Pretoria - New vehicle sales in April has increased by 36 percent compared to the same time last year, the National Association of Automobile Manufacturers of South Africa (NAAMSA) announced on Tuesday.
Aggregate industry sales for April came in at 35 763 units compared to 26 288 vehicles sold in April 2009. This showed an improvement of 36 percent.
"The improvement should however be viewed in relation to the low sales registered this time last year due to the impact of the global financial and economic crisis at the time.
"Nevertheless, the growth momentum in new vehicle sales had improved further during April, 2010, with the year to date improvement running at 22.2 percent compared to the first quarter 2010 growth rate of 18.7 percent," said the association.
Of the overall total NAAMSA industry sales of 30 462 vehicles, 85.7 percent (26037) represented dealer/retail sales, 7 percent represented sales to the car rental industry, 4.2 percent industry corporate fleet sales and 3.1 percent of sales to government.
NAAMSA said despite the number of public and school holidays during April, 2010, the new car market had performed well with the selling rate of new cars per day remaining relatively robust.
There were improvements in the sale of industry new light commercial vehicles, bakkies and minibuses reflecting an improvement of 31.9 percent compared to the same month last year.
The sale of vehicles in the medium and heavy truck segments showed a mixed performance with a decline of 23.8 percent in medium commercials and a rise of 29.3 percent in heavy trucks and buses compared to April 2009.
South Africa produced vehicle exports registered an improvement of 51.6 percent compared to the same time last year; a matter which NAAMSA said would support industry export sales going ahead.
"The outlook for domestic sales for 2010 remained relatively positive and could gain momentum as economic activity levels improved further. The domestic market should receive support from further improvement in business confidence and consumer sentiment as well as lower inflation and the benefits of interest rate reductions," said NAAMSA.
Export sales were expected to show further improvement over the balance of the year. "The automotive market in South Africa was at an early stage of what probably represented a sustainable recovery and industry sales projections had recently been revised upwards to reflect growth in aggregate sales for calendar 2010 of around 14 percent," said the association.
Commenting on the data, Nedbank said the recovery of the industry indicated that consumer and business confidence is improving.
"The increase in sales of passenger vehicles shows that households are starting to take advantage of low interest rates and inflation, helped also by income growth and some stabilization in the labour market," it said.
The bank expects the vehicle market to gain further momentum for the rest of the year due to the accumulative effects of interest rate cuts and improved consumer confidence.
"However, medium term prospects will be constrained by the high level of household debt and only a slow recovery in employment."
However, the recovery in passenger vehicle sales suggests the need for further monetary easing is declining, said the bank.
"We still think that there could be a window of opportunity for a cut in the third quarter as inflation and inflation expectations ease further. However, this would require some setback in the global and local economic environment," it said.
