of business and consumer confidence.  Barring a further credit rating downgrade, an improvement in economic growth from about 1,0% in 2017 to around 1,9% in 2018 remains possible and this would lend support to new vehicle sales in the domestic market.

The substantial improvement in the Reserve Bank’s leading indicator of economic activity heralds improved economic prospects. Also on an encouraging note, the positive global economic environment – with International Monetary Fund projections of 3,7% global expansion – will lend support to industry export sales.

Faster economic growth remains an imperative to address South Africa’s socio-economic challenges and to take pressure off strained public finances and overburdened taxpayers.  In this context, concerted steps are needed by Business, Government and Labour to create a more investor-friendly environment as a means of boosting growth.

NAAMSA anticipates further modest improvement in domestic new vehicle sales during 2018 as well as further growth in vehicle exports and industry production numbers.

The outlook for 2018 in terms of Industry domestic vehicle sales by sector

 

Sector

 

2015 2016 2017 2018 Projected
Cars 412 478 361 264 368 068 375 000
Light Commercials 174 701 159 283 163 346 170 000
Medium Commercials 10 394 8 315 7 785 8 000
Heavy, Extra Heavy, Commercials, Buses 20 075 18 685 18 387 19 000
Total Vehicles 617 648 547 547 557 586 572 000

 

 

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Better with time

Audi A5 2.0T FSI Sport STronic

Latin and I never really gelled at school. I thought it was a pretty useless language and, to borrow a line from a film whose name I have long since forgotten, “I couldn’t speak to a dead Roman even if I wanted to…”

Apart from Amo, Amas, Amat and Veni, Vidi, Vici, there is little from those endlessly boring school classes that remains – yet, oddly enough, both memory fragments are particularly valid in this impression of the Audi A5.

Certainly, in the South African market, Audi still does not quite have the bonnet badge cred of its German counterparts but in so many ways, it epitomises the second of those Latin words, having come, seen and conquered.

The evolution of the Audi range of sedans, hatches and SUV’s has been a carefully planned staging to respond to buyer preferences and changing trends without appearing to be chasing the market in what its major rivals were up to.

Out of this came the original A5 – a car that, in 2007, stood the B-segment on its head with a left-of-field design.

Ten years later, comes the second generation – now with a new, honed look that is athletic, sporty and elegant, while its design goes hand-in-hand with sophisticated aerodynamics. Under the skin, the Audi A5 impresses with an all-new chassis, innovative infotainment features and driver assistance systems.

The new Audi A5 Coupé sports a fresh and modern look. It is nevertheless true to its DNA with the sporty – the wave-shaped shoulder line that characterised the previous model now given a 3D look.

The proportions remain balanced with the long engine hood, stretched wheelbase and short overhangs hinting at the sportiness of the A5 Coupé. The sculpted single frame grille is significantly flatter and wider than in the previous model.

The four-cylinder 2.0T FSI engine produces 140 kW and 320 Nm of torque, accelerating from 0 to 100 km/h in 7.7 seconds. This engine has a claimed combined fuel consumption of 5,1 l/100 km, while being exempt from CO2 tax with an emissions figure of 117 g/km.

Real world testing moved that claimed figure to around 6,6 l/100 km/h and that was only through exercising some restraint – I can think of no earthly reason actually to want to drive this car anything less than vigorously.

The all-new chassis offers comfort combined with a high degree of agility. The A5 thus handles narrow, winding mountain roads and long trips with equal aplomb – helped considerably the slick seven-speed STronic gearbox.

Left to its own devices, it starts to grow an intuitive feel for driver habits and responds swiftly to those inputs to the throttle and brakes. For those who want to, manual control is there for the taking.

I, however, found the response time quick enough not to need the manual option for most levels of driving – even doing the adrenalin injection thing through some superlative twisties.

The electromechanical power steering is also a new development from Audi. It adapts according to the vehicle’s current speed and provides highly precise road feedback. Optionally available is the dynamic steering, which varies its gear ratio depending on the speed and steering angle.

On the new car, engineers were able to trim the curb weight by as much as 60 kilograms and the body is the lightest in the competitive field. With a drag coefficient of 0,25, the A5 Coupé is also the segment leader with respect to aerodynamics.

The increased dimensions and longer wheelbase mean more space for driver and passengers, while the luggage compartment offers a volume of 465 litres, 10 litres more than with the previous model. The rear seat has a 40:20:40 split and can be easily folded forward using levers in the luggage compartment. Audi also offers the two-door coupé with optional gesture control for opening the luggage compartment lid via a foot motion. The optional trailer hitch is electrically released at the press of a button.

Our test car was fitted with the optional Audi virtual cockpit, a 12,3-inch TFT display with a resolution of 1,440 x 540 pixels. Together with the MMI navigation plus including 8,3-inch monitor on the centre console, it forms the central information unit.

The whole MMI control logic is similar to that of a smartphone, including the intelligent free text search function. The new, more natural voice control system can recognize input made using everyday language.

Choosing MMI navigation plus automatically gets the hardware module Audi connect, which allows the vehicle to be a Wi-Fi hotspot for up to 8 devices, while also accessing Google Earth Navigation and Google Street View.

Standard on the 2.0T FSI 140 kW are items such 17 inch alloy wheels, space-saving spare wheel, Leather steering wheel in 3-spoke design with multifunction plus, Audi drive select, ISOFIX child seat mounting anchorage point for outer rear seats, full size air bags with front passenger air bag deactivation, side air bags at front and head air bag system, Xenon plus headlights and LED rear lights, cruise control, headlight washers, Automatic air-conditioning, driver information system with colour display, Audi sound system and leather/artificial leather combination.

A suitably comprehensive package and the price of our unit as tested came to R795 470.