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APRIL - JUNE 2006  |  
SALES CONTINUE AS TRADE DEFICIT HITS
| PASSENGER CARS | HEAVY TRUCKS |
LIGHT COMMERCIAL VEHICLES | MEDIUM TRUCKS |

Vehicle sales in South Africa for the first half of 2006 totalled a record 310 280 units - 17,8 per cent up on the performance a year ago. Sales added from the non-reporters - mainly Imperial's Associated Motor Holdings - boosted the half-yearly sales to 342 604 units, which was an improvement of 16 per cent on sales of 287 914 units in the first half of 2005.

These results emphasise the non-reporters' growing share in the overall market as they have improved from 8,5 per cent to 9,4 per cent in the past year and in the first six months of 2006 accounted for 32 324 sales. This places them at fourth overall behind Toyota, Volkswagen and General Motors SA in the share stakes.

However, casting a cloud over the strong local sales and reports of substantial growth in exports, is the sharp growth in the country's trade deficit. Fingers are being pointed at the motor industry, which is a major user of foreign exchange and is being singled out for criticism as the government is conducting its mid-term review of the Motor Industry Development Programme. (See Industry On High Alert)

Meanwhile, despite the trade deficit concerns, half year sales for 2006 show the second quarter's figures being boosted by a strong June. The 56 952 sales recorded in the month were the highest yet, and up 13,8 per cent on the corresponding month in 2005.

Furthermore, sales in all segments recorded an improvement compared with the first half of 2005. Year-on-year car sales were 18,8 per cent ahead, while LCV sales were up 14,6 per cent despite a slowdown in the growth. MCV sales were up 18,1 per cent on a year-to-date basis, while the heavy truck and bus segment remained 24 per cent ahead of the corresponding period a year ago. The medium and heavy commercial segments are expected to continue to benefit from strong fixed investment and infrastructural developments - many of them linked to the 2010 World Cup.

The industry's market leaders, Toyota and Volkswagen, both performed well in the first half of the year and improved market penetration compared to a year ago. Toyota showed the biggest improvement, going up 1,4 per cent in market share to 22,5 per cent on sales of 70 581 units, with VW improving by 0,6 per cent to 51 070 units.

A very tight battle is being waged between GMSA (39 834 units sold) and Ford Motor Company for third, with the General's local sergeant holding off the determined Blue Oval by a mere 211 units!

DaimlerChrysler retained its fifth spot, despite shedding 1,7 per cent in share (going down to 9 per cent). Only Renault, Peugeot and Volvo sold fewer cars in the first half of 2006 compared with the same period in 2005.

Interestingly, the only change in the ranking of the top 10 manufacturers and distributors came at the bottom of the table, where relative newcomers Tata jumped from tenth to ninth position, displacing Peugeot from the top ten. Fiat Auto SA (FASA) has moved out of the 'wilderness' into ten spot.

PASSENGER CARS ^ top

The fight for superiority in the high profile passenger car market is extremely close this year. With 48 856 units sold, Volkswagen is only 82 units and 0,1 per cent share ahead of long-time rivals, Toyota. The latter's share increased by 4,2 per cent to 23,4 per cent, while VW improved by a slender 0,5 per cent, despite adding an additional product range in the form of the Spanish-made Seat.

(At this stage last year the gap between VW and Toyota was 6 622 units and 3,8 per cent).

On the launch of Seat, the Spanish brand, which has been struggling in Europe where it has been losing both share and money, is now restructuring to widen the brand's appeal. We'll have to see how well the new range fares in South Africa, where the initial monthly sales target are set at about 300 units. Sales in its June launch month totalled 123 units.

But there was plenty of action further down the list, too, as Ford jumped from fourth to third at the expense of DaimlerChrysler - the biggest loser in the car sales stakes after dropping 2,1 per cent in penetration. BMW moved up from sixth to fifth, ousting another big loser, GMSA, which dropped 1,7 per cent in share. Renault and Nissan retained their relative positions in seventh and eighth places, respectively, while Honda jumped from outside the top ten to ninth. Tata made its first appearance in the passenger car top ten in the final spot.

In terms of the top-selling individual model ranges the extensive Volkswagen Polo hatch and sedan line-up has vaulted over the long-time market leading family of Toyota Corolla/RunX/Verso.

However, Toyota's range of Yaris hatchbacks and sedans has provided the surprise of the segment by leaping straight into third position, despite having only one engine size and no diesel variants.

The newcomer displaced the evergreen VW CitiGolf from third place, whence it slipped to fourth, ahead of its long time rival, the Toyota Tazz, which was recently discontinued. (See Toyota's Tazz Calls It A Day)

The BMW 3-Series has moved up to sixth position, overtaking the Mercedes-Benz C-Class, which was also trumped by the Opel Corsa, pushing the Merc down to eighth. Ford's best-seller, the Fiesta, retained ninth position, while the Indian Tata Indica and Indigo line-up has shot up from "nowhere" to tenth, ousting the VW Golf 5, as well as the Renault Megane/Scenic.

In the SUV segment, Toyota's Fortuner - with sales totalling 1 571 units, has displaced the Nissan X-Trail (1 525 sales) from the top. The new Mercedes-Benz M-Class provided another surprise as it jumped into third place with 1 266 units sold.

Fourth spot went to the Toyota Prado (1 222 sales), ahead of the Land Rover Discovery 3 (1 172) and a tie for sixth between the top-selling 'soft-roader', the Toyota RAV4 and the Jeep Cherokee (1 009 sales each). However, it seems this Jeep model is the big loser in the SUV war, with sales tumbling by 35 per cent on a year-to-date basis.

Interesting, too, is the disappointing showing by the VW Touareg, which sold only 346 units in the first half of 2006, despite massive advertising and marketing efforts, and the addition of a 3,0-litre TDI to its line-up.

On the other side of the coin, the success of the more excessive Range Rover Sport is also worth mentioning. The Sport outsold the Touareg by 53 units in the first half of 2006, despite a much smaller range and the legacy of recent high profile product problems with other models in the Land Rover range, further underlining the intrinsic value of this brand in South Africa.


LIGHT COMMERCIAL VEHICLES ^ top

Moving to light commercial vehicles, GMSA's Opel Corsa Utility has unseated the Toyota Hilux to allow GM to take overall leadership in the market.

Third-placed Ford Motor Company, fourth-placed Nissan and fifth-placed DaimlerChrysler have retained their positions in the LCV segment, though they all lost share in the period under review. Besides GMSA, the only significant gain in share came from Tata, which is now in sixth spot with a 3 per cent share - 1,2 per cent up on a year previously.

As mentioned earlier, the Corsa Utility was the best-selling LCV in the first half of 2006, moving up from fourth spot a year ago. Hilux lost 4,4 per cent in share, but still managed to take runner-up spot, only 193 units ahead of long-time rival Isuzu KB. Ford's Bantam was in fourth place, emphasising the strong demand for half-ton pick-ups as even the Nissan B140 (which has hardly changed in more than 30 years) managed to hang on to a place in the LCV top ten.


MEDIUM COMMERCIAL VEHICLES ^ top

The MCV market (3 501 - 8 500 kg GVM) is another segment where Toyota is under pressure, this time from Indian-sourced Tata. Though Toyota's Dyna remains the best seller, it has lost 4,6 per cent in share, while Tata has performed strongly. At the half-year mark the gap between Toyota and Tata was only 86 units, compared to a difference of 344 units a year previously.

One-time leader of the MCV market, DaimlerChrysler, was another big loser as it shed 3,3 per cent despite now being able to add Mitsubishi Fuso sales to those of its Mercedes-Benz models.


HEAVY TRUCKS ^ top

Toyota Trucks' Hino range continued to hold the lead in the heavy truck market (8 501 - 16 500 kg GVM) from Nissan Diesel and GMSA's Isuzu range. Again all three companies showed a loss in share, thanks to Tata's success with a phenomenal 11,2 per cent growth in penetration. Tata is now placed fourth, ahead of DaimlerChrysler.

Tata's onslaught on the South African commercial vehicle market stretches across all the truck segments now as it is also an increasingly important player in the premium end of the truck market (GVM over 16 500kg), with share jumping 5,5 per cent on the back of a near six-fold increase in sales - 348 sales in the first six months of this year compared to only 62 units sold in the first half of 2005.

In the process the newcomer from India jumped from tenth to fifth position on the ranking list, overtaking established players Scania, Volvo, Toyota (Hino), GMSA (Isuzu) and Iveco. The biggest losers in this top end of the truck market were Volvo (down 5,1 per cent), DCSA (down 3,7 per cent) and Scania (down 1,3 per cent).

The only market that Tata has not yet attacked is that for buses over 8 501 kg. Here the Europeans continue to dominate, with MAN heading sales despite losing 4,5 per cent in share (down to a still-dominant 40 per cent). Scania and DaimlerChrysler are the only other companies to have sold in excess of 100 units year to date in a market that increased by 23 per cent to 553 buses sold in 2006. This market now awaits the arrival of Volkswagen with buses from its Brazilian subsidiary and it will be interesting to see if Tata will also join the fray in this vehicle segment.

Looking ahead to the second half of this year the biggest threat to the industry is that of further interest rate hikes, which could put the brakes on the current rate of growth. Industry commentators believe that the sales momentum will continue in the second half of this year, albeit at a slower rate, bearing in mind that sales levels increased dramatically during the second half of 2005.

 

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