South African new vehicle sales fell by 2.8 percent, or 1204 units, year-on-year in April to 43 536 units, a small decline compared with March's year-on-year slump of 17.5 percent, mew data showed on Tuesday.

But the National Association of Automobile Manufactures of SA (Naamsa) said the trend was still a sign of a sagging market.

"Despite the fact that April last year represented a very low base – on account of the Easter holidays which fell during April, 2007 and the new eNatis vehicle registration delays which depressed sales during that month," Naamsa said.

Overall, out of the total Naamsa reported industry sales of 42 359 vehicles, 90.3 percent represented dealer/retail sales, 5.7 percent sales into Naamsa member company fleets, 2.6 percent sales to government and 1.5 percent represented sales to the car rental industry.

Sales reflected further weakness

"Domestic new car and light commercial vehicle sales had reflected further weakness during April, 2008, whilst aggregate industry sales had received support from above-average sales of medium and heavy commercial vehicles," Naamsa said.

Naamsa reported new car sales at 24 094 units reflected a decline of 1819 units or 7.0 percent compared with the 25 913 new cars sold during April 2007.

"Demand in the new car market had weakened substantially in recent months as a result of the cumulative effect of interest rate increases, pressure on disposable income due to rising energy, food and fuel costs and negative consumer sentiment and business confidence," the body said.

Sales of Naamsa reported new light commercial vehicles, bakkies and minibuses at 14 852 units during April 2008 reflected a decline of 116 units or 0.8 percent compared with the 14 968 unit sales during the corresponding month last year.

Trucks maintained upward momentum

Supported by strong investment sentiment and infrastructural spending, sales of vehicles in the medium and heavy truck segments of the industry maintained their upward momentum; and the April 2008 sales at 1307 units and 2120 units respectively recorded an improvement of 198 units or 17.9 percent in the case of medium commercials, and 547 units or 34.8 percent in the case of heavy trucks and buses, compared with the corresponding month last year.

Looking ahead, Naamsa said the new domestic car and light commercial vehicle sectors were expected to remain under pressure as a result of tight monetary conditions, rising inflationary pressures, high levels of household debt and a further modest slowdown in economic activity.

The medium and heavy truck segments however should continue to perform relatively well, registering positive growth during 2008.

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