Weak currency not all gloom

South Africa's slyest looter of the treasury president
with pouting staff at Toyota's plan near Durban.

AFTER a good start to the year, with sales of both private and commercial vehicles on the rise, that midnight Zuma shuffle has crashed all plans in the auto trade.
Ahead lies a weaker rand, which means all the imported cars will cost even more, driving sales lower again. While this is bad news for new car sellers, the used car dealers can expect more sales as people seek affordable transport, or a taxi.
Already, domestic sales of industry new light commercial vehicles, which includes mini-buses, saw a
gain of 1,1% in March, according to the latest data from the National Association of Automobile Manufacturers of South Africa (Naamsa).
A weaker rand will also lead to more car pooling, because a litre of fuel will cost even more and when the crude oil price rise in tandem with increased demand during winter in the northern hemisphere from June, we are going to feel the pain down south, paying well over a rand a kilometre to drive. And with increased fuel prices comes increased everything else, as Transnet’s dysfunction still means everything we buy gets transported in trucks.

Sliver of silver

There are some silver linings though. Anyone who bought a new car in the last year will see its value holding steadily, if not actually increasing.
A weaker rand will also be a boon for tourism, despite the damage done to the industry by the Zupta’s new finance lackey Malusi Gigaba, who dented tourism numbers with his irrational demand for unabridged birth certificates while he was minister of home affairs. And of course South Africa’s mines will be making handstands all the way to the bank and back, because they sell in dollars per ounce and then convert to rand-based revenue.
Wealthy mines means truck agencies can look forward to more orders for locally assembled trucks. Among the extra heavy commercial vehicles, the Volvo Group, which includes UD trucks, leads with 279 local and exported sales reported last month, with the Volvo FH leading sales with a 117 units sold. (UD’s success was in part due to the efforts of two KZN dealers, more on them on page 3.)
Scania is currently SA’s second best-selling truck brand, with 189 units sold locally and eight exported.
Among the private cars, the Polo Vivo remains the top selling passenger vehicle, with 2 383 units sold in March. The Polo is not SA’s best-selling vehicle overall, however, as that title is still held by the Hilux, of which Toyota dealers sold 3 447 units locally while the Prospecton plant export 3 463 Hilux units during March.
Toyota will also see a silver lining in a weaker rand, which helps to make each exported Hilux that much more profitable.