Car sales continue on a downward trend

Tuesday, August 4, 2009

Pretoria - Vehicle sales for the month of July continued to plummet registering a 27.4 percent decline compared to the same period last year.

In its monthly release of the country's vehicle sales, the National Association of Automobile Manufacturers of South Africa (NAAMSA) said the figures for July reflected a decline of 11 606 vehicles or 27.4 percent compared to the 42 337 units sold during the corresponding month last year. 

According to NAAMSA, sales in July this year came in at 30 731 units. "Of the total cars sold 76.2 percent of the vehicles represented dealer/retailer sales, 14.7 percent were sales to the car rental industry, 5.1 percent went to government while only 4 percent of the vehicles went into auto industry corporate fleets," said the association in a statement on Tuesday.

Domestic new car and commercial vehicle sales had remained disappointingly weak registering further sharp declines compared to the corresponding month in 2008.

"In July 2009, new car sales came in at 18 818 showing a decline of 7 181 units or 27.6 percent compared to the 25 999 new cars sold in the same period last year," NAAMSA said.

New light commercial vehicles, bakkies and minibuses came in at 10 179 units during July 2009 showing a decline of 2 952 vehicles or 22.5 percent compared to the 13 131 units of July 2008.

NAAMSA noted that the trading environment last month remained weak with all sectors of the country's automotive industry continuing to experience severe sustainability challenges.

"Improvement in the automotive industry's domestic operating environment would depend on a revival in consumer spending on the back of lower interest rates as well as on stimulatory government expenditure. 

"Improvement in vehicle exports would depend on a recovery in global economic conditions and a return of confidence in international financial markets," said NAAMSA.

NAAMSA said that though there were tentative signs that the slump in economic activity was bottoming out, there was still concerns about a second half domestic economic recovery.

"Most current economic indicators reflect an economy under pressure and firmly in recession with declines in wholesale and retail spending, industrial production and construction activity," the association said.

It added that the employment picture was looking bleak while also saying that a further relaxation in the monetary policy appeared to be justified.