Pretoria- Vehicle sales in September 2010 boasted a 16. 6 percent improvement compared to September 2009, however was down substantially in September as compared to August this year.
"Aggregate industry sales at 41 875 units had registered an improvement of 5 960 vehicles or 16, 6 percent compared to the 35 915 vehicles sold during the corresponding month in 2009," said National Association of Automobile Manufacturers of South Africa (NAAMSA) on Monday.
However the year-on-year monthly growth figure of 16, 6 percent was down substantially on the year-on-year improvement of 36, 9 percent registered in August 2010.
Out of the total NAAMSA reported industry sales of 35 097 vehicles, 79.1 percent (27 746 units) represented dealer/ retail sales while 13.9 percent represented sales to the car rental industry. Industry corporate fleet sales represented 3.7 percent of sales and 3.3 percent represented sales to government.
Strike action in the sector led to the decline in the export sector due to the loss of production showing a decline in volume by 10.3 percent compared to the same month last year. "Aggregate export sales, as a result of the loss of production due to the widespread industrial action in the automotive sector, had declined in volume terms by 10,3 percent compared to the corresponding month last year and reflected a massive fall of 36,0 percent on the previous month of August 2010," said the association.
The fall was attributable to the industry's assembly plants in the second half of August and compounded by the strike in the automotive component industry in September.
According to the association, the effect of the strike had compromised the industry's already fragile track record as a reliable supplier of automotive products, vehicles and components to international markets.
"The resumption of production in the component and vehicle manufacturing sectors should enable manufacturers to boost output for export markets over the balance of the year."
In September, industry new car sales received support due to the continued strong demand from the car rental industry. New car sales at 29 993 units reflected an improvement of 26 percent compared to the 23 802 new cars sold by industry in September, 2009.
"However, total industry September new car sales reflected a decline of 10, 5 percent on the previous month of August, 2010 during which 33 525 new cars had been sold. During September, the market had been impacted by growing stock shortages as a result of the industrial action experienced."
At the same time, new car sales received support from the availability of dealer inventory which did not yet attract the carbon emissions tax which was set to raise new car prices by an average of 2.5 percent. NAAMSA expects the full impact of the environmental tax to reflect in the October and particularly November 2010 new car sales figures.
The sales of industry new light commercial vehicles, bakkies and minibuses at 9 9916 units in September, reflected a fall of 5.8 percent when compared to the 10 524 units sold during the corresponding time last year. Sales of new light commercial vehicles also fell by 8.1 percent compared to August 2010 principally said NAAMSA, to the strike action.
Vehicles in the medium and heavy truck segment registered gains at 618 and 1 348 units respectively. This was an increase of 13.4 percent in the case of medium commercials and 29.1 percent for heavy trucks and buses when compared to the corresponding month last year. "The figures suggested renewed fixed investment momentum on the part of the private and public sectors."
The Reserve Bank's six percent reduction in interest rates since the end of December 2008 as well as new vehicle prices and further improvement in loan finance approval rates and pent up replacement demand - should continue to support the new vehicle sales.
"However, the growth in new car sales was expected to moderate further during the months ahead as the market adjusted to the inflationary effects of the new car emissions tax regime. Certain domestic economic performance indicators such as the Purchasing Managers Index and the Reserve Bank's leading indicator of economic activity also suggested that domestic economic conditions would remain challenging," said NAAMSA.
"New vehicle sales over the medium term would remain a function of the performance of the domestic economy and, in the case of export sales, the sustainability of the recovery in the global economy," explained NAAMSA.
Standard Bank's economic unit said that there was a buy-ahead streak in August sales ahead of the implementation of the CO2 vehicle emissions tax on 1 September in order to avoid the tax.
"Still, and despite the headwinds facing the market, September managed to record the second highest selling rate per day of new passenger cars in 2010, increasing by 16.8 percent year on year during the month. The strong improvement in passenger car sales volumes provides solace to concerns over the strength of domestic demand, particularly of households," it said.
