There was no let-up in the decline in new vehicle sales in South Africa in September, with sales reported through the National Association of Automobile Manufactures of South Africa (Naamsa) down 18.1 percent from a year ago.

This follows a 30.3 percent fall in August and a 19.7 percent decline in July.

Aggregate new vehicle sales for September at 40 955 units registered a decline of 9041 units or 18.1 percent compared to the 49 996 vehicles sold during the corresponding month last year.

However, Naamsa pointed out that the September 2008 sales performance should be evaluated in relation to the fact that September sales last year had represented a relatively low base since sales during September 2007 had been negatively affected by a strike in the automotive component sector which had impacted on production and sales.

Aggregate Naamsa sales for the first nine months of 2008 were 17.6 percent lower than the sales recorded during the corresponding nine months in 2007.

6.4% sales to government

Overall, out of the total Naamsa reported industry sales of 40 955 vehicles, 78.5 percent or 32 152 units represented dealer/retail sales, 10.5 percent represented sales to the car rental industry, 6.4 percent sales to government and 4.6 percent into industry's corporate fleets.

September 2008 Naamsa reported new car sales at 25 349 units reflected a decline of 6908 or 21.4 percent compared to the 32 257 new cars sold during September 2007.

"Interestingly, new car sales in September had been up 0.2 percent on the new car market recorded in August, 2008. Factoring in the new car sales not reported in detail, the year on year decline had amounted to 8376 units or a fall of 22.8 percent. On a positive note, the daily sales rate during September, 2008 had shown a modest improvement," Naamsa commented.

Sales of Naamsa new light commercial vehicles, bakkies and minibuses at 12 644 units during September 2008 reflected a decline of 2086 units or 14.2 percent compared to the 14 730 unit sales during the corresponding month last year. Taking account of the light commercial vehicles sales reported by the AMH Group, the year on year decline amounted to 2497 units or 15.6 percent.

Sales of vehicles in the medium and heavy truck segments of the industry continued to reflect a mixed picture during September 2008 and at 901 units and 2061 units, respectively, recorded a decline of 273 units or 23.2 percent, in the case of medium commercials, versus a respectable gain of 226 units or 12.3 percent, in the case of heavy trucks and buses – compared to the corresponding month last year.

Exports maintained upward momentum

During September 2008 the industry's new vehicle exports maintained their strong upward momentum. 27 547 new vehicles had been exported. This represented an improvement of 18 867 vehicles or 217.4 percent compared to the 8680 vehicles exported during September last year. However, September 2007 export sales had been severely depressed as a result of the impact on industry vehicle production due to the strike in the automotive component supplier industry during that month.

With three quarters of 2008 accounted for, export sales reflected an impressive year on year improvement of 72.7 percent. Vehicle exports for 2008 as a whole were projected to reach about 280 000 units.

Naamsa said that during the last quarter of 2008, domestic new vehicle sales are likely to remain under pressure as a result of the cumulative impact of past interest rate rises, inflationary pressures, a decline in the real purchasing power of consumers and lower economic activity levels.

Despite deteriorating consumer and business sentiment, the South African economy - principally as a result of current and projected major investment projects - remained in a relatively good position to withstand the current global slowdown and the extreme financial market volatility, Naamsa added.

Existing vehicle export contracts would continue to lend support to domestic vehicle and component manufacturing activities, however, the expected international economic slow-down and the substantial recent decline in new vehicle sales in various major global markets could impact on the industry's export sales in 2009.

From a domestic sales forward looking perspective, there were indications that the inflation and interest rate cycles were close to a peak. Inflationary pressures were likely to abate during 2009 with interest rates following suit. The second half of 2009 was likely to see an improvement in the financial position of consumers and stronger economic activity levels giving rise to optimism of a recovery in demand of new motor vehicles from about the middle of next year, Naamsa added.

I-Net Bridge