Vehicle sales show improvement in August

Thursday, September 2, 2010

Pretoria - Vehicle sales in August showed improvement in comparison to the same period last year rising at 36.9 percent, the National Association of Automobile Manufacturers of South Africa (NAAMSA) said on Thursday.

"Aggregate industry sales at 46 377 units had registered an improvement of 12 502 vehicles or 36.9 percent compared to the 33 875 vehicles sold during the corresponding month in 2009. New vehicle sales had been in line with expectations with new car sales boosted by pre-emptive buying to avoid the CO2 new car emissions tax - registering strong gains and new light commercial sales registering modest improvements," said NAAMSA.

In August, aggregate export sales registered strong gains while down in volume coming off a very low base figure of the corresponding month in 2009 when exports were severely affected as a result of the global economic meltdown at the time.

Of the total industry sales of 40 245, 80.3 percent represented dealer/retail sales, 13.4 percent represented sales to the car rental industry, 3.3 percent represented sales to government and three percent of the sales represented industry corporate fleet sales.

"Aggregate industry new car sales during August, 2010 were at the higher end of expectations assisted by a substantial buy ahead by consumers to avoid the CO2 new car emissions tax which came into effect yesterday. New cars sales had also been boosted by strong demand from the car rental industry," noted the association.

In the event, August 2010 new car sales at 33 541 units reflected an improvement of 11 128 cars compared to the 22 413 new cars sold by the industry during August, 2009.

"This represented the highest monthly new car market since January, 2008. Moreover, the selling rate of new cars per day remained robust."

New light commercial vehicles, bakkies and minibuses sales at 10 856 reflected an improvement of 878 units or 8.8 percent compared to the 9 978 vehicles sold in August 2009.

Improvement was also seen in the sales of vehicles in the medium and heavy truck segments of the industry at 587 and 1 393 units respectively.

The association added that the effect of the ongoing strike action would undermine and compromise the industry's already fragile track record as a reliable supplier of automotive products, vehicles and components, to international markets.

"Besides the loss of production, turnover and profit - prolonged industrial action could translate into employment losses," it said.

The reduction in interest rates since the end of 2008, continuing improvements in the loan finance approval rates and pent up replacement demand had continued to support the new car market.

"Ongoing uncertainty about the strength and sustainability of the global economy could impact negatively on volume growth over the medium term, particularly in the case of export sales. Other domestic economic performance indicators such as the Purchasing Managers Index and private sector credit extension suggested that domestic economic conditions going forward would remain challenging."

In the coming months following the introduction of the CO2 new car tax at the beginning of September the rate of new car sales is expected to decline while export sales should reflect strong gains relative to the very low base of 2009.

"Ultimately, the performance of the industry would remain a function of the direction of interest rates and the domestic economy as well as the performance of the global economy and international markets," said NAAMSA.

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