Pretoria - Vehicle sales disappointed substantially in May, the National Association of Automobile Manufacturers of South Africa (NAAMSA) said on Thursday.
"The year on year growth in total industry new vehicle sales during the month had declined substantially compared with earlier months," it said.
In May, aggregate industry domestic sales improved by 6.1 percent to 41 555 vehicles from 39 166 vehicles sold during May last year. "Total domestic sales for the first five months of 2011 remained 16.4 percent ahead of the corresponding five months in 2010," said the association.
Exports also reflected a more subdued performance at 22 063 vehicles, showing a decline of 8.8 percent compared to May 2010.
Of the total industry reported sales of 41 555 vehicles, 34 329 units represented dealer sales; 10.4 percent represented sales to the car rental industry, 5.1 percent represented sales to industry corporate fleet sales and 1.9 percent represented sales to government.
New car sales held up reasonably well, despite one less day compared to the corresponding month last year at 28 830 units, reflecting an improvement of 3 106 new cars (or 12.1 percent) compared to the 25 724 new cars sold in May, 2010.
"The higher sales of new cars over the past 17 months reflected continued recovery on the consumption side of the economy largely driven by the 6.5 percent decline in interest rates since end 2008 and which had contributed to an improvement in the financial position of consumers and businesses through reduced debt servicing costs on the part of households and companies," said NAAMSA.
There was a reduction of 907 units or a fall of 7.9 percent of sales of industry new light commercial vehicles, bakkies and minibuses in May 2011 compared to the 11 516 units sold in May 2010.
There was mixed performance in sales of vehicles in the medium and heavy truck segments at 703 and 1413 units respectively had recorded a decline of 37 units or 5 percent in the case of medium commercials and a gain of 227 units (or 19.1 percent) in the case of heavy trucks and buses compared to May 2010.
As expected, new bus sales had been particularly weak reflecting a fall of just under 57 percent compared to May last year when bus sales had been boosted in the run up to the Soccer World Cup.
South African produced motor vehicle exports in May at 22 063 units reflected a fall of 8.8 percent compared to the 24 180 vehicles exported during May last year.
"With all the major factories back in normal production following the high number of public holidays in April and the beginning of May, it was anticipated that the momentum of new vehicle export sales would pick up during the months ahead," said NAAMSA.
In May 2011, constraints on the availability of components from Japan impacted on the production of certain product lines in South Africa and, together with shortages of various models sourced from Japan, this would have contributed to the slowdown in the rate of growth in the new car and light commercial vehicle sales cycle for the month.
These factors would also have contributed to lower aggregate industry exports. It was anticipated that the supply position would normalize over the medium term.
"Indications of higher growth in the global economy as well as for the South African economy in 2011 should lend support to domestic and export sales of new motor vehicles. Continued growth in consumer expenditure and public sector infrastructural investment would also support domestic new vehicle sales. Despite current instances of limited supply and availability shortages, the industry remained on target to register overall growth in domestic sales of around 15 percent for 2011, whilst export sales were projected to increase over 25 percent year on year," explained NAAMSA.
