Pretoria - New vehicle sales in May grew by 35.3 percent compared to the same month last year, said the National Association of Automobile Manufacturers of South Africa (NAAMSA).
"Aggregate industry sales at 39 176 units had registered an impressive improvement of 35,3 percent compared to the 28 952 vehicles sold during the corresponding month in 2009. The exceptional revival in sales of new cars and commercial vehicles since the beginning of the year suggested that the industry had moved into a growth mode," said the association on Wednesday.
The association said that though the improvement in May's figure is due to the low sales registered in 2009 because of the global financial meltdown it is encouraging that aggregate industry sales for the first five months of 2010 remained 24.6 percent ahead of the first five months of 2009.
In addition, export sales registered exceptional volume growth in May.
Of the overall 33 182 industry sales, 28 888 or 87.1 percent of sales represented dealer/retail sales. The car rental industry represented 4.6 percent while 4.7 percent of the sales represented industry corporate fleet sales. Government accounted for 3.6 percent of the sales.
"The new car market had performed remarkably well with the selling rate of new cars per day remaining robust," said NAAMSA.
Sales of industry new light commercial vehicles, bakkies and minibuses at 11518 units in May showed an improvement of 2 846 units or 32, 8 percent compared to the 8 672 units of the corresponding month last year.
Medium vehicle and segments sales showed an improvement of 745 and 1189 units respectively. When coming to heavy trucks and buses these recorded a gain of 314 units compared to the same time last year.
South African produced export vehicle sales (24179) in May 2010 showed an improvement of 77.9 percent in comparison to the 13 593 vehicles exported during May 2009. The figure was depressed last May due to the global financial meltdown.
"Improved demand internationally for South African produced motor vehicles should support industry export sales going forward," it said.
NAAMSA says that the 550 basis points reduction in interest rates since 2008; relatively stable new prices; improvement in loan finance approval rates and pent up replacement demand has contributed to the strong recovery of domestic sales.
"Positive factors that would support domestic sales going forward included a gradual improvement in the financial position of consumers, improved consumer sentiment and business confidence as well as projected further recovery in economic activity levels. On the down side, however, the adverse consequences of recent widespread industrial action and uncertainty about the sustainability of the global economic recovery could impact on volume growth over the medium term," says NAAMSA.
The association expects sales for the year to expand by 15 percent while exports are expected to grow by 32 percent.
"Vehicle sales should increase further during the remainder of this year, supported by strong local and exports demand," said Nedbank adding that it expects interest rates to remain unchanged until quarter of 2011.
"While remaining very high, there has been some momentum loss in the sales volumes in May. Rental sales, which have been a significant driver of the trend since the start of the year, clearly lost momentum in the final month before the start of the World Cup," said Standard Bank economist Danelee van Dyk.